Developers push up project pace amid capital deficiency

The Japanese consortium building the VND11.85 trillion ($541 million) Tan Vu-Lach Huyen expressway – a major component of VND25 trillion ($1.14 billion) Lach Huyen international gateway port in the northern port city of Haiphong – is on track to hit construction speed and capital disbursement targets assigned to them by the Ministry of Transport (MoT) earlier in the year.

According to Project Management Unit 2 (PMU2), which represents the MoT in overseeing the project’s implementation, about VND6.51 trillion ($297.3 million) out of VND7.63 trillion ($348.4 million) – equal to 85 per cent of the contract value – had been realised by the end of last month.

In addition, PMU2 had disbursed VND1.28 trillion ($58.7 million) out of VND1.3 trillion ($59.3 million) of the official development assistance (ODA) capital volume the government and the MoT assigned them in 2016.

The consortium consists of Japanese contractor Sumitomo Mitsui and local contractors Truong Son Construction Corporation and Civil Engineering Construction Corporation 4 (Cienco 4). The Tan Vu-Lach Huyen expressway project entails 15.6 kilometres of road-building, including a 5.6km sea-crossing bridge.

The project’s managing director Bui Huy Kiem said that, once being allocated more capital, the target of disbursing more than VND3 trillion ($137 million) of counter-funding capital from the Vietnamese side before year’s end is within reach.

The project, which is on schedule to be completed in first-quarter 2017, could provide a big impetus for northern key economic zone development.

A string of other ODA-funded transport infrastructure projects under MoT management have also seen accelerated progress after a standstill.

Once listed among the 17 ODA-funded infrastructure projects facing capital disbursement problems in mid-June 2016, the construction and disbursement pace on the mammoth $1.4-billion Danang-Quang Ngai expressway project has seen marked improvements lately.

By the end of August 2016, the project had completed 55 per cent of construction volume, through disbursing more than VND10 trillion ($456 million) of total investment capital. Construction started in May 2013.

The state-owned Vietnam Expressway Corporation (VEC) has been spearheading the effort.

VEC has imposed sanctions on slow-paced contractors, such as reducing their work assignment, and advanced more than VND1.13 trillion ($51.8 million) raised from toll collection to ensure land acquisition progress, instead of just waiting for government counter-funding.

VEC is confident it can beat the set target of opening the Danang-Tam Ky section to traffic in early 2017, as earlier proposed.

Positive signs from Tan Vu-Lach Huyen, Danang-Quang Ngai, and other expressways have contributed to softening the tension over counter-funding capital allocation.

MoT’s recent figures show that by the end of last month, more than VND36.35 trillion ($1.65 billion) of total investment capital earmarked to state-funded construction projects under its management was disbursed, reaching 47.3 per cent of the projection.