The $445 Million Flood Control Project: Drowning in Delays

The city’s entire anti-flooding project has completed over 90% of the work, but construction has been halted since November 15, 2020. Regarding this issue, at a press conference on Ho Chi Minh City’s socio-economic situation (held on July 4), Mr. Quach Ngoc Tuan, Deputy Director of the Department of Planning and Investment, provided information related to the project.

Mr. Tuan stated that the project to address flooding due to tides in Ho Chi Minh City, considering climate change factors (phase 1), is of great importance in controlling tidal flooding and proactively responding to climate change for an area of 570 km2, home to about 6.5 million people on the right bank of the Saigon River and in the city center.

Since its commencement, the project has completed approximately 90% of the work and is in the final stages of constructing the remaining works before putting them into use. However, the construction is facing challenges regarding capital sources for payment and has had to be temporarily halted.

The suspension of construction over the past years is due to the expiration of the re-lending disbursement period from September 2020, according to Decision No. 770/QD-NHNN dated April 27, 2020, of the State Bank of Vietnam. As a result, the State Bank stopped disbursing funds to the Bank for Investment and Development of Vietnam (BIDV) to continue lending to the investor for project implementation.

Based on the report from the Ho Chi Minh City People’s Committee, the Government issued Resolution No. 40/NQ-CP on April 1, 2021, allowing the city to continue implementing the project under a special mechanism approved by the Prime Minister (in Notification No. 285/TB-VPCP dated August 20, 2015) and procedures agreed upon by authorized agencies. This ensures socio-economic benefits and prevents wastefulness of invested resources.

On January 31, 2023, the City People’s Committee signed an appendix to the BT Contract and a Memorandum of Agreement with the investor to continue the project. However, new difficulties and obstacles have arisen regarding the BT contract payment mechanism and capital sources for construction completion.

Currently, the city has submitted a report to the Government task force, detailing the challenges and proposing solutions, including issuing a new resolution to address issues related to the project’s payment mechanism, mobilizing capital sources for construction completion, and adjusting the total investment in line with the conclusions of the State Audit Office. These measures aim to expedite the completion of the project.

Mr. Tuan affirmed, “If the Government task force resolves the difficulties and obstacles, the investor commits to completing the construction within 6 to 8 months from the date of disbursement.”