Techcombank, Vingroup struggle to fund $1.26 bln expressway project

The 140-kilometer Gia Nghia-Chon Thanh Expressway that will connect Vietnam's Central Highlands to the southeastern region is facing financial hiccups as Vingroup and Techcombank have only been able to raise VND16 trillion ($677 million) out of the pledged $850 million.

The public-private partnership (PPP) expressway, which will connect Gia Nghia town in the Central Highland province of Dak Nong to Chon Thanh town in the southeastern province of Binh Phuoc, is projected to cost VND29.89 trillion ($1.26 billion). Of this, the state budget can provide VND9.8 trillion ($414.6 million) while the rest, $850 million, falls to the two investors.

This is the first time the cash-rich partnership of Vingroup and Techcombank has proposed to invest in an expressway project.

At a meeting Tuesday, leaders of the Ministry of Transport affirmed the ministry supports the project, while the Government Office chairman Tran Van Son asked Binh Phuoc province to cooperate with the investors to re-calculate the investment and make suitable adjustments to the project's scale.

Son said his office would report on Prime Minister Binh Phuoc’s proposal for a special mechanism and allocation of VND5.8 trillion ($245.45 million) for the project from the central state budget. He also asked Binh Phuoc for early submission of a pre-feasibility study.

Vingroup, Vietnam's largest private company, and leading private lender Techcombank received the Ministry of Transport’s greenlight to conduct a pre-feasibility study for the project in June. As planned, the 140-kilometer expressway will features 38 kilometers cutting through Dak Nong and 102 kilometers through Binh Phuoc.

The project aims to reduce travel times between Dak Nong and Ho Chi Minh City through Binh Phuoc. It is also expected to spur socio-economic growth, attract investment, and boost local and regional tourism.

In July, Deputy Prime Minister Le Van Thanh asked the relevant sides to complete the project by 2025.

As initially planned, the expressway is a state-funded project with a length of 212 kilometers. Per Deputy Prime Minister Le Van Thanh's order in July, with consultation of Vingroup, the project became a PPP one with a length of 140 kilometers and Binh Phuoc province is in charge of the implementation.