Resolving “the problem”, which was a “key” to open Trung Luong – My Thuan highway investment and building project according to stagnant BOT project.
On August 7th, 2019, People’s Committee of Tien Province with its role as competent authorities for Trung Luong – My Thuan highway investment and building project, stage 1, organized a meeting consisting of representatives of Transport Ministry, Financial Ministry, Planning and Investment Ministry, Vietnamese State Bank (NHNN), credit granting banks, and investors to resolve problems relating to Credit Contract of the Project.
Trung Luong – My Thuan Project was still in a disorient stage after many implementation years
Resolve the “problem” of capital
According to the Decision on approving and adjusting Trung Luong – My Thuan highway investment and building project feasibility study report, stage 1 under the form of BOT contract of Tien Giang Province People’s Committee, total investment capital is 12,668 billion VND. Including, BOT capital is 10,482 billion VND; State capital for the project is 2,186 billion VND, arranged to disburse according to the State budget’s capital plan (NSNN).
The reason for cost increase for site clearance, raw materials’ price fluctuation; supplement overpasses, local roads, smart traffic system, trees, anti-noise and anti-flash blindness systems; adjust An Thai Trung traffic spot in accordance with My Thuan 2 bridge’s scope approved by Transport Ministry. In addition to that adjusting design and handle soft ground, adjusting pavement structure to reduce construction implementation to meet project completion schedule according to directive of Prime Minister under Notice no. 272/TB-VPCP on August 2nd, 2019.
Regarding to financial method, owner’s equity is 1,542.835 billion VND, equivalent to 14.72% of total investment capital (excluding budget capital supported by the State); other legal mobilization capital (excluding loans capital from commercial banks), which was 1,244.532 billion VND equivalent to 11.87% of total investment capital. Loans interest rate, other legal mobilization capital was in construction progress, estimated as 11.0%/year. Payback period was 14 years 8 months and 12 days. Bank loans’ payback period was 12 years 3 months (excluding grace period).
In the meeting, according to the report of Trung Luong – My Thuan BOT Joint Stock Company, investors contributed and mobilized 2,500 billion VND, including owner’s equity, which was 1,542 billion VND, other mobilized capital was 958 billion VND
BOT Trung Luong _ My Thuan Joint Stock Company stated that, requirements for 30% equity capital from investors as current was too much, investors could not satisfy and it was also unprecedented in the similar projects. If following this plan, required equity capital of investors was 3,800 billion VND. On the other hand, credit limit only undertook to disburse investment cost not including VAT, which would create difficulties for investors in other capital sponsors.
Mr. Dao Minh Tu, State Bank Deputy Governor answered investors’ proposal
Therefore, according to BOT Trung Luong – My Thuan Joint Stock Company’s proposal for Financial Ministry, Planning and Investment Ministry to soon finish procedures and reported to National Assembly Standing Committee on increase and decrease amount utilization method in 2018, fostered disbursement procedure, which was 2,186 billion VND from State Budget capital to support the Project.
For capital sponsoring banks, moving State Budget capital out of total investment capital, at the same time proposing to State Bank to direct Vietinbank and other syndication banks to determine a capital sponsoring capacity, resolving loans requirements issued. For Tien Giang Province People’s Committee signed appendix of BOT contract early as basis for Banks’ loans inspection and moved to the next step.
To answer investors’ proposal, Mr. Dao Minh Tu, State Bank Deputy Governor claimed: This is not a hard problem, financial method, collecting amount, collecting method, time, the parties shall sit back unanimously, it is technical factors only. This is an urgent project, Prime Minister has directed intensively and 20 million people are waiting for this road. This Project has passed the most difficult period, therefore, State Bank and commercial banks see that it is a huge responsibility and need to work intensively to achieve goal as proposed.
Mr. Tu claimed: the issues are nothing huge and commercial banks are not lacking of capital, but the loans still have to be in accordance with legal regulations, capital is able to be paid-back, avoid capital loss, or not using it for its purpose, so that it is required to be inspected again on legal aspect according to contract appropriately. “In the progress of loans settlement, investors meeting difficulties will report it to State Bank to handle in their power. We did not set 30% equity capital of investor as initial requirement”, Mr. Tu implied.
Representative of capital sponsoring party, Mr. Tran Van Tan, Vietinbank’s Board of Director member, key bank, which sponsored for committed capital loans with 50% of total loan rate, joint-sponsoring party, he explained disbursement could not be performed due to issues in legal procedures.
“Banks have unanimously with initial requirements and have basically satisfy it according to signed credit contract. However, financial method has changed, it is required to be inspected again on loans period and re-arranges with investors as suitable. Due to properties as guarantee are not much, it is mainly depended on project’s income, therefore related authorities need to have a method to guarantee income, which is not to be interfered.” –Mr. Tan shared.
Handover site area in August
At the current time. Tien Giang had handed over 50.77/51.1 km of site area, achieved 99.34%. Provincial People’s Committee was focusing on directing the locals to motivate household to receive indemnification amount, resolve remaining cases to hand over land area to project enterprise. Site area handover needed to be done within August 2019, was the goal.
Mr. Le Van Huong, Tien Giang Province People’s Committee Chairman wanted the parties to reach an agreement and fostered project to be finished on schedule early
In exchange with Diễn đàn Doanh nghiệp (Enterprise Forum) Newspaper, Mr. Le Van Huong, Tien Giang Province People’s Committee claimed: Tien Giang Province People’s Committee with the role as State competent authorities have utilized their best effort in cooperating with State management authorities, investors had sped up project progress.
Particularly, for site clearance, one of the most initial requirements to implement project was supervised schedule daily.
For disbursement progress of State capital to support the project, which was 2,186 billion VND, we filed a proposal document to relevant authorities to respond to investors.
“Immediately after this meeting, we will have file a report to Government and establish supporting working group, negotiate with contract to sign appendix of contract no later than the end of August 2019, as basis for bank to appraise loans and perform next step of the project.” – Mr. Huong implied.
According to Phan Nam- Le Trang/ Enternews
