Firm wants to sell BOT project back to the state
  • | tienphong, | April 28, 2018 08:51 AM
 >>  Expensive road deteriorates months after being completed
The Civil Engineering Construction Corporation 4 has proposed selling the build-operate-transfer Thai Nguyen-Cho Moi Expressway back to the Ministry of Transport as it hasn’t been as profitable as they wanted.


Thai Nguyen-Cho Moi Expressway  

The project to build the expressway from Thai Nguyen Province to Cho Moi District, Bac Kan Province was carried out by the Civil Engineering Construction Corporation 4, Tuan Loc Construction Company and Truong Loc Corporation and Commercial Construction. After three months of operation, the two toll booths earned VND6.6bn (USD264,000), much less than expected.

According to Cienco 4, at this rate, they won't earn enough to repay their bank debts. Vehicles have been avoiding going on the new expressway and instead using National Highway 3. As a result, congestion has occurred on the section through Phu Luong District.

Cienco 4 suggested two solutions. The first audacious proposal was to let them also set up the toll booth on the National Highway 3. If the first solution is rejected, Cienco proposed selling the project back to the Ministry of Transport for VND2.77trn (USD110.80m).

In accordance with the contract, Cienco 4 built the Thai Nguyen-Cho Moi Expressway and upgraded a part of the National Highway 3. After the construction, they would have been able to set up toll booths on both routes. However, the Ministry of Transport and the authorities of Thai Nguyen Province failed to reach an agreement over the toll fees so Cienco 4 could only collect fees on Thai Nguyen-Cho Moi Expressway.

Cienco 4 had called for help to the government many times during the negotiation process as they had to pay VND16bn (USD640,000) in interest and operating costs every month.

The project to build Thai Nguyen- Cho Moi Expressway and upgrade 65kms of National Highway 3 cost VND2.7trn (?USD?). Last year, it was reported that the road had cracked just months after being opened for a test run. The Government Inspectorate pointed out severe corner-cutting. The investors were asked to quickly repair the road.

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