The Vietnam Government Office recently issued an urgent request for feedback from various ministries and agencies on a long-stalled US$565 million flood control project in Ho Chi Minh City, whose construction started in 2016 and was initially slated for completion in 2018.

The Government Office made this move after it received a report from the municipal administration late last month.

This report detailed a plan to remove obstacles hindering the project on flood control and climate change adaptation.

As per the request, seven ministries and three agencies were urged to submit written responses outlining their opinions on the report, as well as measures and legal frameworks needed to resolve issues mentioned therein prior to October 5.

These ministries and agencies included the Ministry of Justice, the Ministry of Public Security, the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Construction, the Ministry of Natural Resources and Environment, the Ministry of Agriculture and Rural Development, the Government Inspectorate, the State Bank of Vietnam, and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).

The flood control project is currently facing three main challenges, including the lack of funding, unclear authority and procedures for project changes, and legal issues surrounding payment under the build-transfer contract.

To address the issues, the southern city proposed revising payment terms in the contract and adjusting the project’s overall scope.

Specifically, the city suggested completing the procedures to extend the project timeline, which would provide a basis for signing an amendment to the build-transfer contract and creating a new payment plan.

By implementing these adjustments, the city hoped to secure the necessary funding to complete the project and reduce the costs incurred from loan interest while awaiting project modifications.

The flood control project in phase one includes six tidal gates and 7.8 kilometers of dykes along the Saigon River, with the aim of solving tidal flooding affecting an area of 570 square kilometers with about 6.5 million people along the riverbank and in the downtown area.

The project got off the ground in mid-2016 and was originally scheduled to reach completion in 2018, but it remains under construction.

Work on the project was suspended once in 2018 due to land clearance issues, local news site VnExpress reported.

According to Lao Dong (Labor) newspaper, about 90 percent of the work was completed, and some VND1.8 trillion ($72.6 million) is needed to finish the remaining 10 percent.

However, the investor Trung Nam Group experienced financial constraints, and the loan term was extended, so state-owned lender BIDV, which provides budgets for the project in the form of soft loans, then stopped funding the development. 

Consequently, the project was halted again in November 2020.

The investor said in a report sent to then-Deputy Prime Minister Tran Luu Quang in May this year that the extended suspension and delay of the project had driven the total investment up to over VND14 trillion ($565.3 million) from nearly VND10 trillion ($403.8 million).

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