The plan of Vietnam Expressway Corporation - VEC to borrow government bond capital to expand the Ho Chi Minh City - Long Thanh Expressway will be difficult to ensure the completion progress as set by the Government leaders.
Clarifying VEC's plan to borrow government bonds to expand Ho Chi Minh City - Long Thanh Expressway
The plan of Vietnam Expressway Corporation - VEC to borrow government bond capital to expand the Ho Chi Minh City - Long Thanh Expressway will be difficult to ensure the completion progress as set by the Government leaders.
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| A section of the Ho Chi Minh City - Long Thanh - Dau Giay expressway is currently operated by VEC. |
The Ministry of Planning and Investment has just issued Official Letter No. 803/BKHĐT - PTHTĐT to the State Capital Management Committee at Enterprises regarding the plan for VEC to re-borrow from government bond capital to invest in expanding the Ho Chi Minh City - Long Thanh section of the Ho Chi Minh City - Long Thanh - Dau Giay Expressway Project.
Through studying the proposed plan for VEC to borrow from government bonds to have capital to implement the Project, the Ministry of Planning and Investment found that this plan has a number of issues that need to be carefully studied and evaluated.
Specifically, on the legal basis, the Ministry of Planning and Investment believes that the issuance of Government bonds for businesses to re-lend to invest in the Project must be reported to the National Assembly (the Law on Public Debt Management does not regulate the re-borrowing of issued Government bonds, only regulates the method of re-lending ODA loans, foreign preferential loans and does not issue Government bonds on the international capital market, foreign commercial loans for re-lending.
Meanwhile, reporting to the National Assembly and carrying out related procedures will take a long time, making it difficult to meet the required progress. In Notice No. 31/TB – VPCP, Prime Minister Pham Minh Chinh requested that the expansion of the Ho Chi Minh City – Long Thanh Expressway be basically completed by the end of 2025.
In addition to not clearly defining the decision-making authority and interest rates, if VEC invests by borrowing government bond capital, it will result in higher user fees than public investment.
“The State Capital Management Committee at Enterprises is requested to carefully consider and issue a document confirming the feasibility of implementing this plan, ensuring the completion progress is synchronized with the Long Thanh International Airport Project. In case it cannot be implemented, the Committee is requested to coordinate with the Ministry of Transport to issue a written report and confirm to the Prime Minister that it is impossible to complete the plan on schedule,” the Ministry of Planning and Investment stated.
In addition, in the case of VEC re-borrowing government bonds, the Ministry of Planning and Investment shall clarify the conditions for submission to competent authorities for approval, including proposing and recommending competent authorities to consider and decide to amend and supplement the contents related to re-borrowing government bonds; explaining the financial capacity of the re-borrower; borrowing plan, use of loan capital, revenue, costs, investment efficiency and debt repayment ability of the re-borrower; collateral of the re-borrower; plan for management and handling of mortgaged assets; risk level, solutions to prevent and minimize risks in case of debt repayment.
The Ministry of Planning and Investment noted that submitting to the National Assembly for consideration and resolution on issues under the authority of the National Assembly must comply with the provisions of the Law on Promulgation of Legal Documents 2015 (amended and supplemented in 2020).
According to the leader of the Ministry of Planning and Investment, in Notice No. 12/TB-VPCP dated January 13, 2025 on the conclusion at the meeting to deploy the Long Thanh International Airport Construction Investment Project, Deputy Prime Minister Tran Hong Ha directed the project to expand the Ho Chi Minh City - Long Thanh Expressway.
Accordingly, the Minister of Transport will study, select and report to the Prime Minister on the implementation according to 1 of 3 options: VEC will borrow from bond issuance sources; the Ministry of Transport will take the lead in implementing using central budget capital (source exceeding central budget revenue in 2024); SCIC and VEC will jointly invest.
“Currently, the PPP Law, the Public Investment Law, and the Road Law have allowed the allocation of public investment capital to agencies, including state-owned enterprises, with the Prime Minister's decision-making authority. To ensure consistency in the direction of the Government leaders, the Committee is requested to coordinate with the Ministry of Transport to report to the Prime Minister on the Project investment options, including proposing the most feasible option under current conditions to ensure the overall progress of projects connecting to Long Thanh International Airport,” said the leader of the Ministry of Planning and Investment.
Previously, the State Capital Management Committee at Enterprises sent a dispatch asking for opinions from ministries and branches on a plan to borrow VND15,030 billion in government bonds to invest in expanding the Ho Chi Minh City - Long Thanh expressway.
According to the proposal, VEC needs to borrow about VND15,030 billion, equivalent to 100% of the total investment excluding interest during the construction period with a term of 15 years to invest in expanding the Ho Chi Minh City - Long Thanh expressway in 2025.
It is known that the Ho Chi Minh City - Long Thanh Expressway expansion project from Ho Chi Minh City Ring Road 2 to Bien Hoa - Vung Tau Expressway intersection is 21 km long, of which the section from Ring Road 2 - Ring Road 3 is expanded to 8 lanes according to the plan; the section from Ring Road 3 to Bien Hoa - Vung Tau Expressway intersection is expanded to 10 lanes.
The total estimated investment is about 15,720 billion VND, including interest during the construction period, in which VEC mobilizes all capital to implement and organize exploitation, collect fees to repay capital according to the Investment Law. The principal amount borrowed from government bonds is paid once on the maturity date; interest is paid annually.
Source: https://baodautu.vn/lam-ro-phuong-an-vec-vay-von-trai-phieu-chinh-phu-mo-rong-cao-toc-tphcm---long-thanh-d244544.html
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