Total investment of BOT project of road tunnel through Deo Ca reduced by 7,250 billion VND

The total investment of the BOT project of the Deo Ca tunnel (including Deo Ca, Co Ma tunnel, Cu Mong tunnel, Hai Van tunnel) after adjustment is 18,903.89 billion VND including loan interest during the construction period.

The BOT project of the Deo Ca tunnel is a model of a transport infrastructure project implemented under the PPP form.

The Minister of Transport has just signed Decision No. 397/QD – BGTVT approving the Feasibility Study Report to adjust the Deo Ca Road Tunnel Project (including Deo Ca and Co Ma Tunnel, Cu Mong Tunnel and Hai Van Tunnel) under the form of BOT contract.

Accordingly, there are 3 additional investment items in the Project during implementation, including the construction of Suoi Dua bridge (Km1370+402, National Highway 1); the construction of Cu Mong pass tunnel; the expansion of Hai Van road tunnel (including the operation of Hai Van tunnel through the pass).

The Ministry of Transport decided to adjust the total investment of the Project down to VND 18,903.89 billion, including compensation, support and resettlement costs: VND 593.44 billion; construction and equipment costs: VND 13,254.16 billion; consulting project management costs, other costs: VND 1,988.12 billion; operating costs of Hai Van tunnel through the pass in the 2016-2017 and 2018-2020 periods: VND 455.72 billion; loan interest during construction (provisional): VND 2,612.45 billion; contingency costs: VND 0 billion.

Compared with Decision No. 3107/QD-BGTVT dated October 5, 2016 of the Minister of Transport on approving the Feasibility Study Report of the BOT Road Tunnel Project through Deo Ca, the total investment after adjustment decreased by VND 7,250 billion, of which the most significant is the reduction of equipment and construction costs by VND 2,049.78 billion; interest during construction decreased by VND 1,209 billion; contingency costs decreased by VND 3,052 billion...

The total investment of the BOT project of the Deo Ca tunnel will be determined accurately when finalizing the project.

The above changes have led to changes in the capital structure for project implementation. Specifically, according to Decision No. 397, the BOT capital for project implementation is 14,127.27 billion VND.

The State capital supporting the Project is 4,776.62 billion VND, including 90 billion VND of State budget capital: used to support site clearance for the Deo Ca tunnel project; 3,506.62 billion VND of Government bond capital used to pay for the BT part of the Co Ma tunnel, access roads, site clearance and resettlement costs; 1,180 billion VND of the medium-term public investment budget for the period 2021 - 2025 used to support the construction of the Deo Ca tunnel project is 1,065.29 billion VND, supporting the organization of site clearance compensation and resettlement of the Project is 114.71 billion VND.

Other contents remain the same as previous decisions of the Minister of Transport.

The Ministry of Transport assigned Project Management Board 85 to carry out the following tasks in compliance with legal regulations; continue to review and complete procedures for adjusting financial plans, adjusting contracts, performing payment and settlement work and related contents according to regulations; be responsible for checking and reviewing capital sources for project implementation, developing capital plans, completing capital procedures for the project according to regulations; ensure the use of State capital to support the project for the right purposes, objects, legal regulations, National Assembly Resolutions and project investment efficiency.

Project Management Board 85 is also responsible for implementing management and strictly controlling construction investment costs; managing contracts, acceptance, capital settlement, project investment costs, ensuring full legal basis and compliance with legal regulations.

It is known that the BOT project of the Deo Ca tunnel was initially approved by the Minister of Transport in Decision No. 47/QDBGTVT dated January 6, 2012. During the implementation process, a number of items were added to the project according to regulations and the capital source for project implementation was adjusted.

By the end of December 2020, all items of the Deo Ca Tunnel BOT Project had been completed, of which the Deo Ca, Co Ma tunnels and access roads were completed in August 2017; the Cu Mong tunnel was completed in March 2019; and the Hai Van tunnel was completed in December 2020.

The project has been put into operation and has promoted investment efficiency, significantly reducing traffic safety risks on National Highway 1.

However, in the process of allocating State budget capital to support the project, the Ministry of Planning and Investment commented in Document No. 5373/BKHĐT-PTHTĐT dated July 10, 2023, reporting to the Prime Minister, stating that “During the implementation process, the Project has had many changes in scale, total investment, capital structure and investment form. All additional items were approved in separate decisions not included in the initial overall project. Up to now, there has been no decision approving the overall Project, as a basis for assigning annual capital plans in accordance with the provisions of Article 53 of the Law on Public Investment. The assignment of annual capital plans is under the authority of the Ministry of Transport”.

On September 20, 2023, Deputy Prime Minister Le Minh Khai commented in Notice No. 386/TB-VPCP of the Government Office, requesting the Ministry of Transport to be responsible for completing procedures, ensuring the use of state capital to support the Project in accordance with regulations and investment efficiency, avoiding corruption, waste, loss, and negativity.

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