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Wednesday, January 27, 2021

New investment methods needed for HCMC’s delayed underground parking projects

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HCMC – The HCMC authorities should determine the fate of the various underground parking projects within the city center and seek new investment methods to spur their development, instead of sticking to the old foot-dragging methods that have delayed the projects for a decade.

The city had planned to construct four underground parking lots at Le Van Tam Park, Trong Dong Music Stage Theater, Hoa Lu Stadium and Tao Dan Cultural Park; however, the most anticipated parking lot at the Le Van Tam Park is yet to be executed to date despite getting off the ground in 2010.

Project already used as collateral before construction

One year ago, the HCMC Transport Department sent a notice to the Investment and Development for Underground Space Corporation (IUS), the project’s investor, to terminate the contract of the Le Van Tam underground carpark but IUS did not carry out the contract termination procedures as requested.

On June 23 this year, the Transport Department sent a second notice over the termination of the contract ahead of time, requesting IUS to contact it to carry out the procedures within 30 days since the date the second notice was sent.

If IUS continues to ignore the notice, it can be deemed that IUS agrees with the contract termination ahead of time and will not make further complaints. The terms dictated in the contract would nullify starting July 30, the department said.

However, on July 30, an HCMC branch of Dong A Bank wrote to the municipal government saying that IUS took out a loan from the bank to execute the project after the city chose it as the project’s investor. Also, IUS used the project as collateral for the loan.

Currently, the creditor and IUS are seeking business partners to transfer the entire project to tackle IUS’s bad debts, as the investor is unable to pay for the loan. Accordingly, Dong A Bank suggested that the city administration and relevant agencies assist with transferring the project to a new partner in a convenient manner.

As for IUS, it expected the city government to create favorable conditions for it to overcome the existing obstacles to continue with the project as well as to pay off its debts to the bank. IUS is working with foreign partners who wish to join the project and proposed that the city government extend the duration of the implementation of the contract.

In response, the municipal government stated that Dong A Bank and IUS must take on responsibilities to settle the loan and relevant debts.

In need of new investment methods

As for the underground carpark project at the Trong Dong Music Stage Theater, which was approved in 2015, its design had to be revised due to part of the design overlapping with that of the Ben Thanh-Tham Luong metro line project, the city’s second urban railway.

According to the project’s investor, the changes in design cost over VND9 billion and delayed the implementation of the project, leaving the investor confused as the investor was not informed that the project’s design would overlap with that the metro line.

Further, Dong Duong Group and the HCMC Department of Planning and Architecture recently failed to reach a consensus over changing the function of the project’s first floor.

Dong Duong was set to break ground on the project this year but it might be postponed to next year if obstacles related to zoning issues are not removed.

For the Tao Dan underground carpark, its first investor, Infrastructure Development Investment JSC, or IDICO, had withdrawn from the project. The Saigon Times discovered that Vietnam’s largest private conglomerate Vingroup also withdrew from two underground parking lots at Tao Dan Park and Hoa Lu Stadium as its proposals were rejected by the city government.

Late last year, the HCMC Management Board for Investment and Construction of Traffic Project was asked to conduct investment procedures and feasibility studies for the Tao Dan and Hoa Lu underground carparks to select appropriate investors.

By Le Anh

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