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Trung Luong – Can Tho expressway: Slow progress due to high interest rates

High interest rates are causing difficulties for investors in Trung Luong - Can Tho expressway project.

Representative of Trung Luong – Can Tho expressway project said that the increase in loan interest rate caused the construction progress to be inadequate.

Specifically, the investor of the Trung Luong – Can Tho Expressway said that it has paid enough owner’s capital of VND1.542 trillion and disbursed mainly for site clearance and project management. Credit capital of VND6,850 billion was also signed with banks (VietinBank, BIDV, Agribank and VPBank).

High interest rates are causing difficulties for investors in Trung Luong - Can Tho expressway project.
High interest rates are causing difficulties for investors in Trung Luong – Can Tho expressway project.

In addition, the project company has mobilized 445/958 billion worth of investment cooperation contract with CII Company.

Up to now, investors have appraised and approved the design dossiers, construction drawings and budgets of 21/21 bidding packages. Of these, 19 of 21 packages have been implemented and 20 of 21 packages have been completed.

In addition, the cumulative value reached so far reached about 610 billion, reaching 11.67%, slow about 14 – 15% compared with the plan.

Representatives of investors also said that the biggest obstacle is the interest rate on loans. Investors have signed a credit contract with a loan of VND6.850 trillion, applying the ceiling interest rate in accordance with Circular 75/2017 / TT-BTC dated 21/7/2017 of the Ministry of Finance.

However, the interest rate under Circular 07/2017 / TT-BTC is about 6.77% while the actual average interest rate of 03 commercial banks is about 10.83%. This makes the access to credit capital of investors become more difficult, leading to the construction behind schedule

According to the representative of the investor, the project is currently carrying out about 1.3 million m3 of sand, still need about 6.5 million m3 to fill the ground. In the case of speeding up construction, there may be a shortage of sand for the project.

Deputy Prime Minister Trinh Dinh Dung said at the recent meeting with the Ministry of Transport that the Prime Minister had instructed the Ministry of Finance to chair and coordinate with the Ministry of Justice and the Ministry of Transport to find out. To remove difficulties in terms of interest rates to suit reality, calculate accurately and fully, and submit them to the Government for settlement.

In addition, Deputy PM Trinh Dinh Dung asked local People’s Committees in the region to continue to support the removal of sand material supply for this project and the key projects in the transport sector in South West.

At the same time, the Deputy PM also asked the Tien Giang People’s Committee to coordinate with the project enterprises to accelerate site clearance, complete the handover of the whole site in October 2018, meeting the construction schedule of construction items.

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