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 an update on the progress of the project “Solving inundation due to high tides in Ho Chi Minh City, taking into account climate change factors (phase 1).”
The project officially commenced on June 26, 2016. As of now, approximately 90% of the work has been completed, and the remaining construction items are being finalized for commissioning.
However, Mr. Tuan mentioned that the construction work is facing challenges due to funding issues, leading to a temporary halt in the project. The reason for this is that the deadline for refinancing under Decision No. 770 of 2020 by the State Bank of Vietnam has passed since September 2020. As a result, the State Bank has stopped disbursing funds to BIDV to continue lending to the investor for project implementation.
Based on the report from the People’s Committee of Ho Chi Minh City, the Government issued Resolution No. 40 of 2021, allowing the City’s People’s Committee to continue implementing the project under a special mechanism agreed upon by the Prime Minister and approved by the competent authorities to avoid wasting invested resources.
On January 31, 2023, the Ho Chi Minh City People’s Committee signed an Appendix to the BT Contract and a Minutes of Agreement with the investor to continue the project. However, due to some new difficulties and obstacles (BT contract payment mechanism and capital source for construction completion) in implementing Resolution 40, the City has submitted a Report to the Government Task Force.
The City has also proposed 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 accordance with the conclusion of the State Audit Office… to expedite the completion of the project.
According to the Deputy Director of the Department of Planning and Investment, if the obstacles are removed by the Government Task Force, the investor commits to complete the construction within 6-8 months from the date of disbursement.
Ben Nghe Pumping Station. Source: VnEconomy.
This anti-flooding project is of great importance in controlling tidal flooding and proactively responding to climate change for an area of 570 km2, accommodating about 6.5 million people in the right bank of the Saigon River and the center of Ho Chi Minh City.
At the same time, the project aims to actively regulate and lower water levels in canals and channels to improve drainage capacity by pumping out water from urban drainage systems.
The investor is Trung Nam Company. Regarding the funding situation for the project, in early May, BIDV, the intermediary unit receiving capital and refinancing from the State Bank to finance Trung Nam Company, announced that the company’s loan of VND 7,095 billion had exceeded the due date for principal repayment of VND 6,008 billion and interest of VND 1,715 billion. BIDV had to arrange commercial capital to repay the refinancing loan of VND 4,091 billion to the State Bank.
On May 15, the loan became due for another principal repayment of VND 569.2 billion, and BIDV continued to mobilize commercial capital to repay the refinancing loan to the State Bank of VND 521.9 billion. The bank requested the enterprise to work with Ho Chi Minh City to restart the project and mobilize capital to repay the loan.
In mid-May, Trung Nam Company announced that it would start mobilizing personnel to resume construction of the Ben Nghe Pumping Station from June. The investor proposed that the City People’s Committee soon approve the sludge dumping site to carry out dredging and riverbed reinforcement and grant permits for the construction of onshore items.
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