Unfinished BT projects have eroded investor confidence, causing them to lose sleep and interest as snowballing financial troubles plunge them into hardship.
Many vehicles travel on the Bao Loc City bypass in the Central Highlands Province of Lam Dong. However, due to the bypass’s unfinished construction, there have been fatal accidents. Specifically, an accident occurred in March 2023 as a car lost control and fell onto Nasuri Bridge, killing two passengers.
With a substantial investment of VND749.9 billion, the construction of the Bao Loc bypass project in Lam Dong Province began in February 2017. This ambitious project encompasses a 15-kilometer road and 3 durable reinforced concrete bridges.
Director Nguyen Van Gia of the Lam Dong Department of Transport reported that the investor, BT20 - Cuu Long Company, has disbursed approximately VND191.7 billion although there remains a shortfall of VND14.2 billion. This amount is intended to compensate 545 households and 6 organizations; however, 28 households have yet to receive their compensation.
The project has achieved only 70 percent of its construction progress. Numerous cross-culvert locations and steep slopes remain without guardrails and warning posts. Additionally, the bridges lack railings and guardrails at their respective bridgeheads.
A significant deterioration of the project occurred in August 2023. The road surface was extensively damaged by cracking, and the roadbed experienced considerable subsidence. The lack of a designated management and exploitation unit for the unfinished construction allowed local residents to encroach on the project site and damage the infrastructure by excavating the slopes and drainage ditches.
The construction initiative for the southern bypass of Bao Loc City in Lam Dong Province, represents an additional component utilizing the remaining funds from the project aimed at restoring and renovating National Highway 20, which traverses Lam Dong and Dong Nai provinces. This initiative is being executed under the BT model, as sanctioned by the Ministry of Transport in Decision No. 465/QD-BGTVT in 2016. Since October 2020, construction has been halted following directives from the Ministry of Transport, pending a review and resolution of the project's funding by the relevant authorities.
To enhance the effectiveness of investments in road infrastructure, the Department of Transport of Lam Dong Province has recently recommended that the People's Committee of Lam Dong Province advise the Government to cease investments in the Bao Loc bypass under the BT contract framework. Instead, it proposes the establishment of a new project to address the remaining components, utilizing public investment capital, with the aim of expediting its implementation and subsequent use.
The project's woes extended beyond physical damage as the investor found themselves in a perilous financial situation. This bypass project is a subsidiary component of the larger BT project to restore and renovate National Highway 20, a significant infrastructure endeavor initiated in January 2014 by BT20 - Cuu Long Joint Stock Company.
The project, which use foreign loans and is guaranteed by the government, initially had its total investment costs determined in December 2016 at VND5,160 billion. However, the Ministry of Transport had recalculated the total payment value to be VND9,456 billion by March 2018.
Additional costs not included in the total investment, such as investor profits, loan interest, exchange rate differences, and other expenses, amounted to VND4,296 billion during the payment waiting period.
The contract mandated a post-completion cash payment from the competent state agency to the investor for the specified expenses. However, by September 2024, the state budget capital payment had exceeded the total project investment. This discrepancy, coupled with the inconsistent regulations governing the payment and settlement of BT projects, resulted in the treasury's refusal to reimburse expenses that were not within the scope of the project's total investment.
Chairman Do Ngoc Dung of the Board of Directors of BT20 - Cuu Long Joint Stock Company stated that over the course of more than a decade of project implementation, various challenges have arisen. The company has worked in collaboration with local ministries and departments to address these issues; however, a comprehensive resolution has yet to be achieved.
An important meeting between the Ministry of Transport and the Ministry of Finance took place in August 2024 to address the critical issue of delayed foreign debt payments caused by the complexities of Decree 99. These payment delays, impacting both this project and another foreign-funded endeavor, resulted in a substantial $800,000 late payment penalty in 2020-2021, which the Ministry of Finance was obliged to pay in advance.
In Hanoi, the investor has pledged to finalize the investment project for the construction of the 2.5 Ring Road, which entails a total investment of VND1,317 billion. The state will assign the execution of the related project in the Northern and Northwest Dai Kim - Dinh Cong Urban Area, located in Hoang Mai District.
Although the project commenced on March 19, 2014, the road spanning over 2 kilometers, remains unfinished as of October 2024. The primary cause of the delay is attributed to numerous challenges in site clearance, including land disputes and the intricate procedures involved in verifying land ownership due to multiple transfers among various owners.
Additionally, to adhere to planning requirements, the project necessitated design modifications, further extending the timeline for completion.
Hanoi City is also grappling with several other BT projects that are encountering obstacles. Notable projects, such as the Ring Road 3.5 from Phuc La - Van Phu to Phap Van - Cau Gie Expressway, Tran Hung Dao bridge over the Red River, Giang Bien bridge, and the connecting road in Gia Lam district, have also been halted for reassessment.
A significant number of BT projects, such as Yen So Wastewater Treatment Plant, West Lake Wastewater Treatment Station, and Le Duc Tho road across Nhue River, have reached completion but continue to face significant delays in the settlement process.
