"Having no choice but stop construction in August 2019" is the content that investors, contractors, supervision consultants of the Trung Luong - My Thuan Expressway project identified in the morning meeting on July 24, 2019. Attending the meeting were representatives of Tien Giang People's Committee, the competent state agency of the most important road project in the South at the moment.

Mr. Mai Manh Hong - General Director of Trung Luong BOT Joint Stock Company - My Thuan reports the project implementation situation

The Trung Luong - My Thuan Expressway Project was started in September 2009, with the expectation of sharing the traffic burden and breaking the uniquely position of National Road No.1 on the way to the West, the region contributes most of the export agricultural output and ensures food security of the country. After a few times started and then ... stopped, from the end of March 2019, the project was restard after being restructured and improve capacity by Deo Ca Group. After just over 3 months, the project has achieved a spectacular construction volume of up to 25% (compared to 10% of the previous 10 years). The speed of construction makes the National Assembly, the Government and the people hope that the project will finish on time, the expressway can be completed in 2010. But once again, the expected road is encountering hardship.

Contractors and investors have done their best

Right from the morning, despite the heavy rain in the West, the contractors, investors and representatives of the provincial People's Committee came very early. Everyone was worried because just the day before (on the morning of July 23), an unprecedented circumstance happened: the subcontractor of package XL13 - Thanh Noi Co., Ltd. suddenly stopped construction, hanged banners demanding payment from contractor. Representatives of Thanh Noi company also expressed concern in tears: “Over the past three months, believing in the determination of the Government, the National Assembly and the faith of the people, we together with investors, contractors have made every efforts despite of difficulties. We mobilized money from family, friends, relatives even borrowed to do, desire to complete our tasks. But now we are exhausted and burdened with debt. We are facing a dilemma, half-dead, and at risk of insolvency. Hanging banner to collect debts and stopping all work on the construction site is the last choice for us”.

Mr. Tran Van Dung - Vice Chairman of Tien Giang province agreed with the opinions of the parties and said that the Chairman of Tien Giang province is registering to work and report to the Prime Minister and the Government but the procedures must have taken time. He wants the Investor, the Contractors, the stakeholders to join hands to overcome difficulties, don’t let project be delayed or stopped.

Mr. Thang, investor Tuan Loc company, tensionly said: “We have invested more than VND 500 billion here. Over the past 3 months, with the faith put in the Government and the National Assembly, we together with the project enterprises and contractors have made tireless effort and worked nonstop on the construction site, the our workers also have faith to work. But now, after many efforts, spending billions dong every day but the state capital allocated for the project and the promised bank credit has never showed! We have exhausted, money ran out, our staff’s life is affected. We always know that Trung Luong - My Thuan project was very difficult so we with the project enterprises and the Government to shoulder the burden. But we moved without seeing the state move so we were really desperate...”.

Mr. Ngo Ba Hung, representative of investor as well as contractor B.M.T. (enterprises contributing 10% in the project) also said that it was really difficult. He said: “Investing money here and get bogged down is unwilling. After restructuring, we got to work with faith and enthusiasm. But now the reality is a disillusionment. Ladies and gentlemen, yesterday just only 1 sub-contractor hanged banners demand for payment, but if tomorrow the other contractors do the same thing, we really don't know what to do because this is really beyond our ability”.

Sharing the same circumstance, other investors and contractors also complained and expressed their disappointment when they had paid upfront money, tried hard but still sunk in frustration. They agreed that: if still not be allocated capital, after all their equity run out, not only investors and contractors falling into debt but also the construction will be freeze.

Mr. Luu Xuan Thuy - Vice Chairman of BOT Trung Luong - My Thuan said: “We do not want this to happen, because if it happens, there will be losses. However, with a sense of responsibility to the project, to the contractors, the investors and the people, in this situation, it is imperative to determine the time to stop construction to avoid more losses”.

Who’s to blame?

It is impossible for a national key project with a total investment of over VND 12,000 billion facing the risk of stopping without anyone's fault. There had to be a reason.

At the briefing meeting, Mr. Mai Manh Hong - General Director of Trung Luong - My Thuan BOT analyzed: The project has been agreed upon by credit banks (headed by Vietinbank) in June 2018. However, up to now, with harsh and unreasonable disbursement conditions, no capital has been disbursed though investors have raised nearly VND 2,500 billion for construction (and about VND 500 billion from contractors).

And yet, to handle the consequences left by the old investors, when taking over the project, Trung Luong - My Thuan BOT Joint Stock Company presented the overall adjustment project, so there are some categories will be changed such as plans for handling and reinforcing soft ground, speeding up the construction time at the request of the Standing Government so the total investment change as a consequence. The project adjustment dossier has been approved by the State check & acceptance board, Institute of Economics - Ministry of Construction and Ministry of Transport have been appraised and approved as well. However, the competent State agency is Tien Giang People's Committee has not yet approved and signed the project appendix adjustment contract. Therefore, the credit capital is also blocked by the requirements of procedures, records of the Bank have not been met.

The situation even more stringent when the 2,186 billion of State capital support for project investors has not been disbursed despite the Government's approval.

Mr. Tran Van Dung, Vice Chairman of Tien Giang Provincial People's Committee explained: “We understand the biggest difficulty of the project and investors and contractors is about capital. I myself have 9 years working in the field of investment (Mr. Dung was former director of the Department of Planning and Investment of Tien Giang province) so we are no stranger to the process”. He shared with the investors and contractors: "We don't want to stop constructing; we came here to discuss solutions to go on”. Like him, investors and contractors all want a solution and everyone knows that: the key is in the hands of the competent state agency, the People's Committee of Tien Giang Province.

At the end of the meeting, Mr. Luu Xuan Thuy accknowledged the efforts of investors, contractors, supervisory consultants and People's Committee of Tien Giang Province in the past time had been shared the hardship of increasing the construction volume, advancing capital for construction and ground clearance. “However, the fact that investors and contractors have spent around VND 3,000 billion has gone beyond the tolerance of the contractors. Determining technical stops to avoid losses is the responsibility of the genuine investors, contractors. "

Mr. Thuy also requested that the parties should film, take photos of the project site, make a record of the time of stopping and the contractors must commit that when conditions are favorable, they must re-execute with a sense of responsibility and request the Project Management Unit to continue coordinating with the People's Committee of Tien Giang province to remove difficulties.

Mr. Thuy also asked Tien Giang Provincial People's Committee finish checking of the project adjustment soon, create a basis for working with the bank; Early work with central agencies to have a disbursement schedule of 2,186 billion that the Government has allocated for the project.

Trung Luong - My Thuan Expressway Project is one of the arterial roads, playing a particularly important role in connecting the Southwest region with Ho Chi Minh City and the Southern key economic region.

The project was first started in November 2009. After more than 5 years at a standstill, on February 7, 2015 the project was restarted by a consortium of investors including Tuan Loc - Yen Khanh – B.M.T. - Thang Loi - Hoang An - CII. As planned, the project will be completed in the second quarter of 2020.

After restarting, the project again encountered many difficulties and obstacles and was assessed as having no basis to ensure the schedule as required by the Government. The biggest obstacle in this project is the broken financial plan, the large difference between interest rate of the project contract loan and the bank loan make the disbursement unable.

In addition, due to the changes of the Law on Public Asset Management, toll revenue at Ho Chi Minh City - Trung Luong booth planned to support Trung Luong - My Thuan project could not be implemented.

In order to solve these problems, Trung Luong - My Thuan BOT Joint Stock Company proposed the Ministry of Transport invite the qualified investor - Deo Ca Group to participate in project management and administration.

After participating in the project, Deo Ca Group actively implemented many solutions and the project was restarted in April 2019 with the determination to finish by the end of 2020 as directed by Government.

After a busy construction time to achieve the goal of completing 50-60% of the volume in 2019, the project has shown signs of slowing down due to the State budget capital has not been granted and bank loans have not been disbursed..

Dang Phuong