Proposal to terminate BOT contract for Thanh Hoa coastal route worth 3,372 billion VND

The coastal road investment project Hoang Hoa - Sam Son section and Quang Xuong - Tinh Gia section is invested by Central Construction Group Joint Stock Company - Hoang Thanh Investment and Trading Joint Stock Company.

The coastal road investment project Hoang Hoa - Sam Son section and Quang Xuong - Tinh Gia section is invested by Central Construction Group Joint Stock Company - Hoang Thanh Investment and Trading Joint Stock Company.

Illustration photo.

Thanh Hoa Provincial People's Committee has just issued Document No. 301/TTr - UBND to the Prime Minister on the investment project to build the coastal road section Hoang Hoa - Sam Son and Quang Xuong - Tinh Gia (now Nghi Son town), Thanh Hoa province under the BOT form.

Accordingly, the People's Committee of Thanh Hoa province proposed that the head of the Government consider the decision to terminate the investment policy and terminate the contract ahead of schedule for the BOT project to invest in the construction of the coastal road section Hoang Hoa - Sam Son and the section Quang Xuong - Tinh Gia (now Nghi Son town), Thanh Hoa province.

Thanh Hoa Provincial People's Committee also proposed to allow investment in the coastal road section Hoang Hoa - Sam Son and Quang Xuong - Nghi Son according to the provisions of the Law on Public Investment; at the same time, arrange central budget capital with the amount of 1,103,468 billion VND (this is the amount that Thanh Hoa province has returned to the central budget).

“The remaining investment amount is about 2,196,532 billion VND, Thanh Hoa province will use the provincial budget to continue investing in completing the above route in the 2025-2026 period,” Document No. 301 stated.

It is known that the BOT project to invest in the construction of the coastal road section Hoang Hoa - Sam Son and the section Quang Xuong - Tinh Gia, with the People's Committee of Thanh Hoa province as the competent State agency, has the goal of investing in the construction of 2 new sections with a total length of 29.9 km.

Of which, section 1 (Hoang Hoa - Sam Son) is 12 km long; section 2 (Quang Xuong - Tinh Gia) is 17.9 km long with the scale of a level III plain road, designed speed of 80 km/h; roadbed width of 12 m. Particularly, the section from Nam Song Ma Avenue to National Highway 47 is 1.8 km long with a roadbed width of 48 m according to the approved urban planning.

The project has a total investment capital of 3,372,661 billion VND, of which the State's capital contribution (to support construction; compensation, site clearance and resettlement) is 2,358,661 billion VND (Central budget supports 1,400 billion VND (including 10% reserve); Thanh Hoa province budget: 958,661 billion VND). The investor's capital is 1,014 billion VND, of which the minimum equity capital is 20%, the loan capital and other legally mobilized capital is a maximum of 80%.

According to the plan, the construction period of the project is from 2021 to 2024 (the entire project must be completed before December 31, 2024); the toll collection and operation period is 21 years, 10 months and 9 days (starting from 2025 to 2046).

Based on the authorization of the People's Committee of Thanh Hoa province, the Traffic Construction Investment Project Management Board signed a contract with the investor (Joint Venture of Central Construction Group Joint Stock Company - Hoang Thanh Investment and Trading Joint Stock Company), the project enterprise (Thanh Hoa Coastal BOT Company Limited) in Contract No. 01/HD-BQLDA dated January 17, 2023, the contract is effective from February 16, 2023 (the time the Investor submits the contract guarantee).

According to the project contract, the investor must complete the design of construction drawings and estimates in July 2023; complete the selection of contractors for all construction packages of the 29.9 km long project in August 2023 and start construction of the entire road section from May 1, 2023; and complete construction of the project before December 31, 2024.

However, by the end of December 2024, the investor had only approved the implementation design after the basic design of 4.69 km/29.9 km; the remaining 25.21 km had not been approved by the investor (13 months behind the contract).

By November 7, 2023, the investor had just organized the selection of a contractor and implemented the construction of a 4.69 km/29.9 km long construction package (the contractor selection was 7 months behind the contract).

The construction value reached about 1.1 billion VND; from January 12, 2024 to now, the investor has not implemented the construction. The project cannot be completed within the time specified in the Contract (construction period ends on December 31, 2024).

Also according to the BOT contract, the total loan capital that the investor must mobilize to implement the project is 809.9 billion VND, the capital mobilization period is within 12 months from the date the contract is signed (before January 17, 2024); the loan contract must be valid and eligible for disbursement according to the requirements on capital level and disbursement progress of the Project.

However, on January 26, 2024, the investor provided Loan Contract No. 01/2024/HDTD/TTKHDNLMB2 dated January 16, 2024 signed between Thanh Hoa Coastal BOT Company Limited and TPBank on borrowing capital to invest in project construction (the term provided by the investor is the final term according to the project contract (after 1 year from the date of signing the contract), in which the loan contract has a value of VND 570 billion, VND 239.9 billion lower than the project's financial plan.

According to the People's Committee of Thanh Hoa province, the time for the investor/project enterprise to arrange finance has expired (more than 18 months) but the investor/project enterprise has not completed the project, continuing to implement the project under the BOT contract is contrary to Article 76 of the PPP Law.

In addition, the project investor/enterprise also sent Document No. 98/BOT-KHKT dated November 11, 2024 to the People's Committee of Thanh Hoa province and the Traffic Construction Investment Project Management Board, requesting to terminate the Project Contract.

“Therefore, in order to invest in completing the coastal road section Hoang Hoa - Sam Son and the section Quang Xuong - Nghi Son town, terminating the contract under the PPP form (BOT contract) and re-investing in the coastal road section Hoang Hoa - Sam Son and Quang Xuong - Nghi Son according to the provisions of the Law on Public Investment is necessary and appropriate,” the leader of Thanh Hoa Provincial People's Committee analyzed.

Source: https://baodautu.vn/de-xuat-cham-dut-hop-dong-bot-tuyen-duong-ven-bien-thanh-hoa-tri-gia-3372-ty-dong-d238826.html