Major anti-flooding project in HCMC misses deadline for four years

By Gia Minh   March 27, 2022 | 02:01 am PT
Major anti-flooding project in HCMC misses deadline for four years
A section of HCMC's Tran Xuan Soan Street is flooded during high tides, November 2021. Photo by VnExpress/Gia Minh
It is 90 percent complete, but contractual and payment issues have caused a HCMC VND10 trillion ($437.3 million) anti-flooding project to miss its completion deadline for four years.

The project aims to manage high tide flooding and respond to climate change effects over an area to the right of the Saigon River and downtown HCMC, spanning 570 km2 and home to 6.5 million people.

Invested in by the Trung Nam BT 1547 company under the build-transfer model, it runs through districts 1, 4, 7, 8, Nha Be and Binh Chanh with six drainage gates. The project also involves dykes spanning 7.8km along the Saigon River.

Construction of the anti-flooding project began in 2016 and was supposed to finish in 2018, but it had to be suspended once in 2018 due to land clearance issues, and another time in 2020 due to the Ho Chi Minh City People's Committee not signing a contract extension.

A main block has to do with payment methods for the investor. The fact that the HCMC People's Committee signed a build-transfer contract with the investor, where the amount of land the company receives as payment is only worth 16 percent of the project's cost (while the rest would be paid in cash), is now considered inappropriate.

The government issued a resolution last year holding HCMC authorities responsible for the completion of the project, as well as to cut down "irrational" expenses to ensure completion.

However, despite the government's efforts, the project remains stuck due to problems with the build-transfer contract that stop the bank from extending the duration for the disbursement of the project's funds.

The prolonged delay has driven up costs, including interest on loans, personnel and machinery fees to the tune of over VND600 billion.

Tran Nhu Quoc Bao, deputy director of the management board for urban infrastructure investment and construction projects, said the HCMC People's Committee has discussed the issues with the State Bank and other relevant authorities to finish the project soon.

"Alongside negotiations, HCMC is looking through proposals to use certain land as payment to the investor," he said, adding that they are aiming to have the project completed this year.

Pham Thanh, 55, a resident of Ho Chi Minh City's District 7, said the prolonged delay was disappointing.

"Six years ago, the city's largest anti-flooding project ever began construction. The joy we had back has been replaced by disappointment as the project constantly missed its deadlines," Thanh said Friday.

As the rainy season approaches, Thanh fears that heavy rains coupled with high tides would once again flood Tran Xuan Soan Street where he lives, disrupting traffic and daily life.

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