HCMC – Major transport infrastructure projects across Vietnam are facing delays and budget overruns as fuel prices have surged by 40% to 60% in March due to impacts of Middle East tensions.
The spike in diesel oil prices – from VND17,600 to over VND30,000 per liter – has triggered a domino effect, pushing construction material costs up by over 10% in the first quarter alone.
With fuel accounting for up to 50% of machinery operating costs, many contractors are now operating at a loss, struggling to maintain progress under fixed-price contracts that offer no flexibility for market fluctuations.
At the Huu Nghi-Chi Lang and Dong Dang-Tra Linh expressway projects in the north, fuel stations are rationing supplies, providing only a fraction of the tens of thousands of liters required daily. In the south, contractors for the HCMC-Long Thanh-Dau Giay expressway expansion have been forced to manually collect fuel from various retailers.
The impact is rippling through the broader economy, with experts warning of a subsequent hike in real estate prices.
HCMC Real Estate Association Chairman Le Hoang Chau said that rising infrastructure costs will inevitably push up property prices, particularly in housing and industrial sectors. In response, industry leaders are calling for urgent state intervention.
Proposed solutions include establishing a flexible price adjustment mechanism for contracts, ensuring priority fuel supplies for national projects, and creating a real-time construction price index to prevent a long-term bottleneck in Vietnam’s infrastructure development.
