HCMC – The construction of the Ben Luc-Long Thanh expressway project, connecting HCMC and the Long An and Dong Nai provinces, has been suspended due to severe capital shortage.
Vietnam Expressway Corporation (VEC), the investor of the expressway project, has written to the ministries of Planning and Investment, Justice, Transport and the State Audit Office of Vietnam, proposing the removal of obstacles facing the country’s key project, triggered by a serious funding shortfall.
Eight packages sponsored by the Asian Development Bank (ADB) and executed since May 2015 to date have seen over VND4.4 trillion disbursed, equivalent to 72.6% of the contract value. However, many contractors refused to continue work on the project as they have not been paid for the completed works.
After the ADB’s first loan agreement worth US$350 million expired in June last year, the contractors stopped working on the project due to capital shortage. Regarding the bank’s second loan agreement worth US$286 million, as it has not been extended, the contractors stopped the construction in early 2020.
VEC has yet to inspect the completed work as well as make payments to the contractors, as the investor is waiting for an extension of the second loan agreement.
Earlier, in August this year, the Ministry of Finance had proposed to ADB to extend the second loan agreement to December 31, 2023.
To facilitate the implementation of the project, VEC requested the ministries to seek the bank’s approval for the extension.
VEC added that the project needs US$17 million of funding for this year, US$87.7 million for 2021, US$53.2 million for 2022, and US$54.13 million for 2023.
Aside from the obstacles in foreign loans, the project has not received reciprocal capital financed by the State budget since January 2019. Accordingly, localities through which the expressway runs could not complete site clearance and handover processes.