Cavico has recently made further headway with tunnelling work on hydro schemes in Vietnam with the breakthrough at the Nam Chien 2 project which followed a contract award at Huoi Quang and also at the Dambri and Dak My 4 schemes earlier in the year.

The company’s progress extends its successful run of local tunnelling contract over the last couple of years in which it has also won work on projects including Ngoi Phat, Ta Thang, Nho Que 3, A Luoi and Thai An.

However, construction cost inflation has been adding margin pressure for the company, especially due to fuel costs. Clients on the strategic hydro project developments are starting to make cost adjustments as work continues, such as recently done for Cavico on the A Luoi scheme. The company said more than 80% of its entire construction workload is eligible for cost adjustments.

On the Nam Chien 2 project the contractor holed through on the 1,300m headrace tunnel contract two months early. The original contract was to drive 2,768m for US$4.7M but the length was reduced and price of the 4.8m diameter bore adjusted down to US$2.4M. Including the final concrete lining work the package is valued at US$3.52M. The work is to be finished by March 2009.

Nam Chien 2 is being developed by Northwest JSC in Son La province approximately 350km north west of Hanoi.

Cavico was recently awarded a US$9.43M contract for tunnelling work on the Huoi Quang project, one of the countries largest hydro schemes. Details on the work to be done were not immediately available, but the contract value is much less than the tunnelling awards totalling US$30.5M earlier in the year for construction on the Dambri project.

On the Dambri project the company is to drive bores of 5km and 3.2km, respectively, and up to 4.3m wide. The associated contract values are US$19.2M and US$11.3M. The client is South Hydropower JSC.

For the Dak My 4 project, the company is to build headrace tunnels and a surge tank for US$11M. The headrace tunnel will be 3.85km long and the surge tank 90m high with its diameter varying from 5m-8.6m. The client is Industrial and Urban Development Corp.