HANOI – Investors of three subprojects executed under the public-private partnership (PPP) model of the North-South Expressway—Dien Chau-Bai Vot, Nha Trang-Cam Lam and Cam Lam-Vinh Hao—are finding it hard to access bank loans, according to a report sent by the Government to the National Assembly.
The difficulties were attributed to the requirements of banks to apply articles on revenue sharing in line with Article 82 of the Law on the Public-Private-Partnership Investment.
Specifically, the article regulates that if real revenue from a project is higher than 125% of the revenue estimated in the project’s contract, the investor and the project owner will share half the balance between the real revenue and the 125% level of the estimated revenue with the State.
If the real revenue is lower than 75% of the estimated revenue, the State will share half the balance between the 75% level of the estimated revenue and the real revenue with the investor and the project owner.
However, when the Ministry of Transport built the three PPP North-South subprojects, the Law on Public-Private-Partnership Investment was yet to be issued. Therefore, the three subprojects cannot apply the revenue-sharing policy as required by banks.
To eliminate the difficulties, the investors and enterprises in charge of the three subprojects have worked with banks to arrange loans for the subprojects and mobilized other legal capital resources, such as increasing the equity and issuing corporate bonds.
The three projects were expected to be completed in 2023 and 2024.
According to the Government, the investment model of these projects was complicated and the processes of bidding, investor selection, negotiations and contract signing had taken place amid the changing of relevant regulations.
In addition, the Law on Public-Private-Partnership Investment, which took effect on January 1 this year, has prolonged the negotiation and contract signing time.
The investors of the three projects have been chosen and the Ministry of Transport has signed PPP contracts with the investors.
As for preparations for their execution, the sites have been handed over for the Dien Chau-Bai Vot and Nha Trang-Cam Lam subprojects. The design formulation, contractor selection and manpower and equipment mobilization are underway.
Meanwhile, the company in charge of the Cam Lam-Vinh Hao subproject has coordinated with localities it will pass through to soon take over the site for the subproject and has conducted preparations to start work on the project.