Geleximco wants to invest in Bac Giang-Lang Son expressway in the form of BOT, despite the failure of a plan to invest in transport sector four years ago.
Mr. Vu Van Tien, General Director of Geleximco has just signed a document requesting the Ministry of Transport and Transport to allow this unit and Geleximco partners to participate in BOT project Bac Giang – Lang Son with a minimum rate of about 70 %.
According to this document, Geleximco said that it reached an agreement with existing investors to be able to solve the capital difficulties in the project with a total investment of more than VND12,000 billion.
Specifically, Geleximco said that it has arranged with ABBank and the group of banks co-sponsored by ABBank as the investor in this case was approved, of which ABBank arranged VND2,000 billion; Agribank arranged VND 3,000 billion, TPBank arranged VND 800 billion.
ABBank is also the bank where Mr. Vu Van Tien and his family members hold a large amount of shares.
Also in this document, Geleximco is committed to resolving all outstanding issues related to the equity of the project provided that the interest rate of the BOT loan is adjusted.
The Bac Giang – Lang Son highway project aims to build a 64 km high speed highway with four lanes, enhancing 110 km of existing National Highway No. 1 with total investment of VND12,188.3 billion. Joint venture of UDIC Investment Joint Stock Company, Investment Joint Stock Company 468, My Da Construction Company, Construction Joint Stock Company No. 1, Phuong Thanh Investment Construction Joint Stock Company .
According to the plan, the project by the consortium led by UDIC Investment Joint Stock Company will have to be completed by 2018, however, due to not completing the mobilization of equity and arranging the funds commercial loans are being considered by the Ministry of Transport to terminate the contract.
It is noteworthy that Geleximco himself … failed with a plan to invest in the transport sector around four years ago. Specifically, in March 2013, this group has sent a letter to the Prime Minister, the Ministry of Transport, the People’s Committee of Hanoi and the People’s Committee of Hoa Binh province to be handed over the project to the first locality. private or the Ministry of Transport or allowed to transfer the form of investment project with ODA loans in the form of PPP, in which this unit is the first investor.
Geleximco’s argument is that land funds for projects in both Hoa Binh and Hanoi are not enough to return to investors when they complete the construction of the road.
Investors’ calculations show that the total investment of the project is about 33 km long, about VND 18,000 billion, of which VND 6,745 billion is needed in the section through Hoa Binh and VND 11,021 billion from Hanoi.
Meanwhile, Geleximco is arranged by Hoa Binh for 3 counterpart projects: Yen Quang urban area of 150 ha, Trung Minh urban area of 130 ha and 36-hole Trung Minh golf course. The counterpart project in Hanoi is expected to be Nam Lang-Hoa Lac urban area with an area of 600 hectares.
However, due to the large amount of investment, the recession of the economy and the frozen real estate market, Geleximco will be “very difficult to complete the project as scheduled.”
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