Funding for key expressway suspended to replace dubious investor

By Doan Loan   February 1, 2019 | 05:00 am PT
Financers have halted disbursement for the Trung Luong – My Thuan expressway till an investor involved in criminal proceedings is replaced.

Trung Luong - My Thuan BOT JSC, the joint venture company in charge of constructing the 51km expressway, has petitioned the Prime Minister and Ministry of Transport to replace one of the project’s current investors whose presence is delaying the project.

When completed, Trung Luong - My Thuan Expressway will connect with HCMC - Trung Luong Expressway, linking HCMC with southern Tien Giang Province.

The financing bank has refused to disburse funds for the project because Yen Khanh Ltd, an investor contributing 30 percent of joint venture capital, has been implicated in several criminal cases recently.

Last December, the company’s CEO and five other executives were arrested for tax evasion and criminal misuse of land.

The project has a registered capital of VND9.67 trillion ($415.23 million) and is scheduled for completion by the end of 2020. A joint venture of six investors are to contribute 30 percent of the project’s cost (VND2.8 trillion or $120.23 million), while the remaining comes from bank loans.

Work originally began in 2009 on the 51-kilometer expressway that would run through five districts in Tien Giang, but suffered prolonged delays with investors unable to disburse their share of investment.

In October 2014, the project was reapproved under the BOT model (Build-Operate-Transfer), with supplemental funding from toll fees collected on the Ho Chi Minh-Trung Luong Expressway.

Construction of the Trung Lung-My Thuan Expressway restarted in February 2015, but the project has lagged behind schedule with the latest funding bottleneck.

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