mai hien

TRUNG LUONG – MY THUAN PROJECT SEES HOPE AFTER DELAY.

Friday, 02 August 2019 10:49

Prime Minister Nguyen Xuan Phuc said that the Trung Luong – My Thuan Expressway must be completed in 2020 and open for traffic in 2021.

 

Capital for the project would be sufficiently allocated, the PM said.

This gives hopes to the investor as construction on the expressway could have been delayed indefinitely because it has run out of money, according to a Nguoi Lao Dong (The Labourer) Newspaper report.

 

Luu Xuan Thuy, vice chairman of the management board of the BOT Trung Luong -My Thuan Company, the project investor, said that the company had exhausted their funds for the infrastructure project.

 

Two days ago, the company held an emergency meeting with the People’s Committee of southern Tien Giang Province, relevant agencies and contractors to discuss halting the project next month.

 

The reason given was the slow approval of adjustments to the design and delays in capital disbursement from the State budget and other sources of credit.

 

Since Tuesday, workers had gathered on the construction site of the project to ask for wages from the investors, the paper reported.

 

“For more than three months we have had to mobilise funds from alternatives sources, but we can’t do it anymore. So we had to stop work on the construction site,” said a representative of Thanh Noi Ltd. Company, a sub-contractor of the XL13 bidding package.

 

The project had a total of 25 bidding packages which were carried out by several different contractors.

 

“If only considering the XL13 bidding package, many people would think it was a partnership of financially weak investors and contractors,” said Thuy.

“But that’s not true,” he said.

 

The Trung Luong- My Thuan Expressway Project has been carried out under a public-private partnership with total investment of VNĐ12 trillion (US$518 million) as per the latest adjustment.

 

So far, the investor and contractors have spent about VNĐ3 trillion (US$130 million), of which the investor paid VNĐ2.5 trillion (US$108 million).

 

Since re-starting the project in April, the construction work is now 25 per cent complete, from just 10 per cent ten years ago, according to the investor.

 

Work on the 50km Trung Luong- My Thuan Expressway started in 2009 under build-operate-transfer model with total investment of VNĐ9.8 trillion (US$417.5 million). It was under the management of the Transport Ministry before Tien Giang People's Committee took over.  The project was stopped in November 2018 due to difficulties in securing loans and changes in public investment policies.

 

Recently, Tien Giang People’s Committee paid the investor VNĐ228 billion (US$9.8 million) in advance for ground clearance work while it waited for money from the State budget and sources of credit, the company’s general director Mai Manh Hong told Tuoi Tre (Youth) Newspaper.

“But this amount was too little for such a big project,” said Hong.

 

So far, only six out of 25 bidding packages have been carried out. Other packages are working perfunctorily or have stopped due to the lack of funds.

 

Pham Tien Duc, vice general director of the Infrastructure Construction CII Company, another contractor, said that until now his company had poured nearly VNĐ300 billion (US$13 million) into the project.

 

“The investor paid us a small amount of money. Now, we are running out of money while knowing that the project’s design adjustment was not approved and money has not been disbursed from the State budget,” said Duc.

 

“Under these circumstances, we can only keep working until mid-August,” he said.

According to Thuy, there were obstacles beyond the ability of project investors and endurance of contractors, so they had to consider halting the work.

“This was a solution to minimises losses and prepare for re-deployment under better conditions,” Thuy said.

 

In the meeting, Thuy asked the provincial People’s Committee to approve the project’s design adjustments, which would help the company get loans from credit providers.

 

The company also wanted to have a schedule of capital disbursement from the State budget.

Accordingly, the investor proposed the government to ask ministries of Planning and Investment, Finance, Transport and the provincial committee to accelerate the disbursement of funds.

 

The Finance Ministry should accelerate procedures to refund the investor for the ground clearance work.

 

Hong suggested that in case banks could not offer loans, the authorities should consider issuing bonds for HCM City-Trung Lương toll station to supplement investment for the project.