A tidal-control sluice gate under HCM City's long-delayed flood-control project. The Government has directed the city and the investor to resolve outstanding issues and complete the project by 2026. — VNA/VNS Photo

HCM CITY — The Government has ordered HCM City’s long-delayed tidal flood-control project to be completed by 2026, warning that both city authorities and the investor will be held accountable for any further delays.

The directive was issued in a conclusion by Deputy Prime Minister Phạm Gia Túc following a review of the first phase of the project, which is designed to protect large parts of the southern metropolis from tidal flooding.

Deputy PM Túc said HCM City now has sufficient authority to resolve the remaining obstacles facing the project and instructed the city to work closely with the investor to settle outstanding issues in accordance with regulations.

The Ministry of Finance, the State Bank of Vietnam (SBV), the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and other relevant agencies were tasked with coordinating with the city to remove implementation bottlenecks and facilitate the project's completion.

Construction of the project began in 2016 under a build-transfer (BT) contract with Trung Nam Group as the investor. Initially valued at nearly VNĐ10 trillion (US$379 million), the project's total investment has increased to more than VNĐ14.4 trillion ($545 million).

The project includes six large tidal-control sluice gates and a system of embankments along the Sài Gòn River.

It is expected to help control flooding across an area of about 570sq.km inhabited by approximately 6.5 million people.

Despite more than 90 per cent of construction work having been completed, the project has remained unfinished for years due to legal and financial difficulties, particularly disagreements over payment mechanisms under the BT contract.

According to the Government's conclusion, BIDV, which acts as an intermediary for refinancing from the SBV, has proposed measures to support the investor in completing the project if HCM City allocates land for payment.

In a report submitted to the Prime Minister, the HCM City People's Committee said payment obligations under the BT contract remain unresolved.

The city has proposed using seven land plots specified in the contract to pay the investor, with any difference between the value of the project and the land assets to be covered by the state budget.

The investor, however, has proposed that the entire project value be settled through land allocation based on the principle of equivalent value, citing conclusions by the State Audit Office of Việt Nam.

The seven land plots proposed by the city are estimated to be worth about VNĐ4.98 trillion, or slightly more than one-third of the project's revised investment value. Meeting the investor's proposal would require the allocation of additional land assets.

The city has also raised the possibility of terminating the BT contract and converting the unfinished portion of the project into a public investment project if an agreement cannot be reached.

However, the Ministry of Finance has cautioned that such an option would involve complex legal procedures and could affect the goal of completing the project by 2026.

The Government concluded that both the chairman of the HCM City People's Committee and the investor would be responsible if the project fails to meet the 2026 completion deadline. — VNS