Amending the contract and adding about VND4,600 billion in state support capital is probably the most optimal solution to save the Bac Giang - Lang Son Expressway BOT Project from the risk of financial failure.
Harmonious benefits, shared risks
Exactly one month after receiving the request to complete the Project on solutions to handle difficulties and obstacles in some BOT traffic projects, the People's Committee of Lang Son province sent Report No. 402/BC-UBND to the Ministry of Transport on the implementation status and difficulties of the Bac Giang - Lang Son Expressway BOT Project. This is one of the BOT projects with the most "difficult" fate, both in terms of the implementation process (changing investors 3 times) and the process of collecting tolls to recover capital.
In Report No. 402/BC-UBND, Mr. Luong Ngoc Quynh, Vice Chairman of Lang Son Provincial People's Committee, said that the contents of the 24-page detailed report were the result of a meeting between the competent state agency and investors, project enterprises and credit sponsors (VietinBank) held in early August 2024.
The most prominent highlight in the above report is that the People's Committee of Lang Son province proposed to apply the solution of amending the contract and supplementing the central budget to support to remove difficulties and obstacles for the Project.
Specifically, the People's Committee of Lang Son province proposed that the Ministry of Transport consider reporting to the competent authority to support the central budget capital for the Project with an amount of about 4,600 billion VND as requested by the project enterprise, to offset the cash flow deficit during the toll collection period to ensure the financial plan (at that time, the Project's payback period is about 28 years and 7 months).
Lang Son Provincial People's Committee also requested the Ministry of Transport to report to the Government, the Prime Minister and central ministries and branches to issue mechanisms and policies to implement debt restructuring and maintain the debt group for the Project.
Previously, at the end of March 2024, in an effort to "rescue" the Project, the People's Committee of Lang Son province issued Document No. 23/TTr-UBND requesting the head of the Government to consider and agree to the policy of supporting from the central budget about 5,600 billion VND (not exceeding 50% of the audited and finalized value of the Project) to offset the cash flow deficit during the period of collecting tolls to recover capital, ensuring the financial plan and ensuring stable operation and exploitation of the project.
It is known that in order to reduce 1,000 billion VND of State support, at the meeting with the presence of "three parties": Lang Son Provincial Construction Investment Project Management Board (representing the competent state agency); investors, project enterprises and VietinBank (sponsor), the parties agreed to follow the Prime Minister's guiding principle when handling difficulties and problems at the Project, which is "harmonized benefits, shared risks".
Find the optimal solution
In addition to the solution of amending the contract and supplementing the central budget to support the Bac Giang - Lang Son Expressway BOT Project, the People's Committee of Lang Son province and investors and capital sponsors also considered two other options to resolve difficulties and obstacles: continuing to implement the contract and terminating the contract.
Regarding the contract implementation plan, the People's Committee of Lang Son province said that this is the plan that the People's Committee of Lang Son province has applied for nearly the past 5 years. If we continue to implement according to this plan, there is no need to supplement the state budget to support the Project, but there are a series of limitations that are very difficult to handle.
According to the People's Committee of Lang Son province, based on the actual traffic volume on the route and the expected growth rate for the following years, the results of the financial plan calculations of the investor and the project enterprise show that the payback period of the Project is about 44 years and 11 months, while the initial payback period is 18 years and 3 months.
This not only causes difficulties for investors and project enterprises, but also for credit providing banks in the process of loan processing and debt restructuring of the Project.
Besides, because the Project does not have the participation of state budget capital and there is no revenue sharing mechanism, the solution of only extending the toll collection period according to the contract provisions, without support and revenue sharing from the State, will not really solve the difficulties and problems of the Project.
Regarding the solution to terminate the contract, the People's Committee of Lang Son province said that the competent state agency of the Project needs to arrange about 11,267 billion VND to pay the costs that the investor and project enterprise have implemented, which will immediately resolve the difficulties and problems of the Project. This will put a relatively large pressure on the state budget, investors will also suffer losses when investing without profit and the credit providing bank will not be able to collect the unpaid interest from the stage of putting the project into operation until now, leading to loss of capital at the state-owned enterprise.
Thus, among the three proposed options, only the solution of amending the contract and supplementing central budget support can resolve the difficulties and obstacles of the Project; at the same time, ensure the Project continues to be implemented.
Source: https://baodautu.vn/truan-chuyen-du-an-bot-cao-toc-bac-giang---lang-son-d222855.html
Comment (0)