VND1.2 trillion advanced for road projects

Trinh Dinh Nghi, director of the office of the directorate, told his agency has been entrusted as owner of 101 projects with total capital of VND2.83 trillion planned for this year’s capital construction.

As of the end of June, the agency had carried out projects worth an estimated VND2.46 trillion and had more than VND1.31 trillion disbursed, Nghi said. This means there will be a severe shortfall of capital to continue deploying the projects in the rest of the year, he noted.

Of the VND1.21 trillion requested as advance, VND881 billion is to be sourced from the Government bond sales and the remainder is funded by the State Budget, Nghi stated.

In 2011, the Ministry of Transport demanded to halt the construction of 75 ongoing projects totaling VND1.42 trillion in line with the policy to cut the public investment at that time.

With the advanced fund allocation, the first project of the transport industry to be re-started is the one to upgrade the road section from Ninh Thuan to Lam Dong provinces as part of the National Highway 27. 

* The HCMC Department of Transport finds it difficult to secure capital for developing elevated roads and monorail systems to reduce traffic congestion in the locality from now to 2015 as planned.

The list of the key projects in the 2011-2015 period includes the tramway No.1 Saigon – Cho Lon - Mien Tay Coach, the monorail No.2 linking Nguyen Van Linh Street in District 7 to Thu Thiem, the tramway No.3 from Go Vap Intersection to Quang Trung Software and Tan Thoi Hiep, and the urban railway route No.6 from Ba Queo to Phu Lam Intersection.

According to Bui Xuan Cuong, deputy director of the department, the elevated roads No.1 and 3 have been re-started but there are still no investors for the projects’ deployment.

The biggest problem faced by relevant authorities in executing the projects is capital mobilization as the four elevated road projects alone require a combined cost of up to over VND50 trillion, or some US$2.4 billion. Therefore, the authorities are trying to call for investment into the projects via the formats of build-operate-transfer (BOT) build-transfer (BT) or public-private partnerships (PPP).

In fact, the construction of a number of schemes like the tramway No.1 and the elevated road No.1 have been suspended due to the withdrawal of the investors for some reasons. Meanwhile, the consortium of Thanh Danh Construction and Trading Company and Malaysia’s Titanium Management Company in charge of the tramway No.1 project has withdrawn from the project because of failing to reach a same voice in the project deployment.

Similarly, the projects to build elevated roads No.1 and 2 under the investors from South Korea and Malaysia have come to a dead halt due to financial constraints.