Proposal to add VND38,251 billion in charter capital to the highway giant

Proposal to add VND38,251 billion in charter capital to the "big guy" of the expressway

This is an important resource for Vietnam Expressway Corporation to complete the Ben Luc - Long Thanh Expressway, expand the Ho Chi Minh City - Long Thanh - Dau Giay Expressway and the Lao Cai - Yen Bai Expressway.

A section of Cau Gie - Ninh Binh expressway invested by VEC.

The State Capital Management Committee at Enterprises has just submitted a document to the Government on the investment plan to supplement charter capital for the period 2024 - 2026 for the parent company - Vietnam Expressway Corporation - VEC.

Accordingly, the State Capital Management Committee at Enterprises proposed that the Government consider and approve the report to the National Assembly to decide on the investment policy to supplement the charter capital for the parent company - VEC in the period of 2024 - 2026 at VND 38,251 billion.

This amount includes 1,562 billion VND from the Enterprise Development Investment Fund, 36,689 billion VND from the state budget disbursed for investment in the construction of 5 expressway projects invested by VEC (10,062 billion VND of counterpart capital from the state budget, 24,127 billion VND of ODA capital in projects implemented in the form of converting loan capital for re-lending into state budget allocation, 2,500 billion VND of state budget allocation capital for the Noi Bai - Lao Cai and Cau Gie - Ninh Binh projects).

In case of approval by competent authority, the additional charter capital of the parent company - VEC in the period of 2024 - 2026 is 39,366 billion VND.

According to the leader of the State Capital Management Committee at Enterprises, implementing the tasks assigned by the Government, VEC is the investor of 5 expressway projects (550km with a total investment of 108,865 billion VND; state budget capital accounts for 44.4%, VEC mobilized capital accounts for 55.6%).

Currently, VEC has completed and put into operation 4/5 projects (490km, accounting for about 27% of the total length of expressways in Vietnam).

According to the Development Strategy to 2030, vision to 2035; production and business plan and development investment to 2025 approved by the Committee, VEC will balance from equity capital to replace public investment capital to implement the Ben Luc - Long Thanh Expressway Project (VND 7,547.57 billion), invest in expanding the Ho Chi Minh City - Long Thanh section of the Ho Chi Minh City - Long Thanh - Dau Giay Expressway Project (total investment of about VND 15,000 billion), invest in expanding the Yen Bai - Lao Cai section of the Noi Bai - Lao Cai Expressway Project (total investment of about VND 7,000 billion).

On the other hand, the total expected investment for the 2021-2025 period is 14,890 billion VND, and for the 2026-2030 period is 17,053 billion VND, while the current charter capital of the parent company - VEC is very low (1,115 billion VND) compared to the investment scale (about 108,865 billion VND).

Therefore, VEC is facing difficulties in mobilizing capital sources to invest in expressway projects, ensuring the completion of the 5-year production, business and investment development plan for the period 2021 - 2025, the Development Strategy to 2030, vision to 2035 (investment capital demand for the period 2021-2025 is 14,890 billion VND, the period 2026-2030 is 17,053 billion VND), especially for capital sources with low capital costs such as commercial loans and construction bond issuance.

On the other hand, recognizing the capital contribution of the State owner through the value of assets formed from investment activities, enhancing the effectiveness of State investment capital, creating conditions for VEC to develop sustainably; strengthening financial capacity, ensuring the implementation of commitments to customers and financial partners, improving access to credit, ensuring the basis for depreciation and accounting for assets such as expressways, promoting the core/leading role in investment/management and operation of expressways.

“Therefore, the investment in additional charter capital for the parent company - VEC is necessary and urgent, in accordance with the policies/tasks assigned by the Central Party, the National Assembly, and the Government, ensuring the completion of the 5-year production, business and investment development plan for the period 2021 - 2025, the Development Strategy to 2030, with a vision to 2035”, said the representative of the owner of the State capital portion at VEC.

Regarding VEC's production and business results, according to the leader of the State Capital Management Committee at Enterprises, in the last 3 years (2021 - 2025), the parent company - VEC achieved a total revenue of VND 20,556 billion, pre-tax profit of VND 3,469 billion; ranked as a type A enterprise for 3 consecutive years.

Source: https://baodautu.vn/de-xuat-bo-sung-38251-ty-dong-von-dieu-le-cho-ong-lon-duong-cao-toc-d227927.html