The report to the National Assembly says MOF has begun paying debts for the project, though the railway has not yet operating.

MOF said the project is implemented with loans worth $690.62 million provided by Chinese Eximbank under three agreements.

The Prime Minister approved a special finance mechanism, under which MOT authorizes the Management Board of Railways Projects to sign an agreement on re-borrowing foreign loans to implement items related to the exploitation and operation.

MOT takes the responsibility of arranging reciprocal capital to pay foreign debts (the re-borrowed loan) and other expense items during the construction period, until the project is completed and handed over to the Hanoi People’s Committee.

The Hanoi People’s Committee will acknowledge the debt when it takes over the railway from MOT and has the responsibility of paying the money advanced by MOT to the State budget.

As the loans used to implement the Cat Linh – Ha Dong railway project are Government loans, when the loans are due, MOF has to make debt repayment on schedule to the Chinese Government and Eximbank.

The loan provided to MOT to relend to implement items related to the operation of the project is also having problems in repayment, so MOF has had to advance money from the accumulation fund for debt repayment to pay the debt of the project.

Regarding the payment of the MOT’s re-borrowed loan, MOF said MOT has arranged reciprocal capital to pay interest under the agreement signed with the Vietnam Development Bank (VDB). Some problems have arisen during the arrangement of capital to pay principal of the re-borrowed loans, because since the day of signing the contract on relending, MOT has not been allocated capital to pay the principal.

Under the Law on Public Debt Management and legal documents that guide the implementation of the law, for the re-borrowed item, project owners have the responsibility of arranging capital to make repayment to MOF.

However, since the debt repayment obligation for the re-borrowed loan arose, MOT has paid VND398 billion ($17.3 million) in principal only. It still has to pay $9.83 million (VND227.322 billion) in principal, and $1.65 million (VND38.37 billion) in overdue principal and interests.

Since 2019, MOF has many times reported to the Prime Minister about the fact that MOT needs to cooperate with the Ministry of Planning and Investment (MPI) to arrange capital to pay debts. However, to date, MOT has not been allocated capital to pay principal. Therefore, MOF has to use $9.83 million (VND227.3 billion) from the accumulation fund for debt repayment to pay debts for the project. 

Luong Bang

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