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HCMC – Trung Luong Expressway facing downgrading

The Vietnam Association of Road Systems Investors (VARSI) has just submitted a report to the Office of the Government and related authorities, warning about the risks of severe downgrading on Ho Chi Minh City (HCMC) – Trung Luong Expressway lately.

The traffic volume using HCMC – Trung Luong Expressway every day is quite large. (Photo: SGGP)

The traffic volume using HCMC – Trung Luong Expressway every day is quite large. (Photo: SGGP)

The 39.8-kilometer long expressway has 4 lanes for transporting and 2 lanes for emergency stops. It attracted a total investment capital of more than VND9,884 billion (approx. $425.9 million) and was constructed from 2004 to 2010. This is the first one in Vietnam to meet expressway standards.

In 2012, this expressway was allowed to collect toll to compensate for state budget refund. Yen Khanh Group Joint Stock Co. (Yen Khanh) won the bid at VND2,004 billion ($86.3 million) to carry out this task from January 1, 2014 to December 31, 2018, installing four toll plazas in Cho Dem (sited in Binh Chanh District of HCMC), Tan An (in Long An Province), Ben Luc (in Long An Province), and Than Cuu Nghia (in Tien Giang Province).

After this time, the Directorate for Roads of Vietnam asked the Road Administration Department IV to take care of this highway until the present.

Right now, the traffic volume is witnessing an unexpected growth, and several accidents have happened due to the lack of proper control. What is more, certain parts of this expressway have seen wear and tear because the weight of vehicles using it is so loosely managed. In particular, the 13 bridges of this highway can only stand transportation means under 30 tonnes, so this loose control could lead to dreadful accidents. 

To make it worse, congestions on this expressway has greatly increased traveling time and logistics fee, while reducing the exploitation speed. 

“In order to ensure traffic safety on HCMC – Trung Luong Expressway and prevent the infrastructure downgrading, VARSI suggested that the Ministry of Transport should request the Directorate for Roads of Vietnam to finish the HCMC – Trung Luong Expressway Toll Collection Project as soon as possible in order to better control vehicle types and weight, to provide more income for the state budget, and to ensure sufficient fee for the tasks of regular administration as well as  maintenance of this highway. This will help to effectively exploit HCMC – Trung Luong Expressway”, proposed Associate Prof. Dr. Tran Chung, President of VARSI.

One particularly grave problem arisen is the lateness of Yen Khanh in paying Cuu Long Corporation VND2,004 billion for the toll collection right on the expressway in five years from 2014 until the end of 2018. The total penalty and accrued interest which Yen Khanh must pay according to Cuu Long Corporation's calculation is VND264.7 billion ($11.4 million).

Cuu Long Corporation has asked Yen Khanh to pay the debt for many times, along with the direction of the Ministry of Transport. However, until now, that debt amount is still uncollected.

The reason is that in August 2018, Yen Khanh filed a lawsuit to the People’s Court in Binh Thanh District of HCMC against Cuu Long Corporation over contract conflicts. As a result, the Binh Thanh District People’s Court blocked Yen Khanh’s performance bond.

In September 2018, the Ministry of Transport prepared a written report to the Prime Minister, asking for further direction. Yen Khanh till that time owed such a huge sum of debt, yet it owned no particular asset to guarantee the ability to pay except for the performance bond, at VND100 billion ($4.3 million). This meant a very high risk of state budget loss.

Therefore, the Ministry of Transport proposed that the Prime Minister first ask the Supreme People’s Court to instruct the Binh Thanh District People’s Court to withdraw its decision on applying the temporary emergency method. The second proposal was for the Prime Minister to allow Cuu Long Corporation to continue using several methods to collect this performance bond.

Until now, Yen Khanh has given back the toll collection right, yet the debt is nowhere to be seen.

Before that, the Prime Minister approved in principal to use the toll collection right on the expresssway for supporting BOT investors of the proejct, which is supposed to finish in 2021 while the toll collection contract has expried before that time.

Therefore, Cuu Long Corporation recommended to continue selling the toll collection right on the expressway from 2019 – 2020 without feedback from the Ministry of Transport.

According to Deputy Minister of Transport Nguyen Ngoc Dong, at the moment, the HCMC – Trung Luong Expressway Project is still collecting toll and not able to repay the advance capital. Hence, the state will continue toll collection in the HCMC-Trung Luong Expressway to repay the state budget and invest more in the expressway network if there is no assistance to connect Trung Luong-My Thuan and My Thuan-Can Tho routes.

From January 1, 2019, the Directorate for Roads of Vietnam has directed the Road Administration Department IV to take care of this expressway. In the first 2 years collecting toll, the money submitted to the state budget was around VND600 billion ($25.85 million), along with the money received from the toll collection right auction of VND 2,004 billion ($86.3 million). These two amounts are still not enough to refund the state budget  with the total advance of VND9,884 billion ($425.8 million).

By QUOC HUNG – LUONG THIEN – Translated by Vien Hong

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