Since April 2016, contractors and investors have been gathering all material and monetary resources to speed up the progress of Trung Luong - My Thuan Expressway project, and have completed 25% of the total work volume so far, according to Chairman of the Board of Directors of Trung Luong - My Thuan BOT JSC Ho Minh Hoang.
So far, the contractors have spent nearly VND2.5 trillion (about $107. 27 million), and the People's Committee of Tien Giang province has advanced VND173 billion (about $7.423 million) to help fund constructions. However, if neither the expected state capital of VND9 trillion (about $386. 35 million) nor the credit capital of VND2.186 trillion (about $9.83 million) is obtained by this August, the contractors will end up the works.
Trung Luong - My Thuan Expressway project is at risk of being suspended by lack of funding.
The lack of capital will delay opening the expressway to public use expected by 2020, Vice Chairman of Trung Luong - My Thuan BOT JSC Luu Xuan Thuy said.
VietinBank - CN4, the bank primarily providing credits for this project, on May 31 issued a document regarding its consideration of granting credits to the Trung Luong - My Thuan project.
Regarding the amount of state budget involved, the bank requires a guarantee of VND2,575 billion (about $110.54 million) which is equivalent to 20.5 percent of the project’s total investment, while only VND2,186 billion (about $93,831,000) was proposed to the National Assembly as said above. Additionally, equity is required to reach 30% of the total investment which is about VND3,765 billion (about $161.67 million), much higher than any other project under Article 10 in Decree No. 63/2018/ND-CP. On the other hand, the state capital involved in PPP projects is not accounted for in the total investment capital.
Meanwhile, VietinBank only agreed to loan out a maximum of VND6,210 billion (about $266.45 million) not including VAT, whose amount was instructed by the bank to be obtained independently by the investors. VietinBank also requested a notice of credit commitment to be sent to them before the first date of disbursement. This is a very difficult requirement to meet when the VAT refund period depends on tax agencies’ progress and budget capacity.
Mai Manh Hong, General Director of the company, said the terms listed by Vietinbank consists of quite a few unreasonable points.
Therefore, the Ministry of Transport, the People's Committee of Tien Giang province, and the investors union have proposed VietinBank to appraise and solve any dilemma arising from its credit contracts, and promptly complete all procedures to ensure the expressway project can advance as per directions of the Prime Minister Nguyen Xuan Phuc.
In addition, Trung Luong - My Thuan BOT JSC had sent a petition to VietinBank to consider some matters, such as determining the bank’s financing limit and adjusting credit contracts before July 30th of 2016; setting loan rates in accordance with Decree 63; and most importantly, disbursing credits with no increase in interest during construction phase, unless there is any directive from the Government.
According to the Management Board of Tien Giang Civil and Industrial Construction Investment Project, the project’s contractors have taken over a ready-for-construction area of 50.64km out of the total 51.1km. Also, there are only 411 of 3,292 households who have not received their compensations. The People's Committee of Tien Giang province is focusing on getting every household compensated and repositioned in order to hand over the ground to project managers in its entirety.
In relation to the construction process, the company said 21 out of the 25 packages have been approved of, out of which 19 packages are undergoing constructions.
