Consortium gets yellow card for expressway delay
Consortium gets yellow card for expressway delay
The investor and the oversight body have just received a ‘yellow card’ from the transport authority for poor performance on the Trung Luong-My Thuan expressway project in the southern region.
Deputy Minister of Transport Nguyen Van The recently issued a warning towards the project’s related parties at a meeting to review the progress of this major southwestern highway, as the parties had failed to meet most of their progress targets on capital contribution and land acquisition.
Six months after re-launching, the investor consortium at the Trung Luong-My Thuan expressway project has still fallen short of their capital contribution commitment, as regulated in the build-operate-transfer (BOT) contract.
The investor is a consortium consisting of Tuan Loc Investment Construction JSC, Yen Khanh Production and Trade Services Company Limited, BMT Construction Investment JSC, Thang Loi Group Limited, and Hoang An JSC.
According to a recent report submitted by the Cuu Long Corporation for Investment, Development, and Project Management of Infrastructure (Cuu Long CIPM), late last month, the project enterprise Trung Luong-My Thuan BOT Company could only contribute 91 per cent of the required equity capital, amounting to VND1.408 trillion ($64.5 million) out of VND1.542 trillion ($70.7 million).
Cuu Long CIPM was tasked by the Ministry of Transport (MoT) to act as the project oversight body.
“The project has been resumed for over six months now, but to date, we have yet to receive any report from the investor about their commitment to fulfilling capital contribution as required in the BOT contract,” said Duong Tuan Minh, general director of Cuu Long CIPM.
In the past three months, Cuu Long CIPM had sent documents several times requiring the investor to submit a proof (the project enterprise bank account surplus) as a confirmation of the latter’s commitment to fulfilling their [capital pooling] obligation, but there was no response.
Not only did the investor fail in their capital pooling commitment, the project oversight body - Cuu Long CIPM - has also missed their target of finalising compensation and land acquisition before August 15, 2015 as required by the MoT.
“Many projects are being developed in the area, making it hard for us to concentrate sufficient manpower on implementing this project’s site clearance work,” said a source from Cuu Long CIPM.
Deputy Minister of Transport Nguyen Van The assumed the less-effective management of the project enterprise and the oversight body had caused such delays.
In respect to site clearance, The has asked the Trung Luong-My Thuan BOT Company and Cuu Long CIPM to work closely with local authorities to ensure completion of this phase before the end of this year.
As for the project’s pace, The has required the Transport Construction and Quality Management Bureau under the MoT to evaluate the project record and prepare a plan to replace the project oversight body, in case no progress was reported in the upcoming time.
“The oversight body and the Trung Luong-My Thuan BOT management board both lack professionalism. Meanwhile, the investor also needs to change their management approach. The MoT will apply strong measures in case of no improvements,” The noted.
The Trung Luong-My Thuan expressway project involves building a 51km highway and 4.5km approach road at a total investment capital of VND14.6 trillion ($673 million) under the BOT form.
The project construction, initially kicked off by the Expressway Investment Development Joint Stock Company under state-owned Bank for Investment and Development of Vietnam (BIDV) in November 2009, became suspended due to the investor facing capital constraints. It was resumed in February this year.
