Vietnam Govt to advance 1tr dong for Cau Gie-Ninh Binh highway project

Failures in corporate bond issuances have delayed the pace of Cau Gie-Ninh Binh highway project for nearly past two years due to capital shortage.
By the middle of this week, the prime minister sent document assigning the Ministry of Finance to advance one trillion dong for Vietnam Expressway Development and Investment Corp (VEC) to carry out the project with an aim to put the 23-kilometre section of Cau Gie-Highway No 21 into operation on September 30, 2011.

Earlier, the Ministry of Transport of Vietnam also had allowed VEC to adjust the pace of the project whereby the expected completion on December 31, 2011 will be delayed to September 30, 2012.

Cau Gie-Ninh Binh Highway project is putting heavy pressures on VEC, VEC has invested over five trillion dong in this project, but the project is still working without utilities.

At the same time, of the total investment of 8.974 trillion dong, VEC has only one trillion dong of chartered capital. The remaining capital was raised from governmentguaranteed corporate bond source.

With the average yield of bonds after issuances since 2004 so far at up to 15 percent per annum (p.a.), if the project continues to be further prolonged, VEC may have to face the fact that the project has no payback ability.

(US$1 = 20,830.00 dong)

Tags: Cau Gie-Ninh Binh highway project

Posted by VBN on Sep 19 2011. Filed under Transportation. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry