Difficulty in refunding costs to investors of Phan Dinh Phung Stadium BT Project

The cost refund for the investor of Phan Dinh Phung Stadium Project (HCMC) encountered many difficulties when the investor and HCMC People's Committee could not agree on the refund fee.

Investors request refund of 171 billion VND

The Phan Dinh Phung Sports Center Construction Project (Phan Dinh Phung Gymnasium Project) was approved for investment in the form of BT in 2010 and the project was approved in 2016. Before construction could begin, the BT investment form was "terminated" according to the Law on Investment under the form of Public-Private Partnership (PPP), and the project has been at a standstill since then.

After the Ho Chi Minh City People's Committee decided to stop implementing the Project under the BT form and switch to public investment at the end of April 2024, the Project has not yet resolved the problems with investors.

According to Document No. 6248/SKHĐT-PPP sent by the Department of Planning and Investment of Ho Chi Minh City to the Joint Venture of Compensation and Clearance Corporation and Phat Dat Real Estate Development Corporation (Project investor) in early June 2024, the City will refund the costs that the investor has spent to implement the Project.

To reimburse the investor, the Department of Culture and Sports of Ho Chi Minh City has twice sent a document reminding the investor to submit a report on the total cost of the Project implementation, and attach relevant documents and legal documents to the Department. By early July 2024, the consortium of investors had sent a document to the People's Committee of Ho Chi Minh City reporting the total cost related to the Project that the investor had spent to carry out the work, which was 171.6 billion VND.

The investors said that throughout the process of participating in the investment and implementing legal procedures up to now, which has been nearly 14 years, the consortium of investors has been very enthusiastic about pursuing the Project and has invested a lot of costs and resources. The prolonged progress comes from objective reasons such as changes, adjustments and new issuance of regulations on payment for BT projects of the PPP investment form.

According to information obtained by Dau Tu Newspaper, in 2019, the investor consortium reported to the Ho Chi Minh City People's Committee that the total cost that the investor spent to implement the Project was 33.9 billion VND. In early 2024, according to the consolidated financial report of the first quarter of 2024 of Phat Dat Real Estate Development Joint Stock Company (an investor in the consortium), the Project incurred more than 77.1 billion VND.

At the 2024 Annual General Meeting of Shareholders held in April 2024, answering shareholders about the fate of the Project, Mr. Nguyen Van Dat, Chairman of the Board of Directors of Phat Dat, said that the company really wants to continue this project. According to current law, the Company is still eligible to continue the Project. However, the company complies with the law and is waiting to work with the competent authorities of Ho Chi Minh City on the Project.

Multiple unpaid charges

Upon receiving the report on compensation costs listed by the investor, the Working Group, consisting of departments and branches of Ho Chi Minh City, reviewed the work that the investor had done. Based on the documents and papers provided by the investor consortium, the Working Group found that many of the costs listed by the investor consortium could not be paid.

According to the Working Group, the Project has not yet carried out any construction work in the field, so it can only pay for investment preparation costs according to legal regulations, such as costs for preparing pre-feasibility study reports and feasibility study reports. At the same time, other payments can be made to the investor consortium if there is a policy approval from the City People's Committee.

Before deciding to terminate the investment in the BT form of the Project, the Ho Chi Minh City Working Group met many times and considered many options. In particular, the Working Group determined that negotiating and refunding the costs that the investor had spent to implement the Project was difficult, because these costs were not included in the state budget expenditure.

Currently, the Department of Culture and Sports is coordinating with the Management Board of Investment Projects for Construction of Civil and Industrial Works of Ho Chi Minh City to develop a design plan and calculate investment costs. Under the direction of Chairman of the Ho Chi Minh City People's Committee Phan Van Mai, departments and branches are speeding up the implementation of procedures to start the Project before April 30, 2025.

Source: https://baodautu.vn/nan-giai-viec-hoan-tra-chi-phi-cho-nha-dau-tu-du-an-bt-nha-thi-dau-phan-dinh-phung-d224326.html