" The project to solve flooding caused by high tides in Ho Chi Minh City area taking into account climate change factors" has just been included by the Ho Chi Minh City People's Committee in the list of typical city-level projects competing to celebrate the 50th anniversary of the Liberation of the South and National Reunification Day (April 30, 1975 - April 30, 2025).
Vice Chairman of Ho Chi Minh City People's Committee Bui Xuan Cuong was assigned to be in charge of the project with the goal of completing it by April 30, 2025.
The project started in mid-2016 and is expected to be completed in 2018 to control tidal flooding and respond to climate change over an area of 570 km², serving about 6.5 million people along the Saigon River and the central area of Ho Chi Minh City.
However, the project has been delayed for up to 6 years, although the project is now more than 90% complete. The project construction process has been suspended three times, the first time lasting 10 months, the second time for 8 months and the most recent time from November 15, 2020 to present.
According to Trung Nam Construction Investment Joint Stock Company (investor), many procedural problems have not been resolved. Notably, the total investment of the project has not been adjusted.
Investors calculate that the total investment is expected to increase from VND 9,976 billion to VND 14,398 billion . Interest alone, by July 26, 2024, has reached VND 2,369 billion, with an average daily interest rate of more than VND 1.7 billion.
In early May 2024, BIDV Bank - the intermediary unit receiving re-lending capital from the State Bank to finance Trung Nam Company to implement the project, announced that the investor's loan of VND 7,095 billion was overdue for principal payment of VND 6,008 billion and interest debt of VND 1,715 billion.
In addition, the issue of land fund payment to investors has not been implemented by the Ho Chi Minh City People's Committee. Although there are no specific regulations on the payment ratio in land fund and cash, the Ho Chi Minh City People's Committee signing a BT (build - transfer) contract with a land fund payment ratio of only 16% of the total project cost, the rest in cash, has been assessed as not entirely appropriate.
In April 2023, when working with the Prime Minister, Ho Chi Minh City proposed to allow the city to balance its own land fund and budget capital to pay for BT contracts, not applying the fixed rate of 16% in land and 84% in cash as before. For the interest incurred, the city will negotiate with the investor and can pay with land fund.
The Government has also established a special task force to resolve the project’s problems. The task force has proposed three options, of which the option of entrusting the budget for investors to continue borrowing and completing the project is considered the most feasible.
According to Mr. Quach Ngoc Tuan - Deputy Director of the Department of Planning and Investment of Ho Chi Minh City, the city has reported to the Government Working Group on the difficulties in paying for BT contracts, as well as proposed solutions to issue a new Resolution. This is to remove obstacles in payment mechanisms, mobilize capital to complete the project, adjust the total investment, etc.
Mr. Tuan also emphasized that if the difficulties are resolved, the investor commits to completing the project within 6 to 8 months from the date of disbursement.
