The Cao Lanh - An Huu Expressway project, which will link Dong Thap Province with Tien Giang Province in Vietnam’s Mekong Delta region, is facing a cost overrun of VND1.572 trillion (US$66.45 million).

The road project comprises two components and will likely carry a total estimated investment of VND5.886 trillion ($248.6 million) for phase one, as approved by the prime minister.

The first subproject, which includes some 16 kilometers of highway, will be located in Dong Thap, while the second phase, some 11.4 kilometers of highway, will run 3.8 kilometers through Dong Thap and 7.6 kilometers through Tien Giang.

The estimated cost for the first subproject in the prefeasibility study (PFS) and feasibility study (FS) remains almost unchanged at VND3.640 trillion ($154 million), equivalent to the figure approved by the prime minister.

The Dong Thap administration broke ground on the first subproject on June 25 this year.

Meanwhile, the second subproject, whose approved investment was VND2.246 trillion ($95 million), saw its estimated investment revised up to VND3.818 trillion ($161.4 million) in the FS, VND1.572 trillion ($66.45 million) higher than estimated in the PFS.

Specifically, costs earmarked for site clearance were adjusted up by VND857 billion ($36 million), costs for construction and purchasing equipment were upped by VND584 billion ($24.6 million), and provisions rose by VND113 billion ($4.7 million).

According to the Tien Giang administration, which was charged with managing the second subproject, the costs in the FS were calculated more precisely than in the PFS and were updated on a par with current market prices.

Given the cost overruns, the Tien Giang administration has to arrange its local budget and other lawful sources of capital to cover them in order to complete work on the second subproject, according to the prime minister’s requirement.

However, the Tien Giang administration said the province is facing financial woes and is thus unable to cover the cost overruns.

After working with the Tien Giang administration on the issue, the Ministry of Transport said it will collect feedback from other relevant agencies before seeking the prime minister’s nod to revise the project’s total investment.

The Cao Lanh - An Huu Expressway will start from an intersection linking with the My An - Cao Lanh Expressway in Dong Thap’s Cao Lanh District to another intersection connecting with the Trung Luong-My Thuan Expressway in Tien Giang Province’s Cai Be District.

Work on the entire route began in 2022 and will last until 2027.

During the first phase, the route will have four lanes with maximum speeds of 80 kilometers per hour.​

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