186 mines planned, 11 mines licensed
Surveys at construction material dealers in Da Nang show that construction sand and gravel are currently common at around 600,000 - 650,000 VND/m3, a sharp increase compared to the level of 300,000 - 450,000 VND/m3 of the previous year (an increase of about 40%). This is also the group of materials that increased the most, leading to the escalation of prices of stone, bricks, steel, and cement, causing the construction cost level to increase significantly.
According to management agencies, the biggest reason is not the unusual increase in demand, but the scarcity of sand supply.
Mr. Nguyen Hong An, Deputy Director of the Department of Agriculture and Environment, said that according to the plan, the city has 186 sand and gravel mines. However, so far only 11 mines have been licensed for exploitation in the Quang Nam (old) area, with a total reserve of more than 852,000m3, capacity of about 122,000m3/year. Compared to the actual market demand, this number is too low.
In other words, planning is very large, but licensing is too slow. The gap between the figures on paper and the source of goods outside the market is creating a thirst for sand, pushing prices up every day.
More notably, many mines have completed auctions nearly 1 year ago, have been recognized for their results, but are still unable to be exploited. Problems with legal procedures, site clearance and related conditions make many mines, even though they have "owners", still remain on paper.
We have just been licensed to explore minerals, if it's quick, it will take about a year and a half to put it into operation" - a sand mine auction winner said.
This is also the reason why supply is not replenished, while the market continues to be squeezed. The price of this delay is falling on the shoulders of businesses and people.
Mr. Nguyen Van Xuan, Director of a fresh concrete supply enterprise in the southern Da Nang area, said: "Sand reserves are running out, in a few days we will have to issue a notice to stop supplying fresh concrete to customers. This is a force majeure situation, stemming from a supply disruption.
Businesses and people struggle because of expensive sand
Mr. Tran Minh Quan, representative of a construction enterprise in Da Nang, said that the current material price accounts for a very large proportion of the total investment. With contracts already signed at the old unit price, businesses almost have no profit margin, and even have to subsidize to maintain progress. If the price of sand and materials continues to be high, the risk of delaying progress and adjusting construction plans is inevitable.
People building houses are not much better either. Mr. Pham Duc Long, residing in Tam Ky ward, said that his family's house construction estimate has increased by hundreds of millions of VND after a short time of updating the price of materials. The construction plan is therefore forced to recalculate, even to narrow down the scale or postpone the commencement time.
In rural areas, many households are in a passive position. Ms. Tran Thi Huong in Tam Xuan commune said that sand prices have increased sharply since the beginning of the year, and the supply is scarce, so it is not easy to buy. But because the construction time has been set, the family still has to accept buying at a high price.
On the supplier side, the pressure is also not small. A material transportation business said that the general price level of iron and steel, bricks, sand, stone, and cement has now increased by 12 - 50% depending on the type. More worryingly, prices are usually only reported monthly, making the market unstable, making it difficult for businesses to forecast, and for people to calculate costs even more difficult.
Mr. Tran Van Hung - a dump truck driver said - "Due to the scarcity of sand and gravel supply, brothers can only run one trip/day, income has decreased more than 3 times. We don't know how long we will last.
Not only people and businesses are affected, many key transport projects in Da Nang are also behind schedule due to scarcity, pushing up raw material prices.
Faced with the scarcity of sand and gravel supply, Da Nang City People's Committee has requested departments and branches to review and clarify the causes and responsibilities of each unit, and at the same time not to prolong the situation of winning auctions but not putting them into operation. The city also directed to streamline and transparentize the process from auctions to licensing, accelerate the progress of bringing mines in the plan to the market and strengthen control of speculation, hoarding goods, and price manipulation.
