Cavico receives US$187,500 as cost adjustment
26-JUL-2008 Intellasia | Business Wire
Jul 26, 2008 - 7:00:00 AM
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Cavico Corp ("Cavico" or "the Company"), a leading infrastructure development company in Vietnam, today announced that Cavico Infrastructure Construction, Cavico's wholly owned subsidiary, has received its first round of cost adjustments from the owner of A Luoi hydropower project, Central Hydropower Company. The cost adjustment received is a result of the governmental Article No 09/2008/TT-BXD issued by Vietnam Ministry of Construction in an attempt to resolve the inflation issues faced by contractors.
This cost adjustment impacts segments of construction works completed in 2008 as part of construction packages 60XL-AL and 61XL-AL at A Luoi hydropower plant. The cost adjustment of US$187,500 received by the Co is towards reimbursement of diesel costs, representing 14% of the US$1,339,285 value of work completed. The Co expects to receive an additional US$214,285 of cost adjustment towards reimbursement of construction materials and labour costs, representing 16% of the value of work completed. The Co also expects to receive additional cost adjustments for other construction work completed on this project in the near future.
In the past, Cavico Mining, a minority owned subsidiary, has received diesel cost adjustment for the 10% increase in the cost of mining construction works at the Nui Beo coal mine. Other Cavico subsidiaries are also working with their project owners to receive reimbursement for increase in construction costs under the governmental Article No 09/2008/TT-BXD.
According to Cavico's Planning and Technical Department, 82.5% of the Company's current projects will be eligible for cost adjustments. Cavico continues to have positive discussion with the owner of A Luoi hydropower project and owners of other projects on the amount of cost adjustment the Co expects to receive.
"We are happy to report the receipt of our first cost adjustment on the A Luoi hydropower project, which compensates us for the additional costs incurred by the Co due to high inflation levels," commented Hung Manh Tran, vice President of Cavico Corp "We are confident in our ability to manage our costs as the Vietnamese government continues to be supportive of infrastructure development," added Tran.
Cavico Corp.
Timothy Pham, 714-838-5456
Vice President and director
Cavicohq@cavico.us
or
Investor Relations:
CCG Investor Relations
Roger Ellis, 310-231-8600
Senior vice President
roger.ellis@ccgir.com
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