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Friday, March 5, 2021

Anti-flooding project suspension causes huge losses

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HCMC – The anti-flooding project worth some VND10 trillion in HCMC, whose construction was suspended since mid-November last year, had caused losses of VND45 billion by December 15, including costs for workers, equipment, storehouses for equipment, and loan interest, according to the project’s investor.

Trung Nam Group’s subsidiary Trung Nam BT 1547 Co., Ltd, the investor of the project, reported to the HCMC government the losses caused by the suspension of work on the project, news site VnExpress reported.

The build-transfer contract for the project between the group and the HCMC government, which was signed on November 18, 2019, expired on June 26, 2020, but the two sides have yet to sign an appendix to extend the deadline of the project. Therefore, the project has no legal foundation to continue.

The tardiness in signing the appendix was attributed to the disagreement between the two sides over the payment method. The central Government had earlier allowed the city to use land to make payments. If the land fund was not enough, the city would pay in cash.

The city later proposed that land would be used to make 15% of payments and cash would be given for the remainder, but the Government rejected the proposal.

The municipal government directed the investor to continue with the execution of the project but the work has been suspended.

To remove obstacles facing the project, Trung Nam BT 1547 Co., Ltd proposed the city work with the State Bank of Vietnam to immediately resume the project, as besides economic losses, it will need more than five months to resume the project due to a number of procedures.

Up to date, the Bank for Investment and Development of Vietnam (BIDV) has allocated more than VND7 trillion, or 80% of the approved loans, for the project. Both the investor and BIDV have informed the city of the payment of loans of more than VND2.6 trillion which matured on November 15, 2020, but the city has yet to pay the loans.

The first phase of this flood tide control project, with the impact of climate change taken into account, started in June 2016.

The project was expected to help control flood tides for an area of some 570 square kilometers, with some 6.5 million residents on the right bank of the Saigon River and downtown.

The project is over 93% complete. The investor had earlier affirmed that the project could be completed in October last year if it received enough of the cleared site. However, the cleared site has not been handed over to Trung Nam as planned.

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