On August 12th, 2019, at Tien Giang Province Convention Center, Tien Giang Province People’s Committee (Competent Authority) had entered into appendix of Trung Luong – My Thuan highway construction investment and building project contract under stage 1 by BOT contract with project corporation (Trung Luong – My Thuan BOT Joint Stock Company) and investors joint venture.
Signing ceremony of Appendix ofTrung Luong – My Thuan highway construction investment and building project contract under stage 1 by BOT contract
Appendix of project contract (PLHĐ) was signed to adjust, amend, supplement a number of contents in the contract and appendixes of contract signed before. According to that, Trung Luong – My Thuan BOT Joint Stock Company had basically completed legal framework for project implementation, including capital disbursement of State Budget and key legal framework for credit plan appraisal of project capital contributing bank.
Signed Appendix of contract had confirmed to have total investment capital of 12,668 billion VND, decreased more than 2,000 billion in comparison with initial investment capital, which is 14,678 billion VND. Including support State Budget Capital, which is 2,186 billion VND, therein, BOT capital is 10,482 billion VND (Investor capital: Owner’s equity, other mobilizing capitals are 2,787 billion VND; bank borrowing capital is 7,695 billion VND). In the event of changes in total investment capital, BOT capital, owner’s equity shall be adjusted correspondingly.
Appendix of contract also defined in the event that support capital from State Budget, which is 2,186 billion VND was not or hah not been prepared for disbursement in 2019 according to project schedule plan, investor was entitled to propose renew or delay, temporarily suspend project. On the other hand, in the event that commercial banks did not prepare borrowing capital for project (Not investor’s fault) or project obligatory disbursement request unable to be performed by investor, investor and Provincial People’s Committee will agree to report it to the Prime Minister for consideration and resolution, as well as proposing the Government to arrange other capital amount for project implementation.
Mr. Luu Xuan Thuy – Trung Luong–My Thuan Joint Stock Company Vice Chairman of Board of Directors said that: “Signing appendix of contract on this date does not mean the State competent authorities, and investor’s responsibility are finished. It is only an important legal framework for credit capital appraisal of the next project. After this signing ceremony, we and competent authorities will continue to work together with credit organizations to ensure credit capital for project implementation”.
According to Mr. Pham Anh Tuan, Vice Chairman of Tien Giang Province People’s Committee, Appendix of contract signing was a huge effort from both parties. Until this date, legal framework of the project had basically been completed. In the upcoming time, we need to put more effort into it, due to remaining time for route transportation in 2020 as directed by the Prime Minister, was very short, with huge work quantity and time pressure. Tien Giang Province would utilize their best effort with investor, corporation to ensure project schedule.
On the previous time, on August 7th, Tien Giang Province had organized a meeting to untie difficulties on credit capital for this project with Ministry of Transport participation, Financial Ministry, State Bank, Banks sponsoring credit for project and Investor.
In the meeting, Financial Ministry affirmed to have prepared utilization plan for increasing income to file to Prime Minister in 2018, Standing Committee National Assembly to arrange State Budget capital, which is 2,186 billion VND for this highway project. If there was no further change, such State Budget capital shall be passed and disbursed on September 2019.
For State Bank, Deputy Governor Dao Minh Tu directed credit organizations to arrange capital for the project. Mr. Tu affirmed: “This is an efficient project in commercial investment, banks should confidently loan, and request banks not to apply investor equity capital rate as 30% of E-commerce as initial requirement. Joint Stock Banks are currently not lacking of capital, in the event of insufficiency, State Bank can offset for credit demand of this project. In the progress of credit capital loan, if any difficulties and issues occurred, it is required to report it immediately and State Bank will have support plan not only in project implementation but also until project completion”.
According to Mr. Mai Manh Hong – Trung Luong-My Thuan BOT Company General Director: “Prime Minister has directed decisively, decided a fixed time for route transportation in 2020 and completed, put project in operation in 2021. Whether project can finish, operate in 2021 or not depend majorly on credit capital from banks”.
In the meeting on August 7th, 2019, Investor also affirmed to utilize best effort to foster project construction schedule, but will not borrow capital from bank at any cost, when it still had many risks not accompanied by Tien Giang Province and borrowing Bank; unspecified commitments will lead to many consequences for Investor in project life cycle.
On the other hand, Tien Giang Province, Ministry of Transport mutually undertakes request not to change current transportation planning, which will change distributary according to calculation in financial method signed with Credit Bank, unless otherwise other policy of National Assembly, Government issued.
Trung Luong – My Thuan highway project was national key project, affirmed by Prime Minister as a politic commitment with 20 million people in Mekong Delta; as well as being a material transportation route, a leverage for economic – social takeoff of a large area, contributing in country general growth.
Implementation in 2009, after many halfway, overdue construction times, the project was currently standing up with bustling working atmosphere after a decade of stagnancy. Many issues had been, step by step, untied by Prime Minister, Tien Giang Province and Ministries, Departments quickly to kept the promise with people of Mekong Delta.
State Budget capital, which is 2,186 billion VND supporting for the Project would be disbursed in 2019, in addition with work force, determination of investor and high responsibility sense of Tien Giang Province People’s Committee, route transportation mark completion in 2020 had a basis to be manageable. However, for Project to complete on schedule in 2021, it depended on credit capital for project from banks. Therefore, a decisive answer and particular act from Joint Stock banks sponsoring capital for the project needs to be done clearly, in order to avoid project in passive stage, stagnant, impact quality and schedule progress, in the time that project completion time is not much.
Dang Phuong – Minh Anh
