Cavico wins payment adjustments for inflation at Vietnam projects

Vietnam hydro project builder Cavico Corp. has won payment adjustments for construction of Vietnam hydroelectric projects and said it is in negotiations for adjustments at other projects due to inflation.

Cavico said August 26 it signed a contract amendment with Bao Loc Hydropower Co. to receive an additional US$2.8 million for work on the 48-MW Bao Loc hydropower project to cover inflation and requests for additional construction work.

Cavico Tunnel received a US$2.1 million contract from Bao Loc in 2005 to build a headrace tunnel, penstock tunnel, vertical surge shaft, and adit tunnel. The additional US$2.8 million includes US$600,000 for increased fuel and construction material costs due to inflation and US$2.2 million for additional concrete and other work.

Cavico said it received similar cost adjustments from Central Hydropower Joint Stock Co. for the 170-MW ALuoi hydroelectric project in A Luoi District of Vietnam’s Thua Thien Hue Province. (HNN 1/2/08) Cavico units had received contracts totaling US$59 million for dams, tunnels, and roads at ALuoi.

The company said it received an additional US$187,500 for diesel costs and expects to receive an additional US$214,285 for construction material and labor costs.

Cavico’s planning department estimated 82.5 percent of its current projects would be eligible for similar cost adjustments.

The company earlier noted that Vietnam Vice Prime Minister Hai Trung Hoang instructed state-owned banks and entities to prioritize and restructure funds to avoid any delay or cancellation of hydropower construction projects in the wake of inflation concerns and interest rates.

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