Funds shortage holds up HCM City-Tien Giang expressway
Construction of the 61.9-kilometer road connecting the southern metro with Tien Giang Province began in 2004 and was scheduled to finish at the end of 2007 at a cost of VND6.5 trillion (USD369.3 million). But the cost has since climbed to VND9.8 trillion. Around 80 percent of the work has been completed at a cost of VND6.5 trillion.
The Ministry of Transport has, on several occasions, suggested using advance funds from the 2010 budget to complete the project. However, the Ministry of Finance said advancing money for transportation-related works is not easy and, instead, suggested selling the right to operate the expressway and collect toll to raise money. The PM has ordered the Bank for Investment and Development of Vietnam (BIDV) to draft a plan to sell the toll rights.
BIDV submitted a proposal in July 2007 for buying a 60 percent stake in the project by paying VND5.3 trillion. However, the bank can only raise VND807 billion from its own resources, with VND4.5 trillion to come from foreign loans. BIDV seeks to collect toll for 60 years.
In a communication to the Prime Minister last December, Deputy Minister of Transport Ngo Thinh Duc said BIDV’s plan is not feasible and the bank does not have the capacity to raise the funds. His ministry asked BIDV to furnish plans for raising money by the end of 2008, but has yet to hear from the bank.
Last month Deputy Prime Minister Hoang Trung Hai, head of the steering board for key traffic projects, said the Government had approved advance allocation from the 2010 budget to complete the expressway this year. The proposal is now awaiting the Prime Minister’s clearance.
