What to expect from increasing charter capital to more than 38,000 billion VND for VEC?

Increasing charter capital to more than VND38,000 billion is expected to help VEC remove the bottleneck of mobilizing capital from credit institutions to build new or invest in expanding a series of key expressways in the coming time.

Unleash resources to meet urgent deadlines

In the report on the plan to invest in additional charter capital for the period 2024 - 2026 of the parent company - Vietnam Expressway Corporation (VEC), in the latest submission to the National Assembly on February 15, 2025, the Government said that since its establishment, VEC has increased its charter capital twice.

Cau Gie - Ninh Binh Expressway is invested by VEC.

The first time according to Decision No. 1666 dated June 17, 2010 of the Ministry of Transport on the establishment of the parent company - VEC with charter capital of more than 1,018 billion VND.

The second time according to Decision No. 396 dated August 8, 2023 of the State Capital Management Committee at enterprises with a charter capital of more than VND 1,115 billion (result of the merger of Cuu Long Transport Infrastructure Development and Project Management Investment Corporation into VEC in March 2021).

"The charter capital is low, while the total investment of VEC's expressway projects at present is about more than 108,800 billion VND, the loan capital is nearly 56,900 billion VND, VEC always faces difficulties when it cannot ensure the debt/equity ratio according to current law.

For a long time, VEC's financial capacity has been limited and it has encountered difficulties in mobilizing investment capital to build new expressway projects as well as continuing to upgrade and expand existing projects," the Government assessed.

According to the production, business and investment development plan until the end of 2025, the Development Strategy until 2030, vision to 2035 approved by the State Capital Management Committee at Enterprises, in the period of 2021 - 2025, VEC needs to mobilize about 14,890 billion VND to complete the remaining items of the Ben Luc - Long Thanh expressway project, Da Nang - Quang Ngai expressway and prepare to invest in expanding the project from Ho Chi Minh City to Long Thanh section.

In the period of 2026 - 2030, VEC needs to mobilize about 30,500 billion VND to complete the expressway projects: Ben Luc - Long Thanh, Da Nang - Quang Ngai, expand the Ho Chi Minh City - Long Thanh section and prepare to invest in expanding the Cau Gie - Ninh Binh project, Noi Bai - Lao Cai Yen Bai - Lao Cai section, expand the North - South expressway routes in the East...

The progress of implementing and completing projects as directed by competent authorities is very urgent.

Concluding the 11th Conference of the 11th Party Central Committee, the Prime Minister's direction determined to basically complete the Long Thanh International Airport project, phase 1, in 2025.

Connecting traffic routes such as the Ho Chi Minh City - Long Thanh expressway (expansion) must be basically completed by 2025, with the Ben Luc - Long Thanh expressway completed in September 2026.

Along with that is the request to start construction of the Yen Bai - Lao Cai expressway expansion in 2025, prepare investment procedures, and soon expand the Cau Gie - Ninh Binh expressway from 4 lanes to 6 lanes, synchronized with the Phap Van - Cau Gie and Cao Bo - Mai Son routes.

In order to mobilize capital to implement investment projects according to the above schedule, it is necessary to submit to the National Assembly for consideration and approval of the plan to supplement charter capital for VEC.

"After the charter capital is supplemented, VEC will be eligible to mobilize capital from credit institutions to invest in projects. The increase in charter capital also creates a legal basis for VEC to perform accounting and depreciation for current assets," the report stated.

Ho Chi Minh City - Long Thanh - Dau Giay Expressway, Ho Chi Minh City - Long Thanh section.

Capital increase does not generate budget expenditure and public debt

According to the proposal, the expected additional charter capital investment for VEC is VND 38,251 billion, built within 3 years (2024 - 2026) in accordance with current regulations.

Of which, 1,562 billion is determined from VEC's Development Investment Fund for 3 years from 2024 - 2026.

Regarding 36,689 billion VND identified from the State budget, disbursed for investment in the construction of 5 expressway projects invested by VEC (including more than 10,000 billion VND of counterpart capital from the State budget, more than 24,100 billion VND of ODA capital in projects implemented in the form of transferring 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) has been verified by competent authorities and VEC.

Some projects invested by VEC are still continuing to disburse funds, such as the Ben Luc - Long Thanh expressway, which is expected to be put into operation in 2026. After completing the project, VEC will continue to report to the competent authority to invest additional charter capital for the parent company - VEC.

It is expected that the additional charter capital investment in the next phase (from 2027) from the State budget will be about 4,000 billion VND.

To facilitate the increase of VEC's charter capital, the Government also proposed that the National Assembly consider and approve the use of the public investment capital that had been planned for the Ministry of Transport to invest in the project with an amount of VND 36,689 billion converted into State budget capital to supplement the charter capital for the parent company - VEC.

"The increase in charter capital for the parent company - VEC from public investment capital has assigned a plan to the Ministry of Transport to invest in the project and has disbursed investment in the construction of 5 expressway projects invested by VEC without causing additional state budget expenditures and public debt," the content of the submission clearly stated.

As planned, tomorrow afternoon (February 17), the National Assembly will listen to the Submission and report on the audit of the plan to invest in additional charter capital for the 2024-2026 period of the parent company - VEC and discuss this content.

Previously, at the meeting on February 14, the Finance and Budget Committee (15th National Assembly) agreed on the policy of adding more than 38,000 billion VND to VEC's charter capital.

In Conclusion 1167/KL-UBTVQH15 dated February 12, 2025, the National Assembly Standing Committee agreed on the necessity of increasing the charter capital for the 2024-2026 period of the parent company - VEC and requested the Government to urgently request the policy of the competent authority in order to submit it to the National Assembly for discussion and decision at the 9th Extraordinary Session.

Source: https://www.baogiaothong.vn/ky-vong-gi-tu-viec-tang-von-dieu-le-len-hon-38000-ty-dong-cho-vec-192250216175150786.htm