The Ben Luc - Long Thanh highway project kicked off in October 2014. But the execution stopped because of changes in early 2019 in policies related to the capital arrangement of the project.
To date, the execution output value of the 11 major bid packages of the project has reached VND 11 trillion, or 80 percent of the projects adjusted construction and installation value.
Because of the long interruption, some contractors have withdrawn some equipment and workers from the site, and some contractors have terminated contracts.
According to the Vietnam Expressway Corporation (VEC), the project has been slow to restart because some bid packages in the western part, using JICA (Japan International Cooperation Agency) loans, were stopped for a long time and have not had capital allocated, while some contractors have become uncooperative or have terminated contracts.
Regarding J1 (Binh Khanh Bridge) and J3 (Phuoc Khanh Bridge), using JICA loans, the VEC and J3 contractor have terminated the contract. VEC is working with JICA on re-bidding to choose new contractors. Meanwhile, the J1 contractor has agreed to resume execution but implementation has been going slowly.
Regarding loans under ADB’s (Asian Development Bank) agreement for the western part (A1 and A4 packages), because the use of ADB loans was only valid until December 31, 2022, the Ministry of Transport (MOT) has submitted to the Prime Minister a plan for adjustment of the time for project implementation until September 30, 2025.
Concerning the reciprocal capital of the project, Dang Huu Vi, Acting Director of the Project Management Board in the South (VEC), said the Ministry of Finance (MOF) disagrees on the sources of reciprocal capital.
The ministry believes that it is unreasonable for VEC to use collected fees that are not due to pay for reciprocal capital.
The Ministry of Finance (MOF) said that the collected fees are managed by VEC, and they do not belong to VEC, but belong to the state. Therefore, it is necessary to clearly report to the Prime Minister about the nature of the amount of money that VEC is going to use for the project.
Because the capital arranged by VEC has not been approved, the bidding documents for A1, A4, and A8 packages cannot be issued as the requirements of the Bidding Law cannot be met.
The tardiness in selecting contractors will lead to the late completion of the bid packages using VEC-arranged capital.
In such conditions, VEC has proposed that MOT seek l government approval for arranging reciprocal capital for the project by allowing VEC to use the idle collected fees for the remaining reciprocal capital (VND758 billion).
At a recent meeting on reciprocal capital arrangement for Ben Luc-Long Thanh on February 16, Deputy Prime Minister Le Minh Khai asked VEC to urgently issue a document on committing to arrange reciprocal capital under current regulations and send it to the Ministry of Planning and Investment (MPI).
On that basis, MPI will then join forces with MOF to draft a government resolution on arranging reciprocal capital for the project and report to the Prime Minister.
In addition to issues related to capital arrangement, contractors of A1, A4, A6, J1 and J3 have lodged complaints about additional costs caused by changes in policies and legal procedures, among others.
These costs are being assessed by VEC, as well as contractors' supervision of consultants, provisions of contracts, and judgments of competent agencies (arbitrators, courts) about complaints.
According to VEC, the proofs and documents provided by contractors don’t have sufficient legal basis, therefore, there has not been a final result about complaint checking and involved parties keep different viewpoints about the costs.
While contractors claim for large amounts of compensation, VEC believes that the cost is just hundreds of billions of VND.
The of 57.8 km Ben Luc - Long Thanh Highway project was approved by the Prime Minister in October 2010, with a total investment capital of VND 31.32 trillion, including VND 13.6 trillion from ADB loans, VND12 trillion from JICA loans and VND5.689 trillion from reciprocal capital.