Posted on 09 Jun 2008
Out of the 505 projects planned in the beginning of the
year, 52 projects were cut, 63 delayed and 87 extended. Most of the projects on
the list have to do with housing and infrastructure.
Meanwhile 11 new projects were added.
More than VND4 trillion (US$250 million) was cut out of the
investment capital registered at the beginning of the year, totalling more than
VND40 trillion ($2.5 billion).
According to Deputy Construction Minister Dinh Tien Dung,
the capital cut was mainly concentrated in five areas: electricity plants, housing,
urban infrastructure development, cement plants and construction materials
projects.
Electricity plants projects have had the most capital
reduced: nearly VND2.3 trillion ($143.8 million).
Experts said that the capital reduction for hydroelectricity
plant projects is a reasonable cut as these projects require large amounts of
investment with high bank loans, while interest rates are fluctuating and
construction material prices have sharply risen.
Investment capital for housing and urban infrastructure was
also reduced significantly, staying at VND10.37 trillion ($648 million). More
than VND2 trillion ($125 million) was reduced, with 25 projects delayed and 45
others extended.
The capital reduction for housing and infrastructure
projects was attributed to difficulties in capital mobilisation and the fact
that the property market was frozen. Moreover, some projects faced difficulties
in administrative procedures, land clearance and compensation so the cut
seemsed reasonable.
Seven cement plant construction projects had their progress
suspended with VND766 billion ($47.9 million) cut.
As the cement industry aims to meet its 2010 target set by
the Government of producing 50 million tonnes of cement and stabilising cement
supply for the domestic market, ongoing cement projects have not seen a
reduction in their investment capital.
