Long-delayed key southern expressway exits financial bottleneck

By Anh Duy   December 16, 2019 | 02:06 am PT
Long-delayed key southern expressway exits financial bottleneck
A section of the Trung Luong-My Thuan Expressway under construction. Photo by VnExpress/Quynh Tran.
Four banks will provide VND6.69 trillion ($288 million) for the Trung Luong-My Thuan Expressway, much delayed for lack of capital.

Trung Luong-My Thuan BOT JSC, developer of the build-operate-transfer (BOT) expressway project, linking HCMC with the Mekong Delta, signed a loan agreement with three state-owned lenders and one private bank on Monday.

State-owned lenders VietinBank, BIDV and Agribank, will provide VND3.3 trillion ($142 million), VND1.5 trillion ($64.5 million) and VND1 trillion ($43 million) respectively, while private bank VPBank provides the remaining VND886 billion ($38 million).

The lack of financing had been the final bottleneck to project completion, said Tran Van The, Deputy General Director of the Trung Luong-My Thuan BOT JSC.

Previously, work had to be halted because the company failed to reach an agreement on bank loans and other investment requirements.

"After the State Bank's intervention, all procedural requirements and concerns over risk have been dealt with," The said.

Due to difficulties in capital disbursement from co-financing banks, the government in August approved the sum of VND2.19 trillion ($94.2 million) in supplementary capital from the state budget to push forward construction. So far, VND1.39 trillion ($59.8 million) has been disbursed to Trung Luong - My Thuan BOT JSC.

Construction is 30 percent complete, contractors are working three shifts a day to ensure the project is finished by the end of 2020 as planned, said The.

Construction of the 51-kilometer expressway that will cross five districts in southern Tien Giang Province began in 2009 and was to be completed in 2013, but suffered multiple delays as one investor after another pulled out.

The total cost of the project is over VND12.67 trillion ($545 million), raised from the original figure of VND9.67 trillion ($416 million) after 10 years of delay. 

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