Both of the above projects were implemented by Ho Chi Minh City under the form of BT (build - transfer) contracts.
The Ho Chi Minh City tidal flood resolution project taking into account climate change factors (phase 1) started in 2016 with a total investment of nearly VND10,000 billion.
Although more than 90% of the project has been completed, the project has been forced to temporarily suspend construction since November 2020 due to difficulties in allocating capital and completing legal procedures. The prolonged delay has caused large additional costs, with the daily interest alone reaching more than 1.7 billion VND.
Similarly, the Ring Road 2 project, section 3 (nearly 2.8 km long, from Pham Van Dong Street to Go Dua intersection, Thu Duc City) has a total investment of more than VND 2,700 billion (including site clearance costs), starting in 2017.
Since March 2020, when the construction volume reached 43.8% of the contract value, the project has stopped construction, currently generating a loan interest of more than 15 billion VND per month.
The reason is that the project has not signed a contract appendix and the investor has not received the land fund to pay according to the BT contract. In addition, the site clearance work has not been completed yet.
Faced with this situation, the Ho Chi Minh City People's Committee has proposed that the Government remove difficulties so that the two projects can soon continue to be implemented.
For the VND10,000 billion flood prevention project, Ho Chi Minh City proposed that the Prime Minister allow adjustment of the project's feasibility study report without having to re-implement the procedures to adjust the investment policy. At the same time, it recommended directing the State Bank to continue refinancing and requested BIDV to consider exempting or reducing interest arising from delays due to objective reasons.
Regarding the payment plan, Ho Chi Minh City proposes to use 3 land plots identified in the BT contract to pay corresponding to the completed project value. The remainder will be paid in cash from public investment capital.
For the completed and audited work volume, Ho Chi Minh City proposed to be immediately paid more than VND 3,043 billion from the annual public investment plan.
For the Ring Road 2 project, section 3, Ho Chi Minh City proposed to prepare, appraise and approve the adjustment of the feasibility study report, including reviewing and adjusting the project's financial plan to have a basis for continued implementation.
Recently, the Ministry of Finance submitted to the Government a draft resolution to remove difficulties for the two above-mentioned projects.
The Ministry of Finance stated that resolving problems is necessary to avoid wasting resources and handling long-standing problems arising from changes in legal policies between periods.
According to the proposal, the Prime Minister decided to let the Government discuss and decide to approve the adjustment of the feasibility study report of projects; It is not necessary to restore the investment policy of the tide project of VND 10,000 billion.
The Ho Chi Minh City People's Committee is assigned to be responsible for carrying out procedures for preparing, appraising, adjusting feasibility studies and is fully responsible for the adjustment decision.
Regarding the land fund for the tidal prevention project of VND 10,000 billion, if the land is subject to rearrangement and handling of public assets, it is under the authority of the Ho Chi Minh City People's Committee according to the provisions of Resolution 98 of the National Assembly.
In case the land fund is cleared by the State, it will comply with the provisions of Decree 69/2019/ND-CP (amended and supplemented in Decree 35/2021/ND-CP).
If the value of the paid land fund is lower than the value of the BT project (after eliminating unreasonable costs), the difference will be paid in cash from the public investment capital managed by Ho Chi Minh City.
