Cavico Receives $187,500 as Cost Adjustment

2008-07-24 05:00:04 -

- Cavico Corporation (OTC BB: CVIC) ("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 $187,500 received by the Company is towards reimbursement of diesel costs, representing 14% of the $1,339,285 value of work completed. The Company expects to receive an additional $214,285 of cost adjustment towards reimbursement of construction materials and labor costs, representing 16% of the value of work completed. The Company 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 Company 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 Company due to high inflation levels," commented Mr. 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 Mr. Tran.

About Cavico Corp. (OTCBB: CVIC)

Cavico Corp. is focused on large infrastructure projects, which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants and urban developments in Vietnam. Headquartered in Hanoi, with 3000 employees at projects worldwide, the Company has offices throughout Vietnam and a satellite office in Australia.

Founded in 2000, Cavico is a major infrastructure construction, infrastructure investment and natural resources conglomerate headquartered in Hanoi, Vietnam. Cavico is highly respected for its core competency in the construction of mission-critical infrastructure including hydroelectric plants, highways, bridges, tunnels, ports and urban community developments. One of the Company's primary competitive advantages is its ability to nurture a project "from concept through completion" with a vertical portfolio of interrelated investment, permitting, design, construction management and facility maintenance services. Cavico's project partners include top multi-national corporations and government organizations. The Company employs more than 3,000 people.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems; the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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