The Investors of Trung Luong - My Thuan Highway project are worried that if the project is not identified the fund, it will be difficult to implement to meet the schedule on putting into operation in 2020.
Until now, the timeline for operation of Trung Luong - My Thuan Highway in 2020 as directed by the Prime Minister is only one year left. However, the remaining work quantity is so much, the project’s obstacles – especially capital – has not been solved.
What can be done has been done by the Company
Implementing the direction of the Government Standing Committee at Notice no. 99/TB-VPCP dated March 18th and Notice no. 272/TB-VPCP dated August 02nd on solutions to solve difficulties of Trung Luong - My Thuan Highway project, the investors have actively worked with the State Final Acceptance Council to construction works - Ministry of Construction, State Audit, Tax Inspection agency to review previous obstacles as well as consult opinions for solution and amendment.
The result was that based on the opinion of the State Audit, Tax Inspection Department eliminated the previous “0 VND” investors: Yen Khanh Company, Hoang An Company, Thang Loi Company. Currently, the project has only 3 investors: Bridge and Road Company CII, Tuan Loc Construction Investment Joint Stock Company and BMT Construction Investment Joint Stock Company.
On the August 02nd and 09th, based on the opinion of the State Final Acceptance Council to construction works, the State Audit and the appraisal opinion of the Ministry of Transport, People’s Committee of Tien Giang province also approved the project adjustment, signed appendix of project adjustment contract with the investors...
With the determination of investors and the Government of Tien Giang province, the operation schedule of Trung Luong - My Thuan route in 2020 is still guaranteed if the capital issue is solved. Photo: GIA MINH
Until now, the investors have mobilized the equity and spent in the project of 2,500 billion VND, advance the cost of land clearance for Tien Giang province. As a result, 25% of the project quantity have been completed, during the last 3 months, over 10% was increased compared to the quantity implemented during the last 10 years.
On July 23th, the Contractor held a banner for debt collection. At the meeting with the People’s Committee of Tien Giang province on July 24th, the investors and the contractor stated that if there was no capital, the project must be stopped. Mr. Luu Xuan Thuy, Deputy Chairman of Trung Luong - My Thuan BOT Joint Stock Company, said that these problems were “beyond the ability of the project company” and “beyond the tolerance of contractor” so they must have an estimated plan for stopping the project.
According to Mr. Mai Manh Hong, General Director of Trung Luong - My Thuan BOT Joint Stock Company, what could be done, the project company has already done. “We calculated the time for treatment of soft ground, anticipated the difficulty of materials transport... We had monthly plan even daily plan for construction to meet the operation schedule in 2020. It could not be slower; time was running out!”- worried Mr. Hong.
Keep waiting
In fact, after more than 3 months of restarting the project, the contractors have tried their best but they are facing great difficulties. It is the source of capital for the project from the state budget and they wonder when the National Assembly shall approve, while the credit capital from banks is still being considered and it has not been appraised for lending. Mr. Mai Manh Hong emphasized that in the coming time, if the project is not identified the fund, it will be difficult to implement to meet the schedule on putting into operation in 2020.
About the state budget capital, the Government has submitted statements to the Standing Committee of the National Assembly to approve 2,186 billion VND to support the project, using the increase from the central budget in 2018. Until now, there has been no approval from the Standing Committee of the National Assembly, the plan for capital allocation and disbursement time as base for ensuring the financial plan of the project has not been determined.
In fact, with the determination of the investors and the responsible support of Tien Giang province as during the last time, the ability for operation in 2020 is entirely feasible with the condition of removing the capital bottlenecks as soon as possible.
The remarkable information is that on August 15th, under the Prime Minister’s authorization, Ministry of Finance submitted the Standing Committee of the National Assembly the capital allocation plan for Trung Luong - My Thuan project. It is expected that this content will be discussed and decided by the Standing Committee of the National Assembly at the meeting in September.
“It is now the last days of August 2019. To successfully implement the project, it is very important and crucial to turn the capital from the state budget to credit to determine the project implementation ability, operation ability in 2020, Trung Luong - My Thuan highway shall be completed and put into use in 2021” - expected Mr. Mai Manh Hong.
Credit capital hover
In Document 5195/TGĐ-NHCT5 signed on August 21st, on behalf of banks financing capital, VietinBank sent a report to the State Bank notifying that VPBank shall not continue to participate in co-financing the project.
Meanwhile, the difficulty now is that at the present time, the banks require investors’ own capital to meet 3,800 billion VND - a difference of 1,013 billion VND compared to the amount of 2,787 billion VND approved by Tien Giang Province People’s Committee. The Investors have exchanged that they can meet up to 3,400 billion VND but the banks has not had an agreement. In addition, the banks determine the lack 882 billion VND to arrange enough capital for the project. So now, the banks cannot arrange capital for the project.
The Government Standing Committee has directed the State Bank to have specific opinions but the “soft power” of commercial banks has made many current important infrastructure projects to be stuck between a rock and a hard place. It is the credit capital hover that creates the bottleneck to delay the project.
For Trung Luong - My Thuan project, with the aspiration and expectation of 20 million people in the Mekong Delta, it is time to have specific actions from the responsible people who are assigned the responsibility for managing the State capital at commercial banks.
State Bank: Ensuring the legal conditions for disbursement
On August 26th, exchanging with reporter of Lao Dong newspaper, the banks participating in co-financing credit for Trung Luong - My Thuan project said that they were continuing the process of appraising the project’s financial plan. “The Bank is working closely with involved parties to appraise and settle the next steps” - confirmed by a representative of one of the banks arranging capital for the project.
According to the reporter, from the beginning of August until now, the banks participating in financing the project have met to re-agree on the financial plan to be suitable the legal bases adjusted during the last time. Previously, at the meeting with the People’s Committee of Tien Giang province, Trung Luong - My Thuan BOT Joint Stock Company and representatives of commercial banks: VietinBank, BIDV, Agribank, leaders of the State Bank directed the credit institutions to continue closely coordinating with the localities and project investors to adjust and complete the legal documents to promote the implementation schedule of this important infrastructure project.
During the past time, the general policy of the State Bank was to restrict the credit institutions on using short-term mobilized capital to provide medium- and long-term loans to real estate projects, BOT projects, …. For important transport projects, key inter-regional infrastructure connections such as Trung Luong - My Thuan highway project, the commercial banking system still accompanied, committed to finance capital to promptly meet on the guaranteed base of regulations of law.
About the reflect from the investors on credit capital, representatives of commercial banks admitted to adjust the total investment, adjust the financial components and business plan, capital recovery as well as obstacle settlement related to the investment law which made this project delayed. Therefore, although the credit contracts have been signed previously, due to the change in total investment, change in financial plan ..., there were not enough conditions and procedures for the banks to disburse capital to the investors.
About this issue, the representative of State Bank stated the willingness to support the banks to arrange capital for the project; ensure the most favorable legal conditions for commercial banks to quickly agree and disburse the committed capital source for Trung Luong - My Thuan highway. The financing of capital to the project was decided by the commercial banks, agreed by the investors and implemented according to regulations of law.
L.Anh
