ODA projects badly need reciprocal capital

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These seven projects include a road linking Noi Bai international airport to Nhat Tan port in Hanoi, the Danang-Quang Ngai expressway, the Ben Luc-Long Thanh expressway, Hanoi’s urban railway section from Cat Linh to Ha Dong, Mekong Delta transport infrastructure development (WB5), upgrading the northern sub-Mekong region transport network (national highway 217) and the Lo Te-Rach Soi highway (Delta region).

“This list is temporary as they will only see capital injections once developers show that they have finalised disbursement of 70 per cent of this year’s reciprocal capital before April 30 and have land acquisition plans approved by local governments,” said deputy head of the Ministry of Planning and Investment (MPI)’s Infrastructure Department Tran Duc Toan.

Of these above listed projects, two highways developed by the Vietnam Expressway Corporation (VEC) are reportedly in position 15 days ahead of the deadline.

“We will disburse nearly VND900 billion ($42.8 million) in reciprocal capital to the Danang-Quang Ngai and Ben Luc-Long Thanh expressway projects no later than mid-April,” said VEC general director Mai Tuan Anh.

According to sources, additional reciprocal capital demands for the two projects are somewhere in the area of VND2.3 trillion ($110 million) this year, with VND1.5 trillion ($71.4 million) needed just by the latter. Construction of the Ben Luc-Long Thanh expressway is slated to kick off in June.

According to the Government Office, the National Assembly has approved only VND8 trillion ($381 million) in reciprocal capital for the whole country for implementing ODA projects this year.

The transport sector is likely to be the biggest recipient with an expected 35 per cent of the approved figure.

In a document sent to the prime minister this March, the MoT proposed an additional allocation of VND8.2 trillion ($392 million) in reciprocal capital for ODA projects this year.

This figure did not include VND2.5 trillion ($121 million) to be sourced from government bonds, already ratified by the prime minister earlier this year.

“To achieve the full reciprocal capital demand for this year, ODA projects would have to disburse VND35 trillion ($1.66 billion) to complete 245km of highways, 12km of key urban roads, upgrade 167km of highway, complete the construction of the T2 terminal at Noi Bai airport, and more,” said the head of MoT’s Planning and Investment Department Nguyen Hoang.

Concerning ODA transport projects, the role of reciprocal capital is essential as it links with compensation and land acquisition, decisive factors in construction and general disbursement.

“Key transport projects have a huge demand for reciprocal capital this year and a slow disbursement pace could make their targets unrealisable,” said Toan from the MPI.