With a total length of 56 kilometers, the first highway project to be built in the north was approved an investment of VND5.42 trillion, funded from debentures under government’s guarantee. However, the cost of the project was later adjusted to VND8.97 trillion due to price changes.
According to a report by Vietnam Expressway Services Joint Stock Company (VEC), the project had 75 percent completed and the company was in dire need to issue debentures to ensure the capital at that time. However, the Ministry of Finance asked Prime Minister Nguyen Tan Dung to stop guaranteeing for VEC in issuing debentures as its debt-to-capital ratio was too high.
VEC said that the company had been guaranteed to issue debentures for two times, funded VND1.4 trillion. After that, as the deposit rates raised, the project had to use the capital from the national budget. Although VEC used nearly VND1 trillion from other sources to pay to contractors, many contractors, including Cienco 4, and Cienco 5, have not received enough money for work that they had done. Meanwhile, the company is also expected to face difficulties to access the national budget until the end of June.
At the beginning of January, the Ministry of Transport proposed the Government to supplement chartered capital for VEC and continue to guarantee for the company to issue debentures to prevent the project from coming to a standstill.