Construction: Giant Venture in Viet Nam

While the fighting in Viet Nam makes most of the news, one of the world’s largest and swiftest construction programs is changing the face of the country. The U.S. Government is directing a massive master plan aimed at providing the immediate necessities of war (bridges, roads, barracks), long-range civilian needs (power plants, water systems) and the huge strategic complexes (harbors, airfields, roads) necessary for supplying U.S. troops in a distant land with food, arms and equipment. Working at a vigorous pace, military engineers are planning and building dozens of the projects; so is the government-run Agency for International Development. But a big part of the job—by far the most expensive part—has been turned over to private U.S. enterprise.

The work already given to U.S. companies by the Defense Department amounts to more than $300 million, and at least another $200 million in contracts is planned for coming months. The projects are being carried out by four private U.S. construction and engineering firms that have banded together in a giant venture called RMK-BRJ. The four: Raymond International of Manhattan, Morrison-Knud-sen of Boise, Idaho (sponsor of the combine), Brown & Root of Houston and J. A. Jones of Charlotte, N.C. RMK-BRJ employs 1,433 American civilians and 22,710 Vietnamese on 40 major projects and 100 lesser ones.

Close Secret. The joint company is building a 10,000-ft. concrete runway and port facilities at Danang, another 10,000-ft. runway, parking aprons and a deep-draft pier at Chu Lai, an airfield extension, a helipad and a storage warehouse at Qui Nhon. At Cam Ranh, where a huge port facility is going up, it is building ammunition depots, anchorages,runways, aprons and taxiways; at Bien Hoa parking areas for planes, storage warehouses and cantonments. It is building a new U.S. embassy in Saigon, is developing an island in the middle of the Saigon River on which to store supplies.

Supervised by the Navy’s Bureau of Yards and Docks, the construction is proceeding under a cost plus fixed-fee contract that yields low profits but eliminates the hazard of loss. More important, this system gives the contractor an incentive to get the job done as quickly as possible. The amount of the fees involved is a closely kept secret. Says the combine’s overall boss, Morrison-Knud-sen Vice President Lyman D. Wilbur, who runs the operation from a windowless, green-painted office at No. 2 Duy-Tan Street in Saigon: “We think it’s too little and the Government thinks it’s too much.”

Logistics Bottleneck. The work is being done with impressive speed. Military insistence on standardization of buildings has helped, and so has the services’ willingness to lend the companies idle equipment. Carving a jet field at Cam Ranh out of scrub and sand dunes in 66 days, the companies built the airstrip with a material that had been used only experimentally in the U.S. before it came to Viet Nam: a thin, interlocking and sandwiched aluminum plate called AM2. The airstrip came out as smooth and as strong as a cement field—which would have taken eight months to construct.

The main obstacle to even faster work is the same delays in shipping and unloading that have caused a logistics bottleneck for the armed forces. Because there are just not enough ports and docks, long-awaited bulldozers, dump trucks or stone crushers are often delayed. To ease the bottleneck, the combine has set up an advance staging area at Poro Point on Luzon in the Philippines, is building three additional depots in Viet Nam. Except for such basics as rock, sand and gravel, most of the construction material must be shipped from the U.S. Though native lumber is abundantly available, for example, it is no longer used. Reason: heavy Viet Cong taxation on growers and suppliers has driven up the price for 1,000 board feet from $62 to $300 since 1962.

Tax-Free Wages. Surprisingly, the Viet Cong have carried out little sabotage on the projects, partly as a result of the careful security checks made on all Vietnamese laborers. If they pass, the skilled among them can make up to 93 piasters ($1.27) an hour. As for the Americans, they do not seem to be very hard to recruit, are motivated both by patriotism and by tax-free wages that run about 25% higher than in the U.S. When Morrison-Knudsen recently queried its U.S.-based employees about going to Viet Nam, 58 of the 60 men working on a missile site in Grand Forks, N. Dak., volunteered to go. Once in Viet Nam, the men more than earn their money. They must sign up for 18 months, work up to 70 hours a week in 130° heat, have little opportunity for recreation, face such hazards as malaria and 18-ft. pythons.

The amount of needed construction keeps rising faster than the amount that is actually being put in place, but the combine’s men feel that there is little in Viet Nam that they cannot do. The cost of construction put in place each month has risen from $8,000,000 to $11 million since August, and by March RMK-BRJ expects to hit a monthly rate of $25 million. “By spring we will have three airfields the size of San Francisco’s being built at the same time,” says Rear Admiral William M. Heaman, who handles liaison for the Navy. “This whole place is just going to be jumping with construction.”