Deo Ca proposes solutions to overcome difficulties for a series of PPP transport projects

PPP projects face financial difficulties

Deo Ca Group Joint Stock Company has just sent a report, recommending the Prime Minister to consider and remove some obstacles and solutions related to key traffic projects.

Despite efforts to coordinate with local authorities to find solutions, some PPP projects in Deo Ca traffic that have been invested in have still encountered many financial difficulties.

Financial difficulties in implementing some expressway projects under the public-private partnership (PPP) model are one of the important issues that Deo Ca Group included in its petition.

This enterprise said that for the Dong Dang - Tra Linh expressway project, since the start of construction (January 1, 2024) up to now, the consortium of investors and contractors has advanced nearly 350 billion VND to organize construction and support site clearance work.

State budget capital has disbursed 300/6,580 billion VND.

To mobilize resources to implement the project, the project enterprise signed a credit contract with VPBank.

However, the disbursement has not been implemented because the project has not been approved to adjust the investment policy when increasing the state budget capital to 68.76% of the total investment according to Resolution No. 106/2023/QH15 dated November 28, 2023 of the National Assembly.

"Deo Ca Group recommends The Prime Minister has directed the Government Office and the Ministry of Planning and Investment to have a plan and specific instructions for the project to complete the procedures for approving adjustments to the investment policy," the document stated.

Reporting on the difficulties of the Huu Nghi - Chi Lang expressway project, according to Deo Ca Group, in this project, the BOT contract only applies the mechanism of sharing increased revenue, without the mechanism of sharing decreased revenue.

On the other hand, the state budget capital participating in the project was proposed to be more than 50% of the total investment, but the People's Committee of Lang Son province had to adjust it down to ensure the prescribed ratio.

The adjacent project, the Bac Giang - Lang Son expressway, has been stalled for nearly 5 years, with 0% state budget participation.

Traffic exploitation is much lower than initially forecasted due to objective reasons such as: removing a toll station on National Highway 1, widely exempting and reducing ticket prices... leading to actual revenue being only 39% of the initial financial plan.

"The above difficulties make it difficult for investors to continue borrowing capital to implement PPP projects in the coming time, including the Huu Nghi - Chi Lang project," Deo Ca Group shared.

Perspective of Huu Nghi - Chi Lang highway.

Increasing State capital contribution in new PPP projects

To facilitate the implementation of PPP projects, Deo Ca Group also proposed that the Prime Minister consider the proposal to increase the proportion of State budget capital to 70% of the total investment so that banks have a basis to finance the project.

For the Tan Phu - Bao Loc expressway project, according to Deo Ca Group, the proportion of State budget capital participation is only 36%, the investor must mobilize a very large amount of capital (about 9,877 billion VND).

In the petition sent to the Prime Minister, Deo Ca Group also made a number of proposals to help domestic enterprises soon take the lead in investing, producing, and constructing projects requiring high technology and engineering (high-speed railways, Metro, etc.).

Specifically, state management agencies will increase the organization of study tours and research on models of foreign enterprises and training schools that have experience in implementing similar projects.

The specialized ministry develops and issues specialized standards, norms, and BIM models to apply to transport projects.

For large-scale projects, priority is given to domestic enterprises with management capacity and specific products to lead, connect, and train other enterprises.

The project also did not apply the revenue sharing reduction mechanism, leading to the project not having its feasibility study report approved.

In case of applying the State credit loan plan to compensate, there will be problems due to Decree 78/2023/ND-CP dated November 7, 2023 of the Government (requiring a different equity ratio than the PPP Law).

"In Conclusion Notice No. 423/TB-VPCP dated September 17, 2024, Deputy Prime Minister Tran Hong Ha directed the amendment of Decree No. 78/2023. However, the amendment of the decree may take from 6 months to 1 year.

"To soon implement the project, the investor proposed the project to agree with the Lam Dong Provincial People's Committee not to adjust the investment policy and proactively balance the financial plan.

"Relevant parties need to identify and resolve difficulties and obstacles while working, continue to adjust and increase the State budget capital to ensure 50% as prescribed by the PPP Law to be consistent with the appraisal opinions of the State Bank, the Ministry of Planning and Investment, and credit institutions interested in the project," Deo Ca Group proposed.

Creating a mechanism for businesses to participate in high-speed railway projects

Expressing interest in the North-South high-speed railway project, which has just been approved by the Central Government for investment, Deo Ca Group said that recently, many construction units of large packages of the North-South expressway project in the 2021-2025 period are determined to complete the project by the end of 2025.

After 2025, human resources, machinery and equipment of enterprises will be stagnant. Based on this reality, Deo Ca Group proposed that the Government have a mechanism to create conditions for enterprises to continue participating in the North-South high-speed railway project.

The implementation of the high-speed railway project is also proposed to be divided into two components.

In which, component 1 includes bridge, road and tunnel items that need to be assigned to domestic enterprises to implement similar to recent expressway projects.

Component 2 includes: locomotives, signaling systems, etc. assigned to domestic enterprises in joint venture with foreign enterprises.

Source: https://www.baogiaothong.vn/deo-ca-de-xuat-giai-phap-go-kho-cho-loat-du-an-ppp-giao-thong-192241009183614714.htm