Recently, Trung Nam Construction Investment Joint Stock Company (Trung Nam Company) - the investor, sent a document to Chairman of Ho Chi Minh City People's Committee Phan Van Mai, requesting consideration of adjusting investment capital for the Project to solve flooding caused by tides in Ho Chi Minh City area taking into account climate change (phase 1).
Construction started in mid-2016, although 93% of the work was completed, the project was continuously delayed due to difficulties in payment procedures, resulting in a delay of more than 6 years compared to the plan.
The project has had to stop construction three times with a total interruption time of up to 66 months, of which the most recent suspension lasted from November 15, 2020 to now, more than 48 months.
The investor said that the prolonged suspension was beyond their control and not their responsibility, but had caused a daily interest of VND1.73 billion. These additional profits must be recorded in the project by adjusting the total investment value.
Trung Nam Company proposed that the Ho Chi Minh City People's Committee adjust the total investment for the project from nearly VND10,000 billion to VND14,398 billion to match the new schedule, expected to be completed by the end of 2025.
As of October 18, 2024, total interest expense has reached VND 2,513 billion.
On October 28, the investor continued to send a document to the Standing Committee of the City Party Committee and the Party Committee of the Ho Chi Minh City People's Committee to emphasize the waste of budget if the project continues to stagnate.
Trung Nam Company warned that if investment adjustment procedures are not carried out soon, after the capital source is resolved, the project completion time may take another 28 months - including 12 months for handling procedures, 4 months for negotiating contract appendices and 12 months for construction of the remaining part.
With each passing day, the interest payable increases, expected to generate an additional VND845 billion for 16 months of procedures.
In addition, the land fund expected to be paid to investors under the BT contract has not yet been handed over even though it is available. The Ho Chi Minh City People's Committee is currently assigning the Department of Natural Resources and Environment to develop a land fund payment process for BT projects and wait for official issuance to continue implementing the procedures.
To complete the remaining part of the project, the investor said it needs about VND1,800 billion and emphasized that the Ho Chi Minh City People's Committee and relevant departments have met many times to resolve difficulties, but so far have not been able to access loan capital.
The investor proposed that the leaders of Ho Chi Minh City support the adjustment of the total investment and payment by land fund to reduce the principal and interest debt, creating favorable conditions to access bank capital, thereby completing the project.
On the government side, the Ho Chi Minh City People's Committee has reported to the Government and the National Assembly solutions, including proposing that the Prime Minister allow overall adjustments to the project, from changing investment capital to extending the implementation period.
However, the complicated procedures of the adjustment process require a long time, so Ho Chi Minh City proposed adjusting the payment plan in parallel with the investment procedures so as not to interrupt the construction progress.
After the BT contract appendices are adjusted, Ho Chi Minh City will have a legal basis to pay with land funds, thereby helping investors reduce the burden of interest while waiting for the completion of legal procedures, minimizing costs and avoiding budget waste.
