In the recent past Geleximco has appealed to the prime minister to withdraw from the project and hand it over to the Ministry of Trade (MoT) or localities along the expressway’s route (Hoa Binh province and Hanoi).
Geleximco based its appeal on the basis that it felt it could not sufficiently recoup its investment after the highway’s construction was complete.
Part of the project agreement was that the Hoa Binh Provincial People’s Committee awarded land to Geleximco to build the Yen Quang and Trung Minh new urban areas and the 36-hole Trung Minh golf course.
A similar deal was struck with Hanoi which granted 600 hectares for the Lang-Hoa Lac new urban area.
The developer figured the total investment to be around $857 million, up $362 million against the initial proposal.
“Although this is a very important project, it is impossible for us to go through with it within the timeline and given the falling property market,” said Geleximco general director Vu Van Tien.
According to the a source from the MoT, thus far, the developer has only invested around $17 million into the project, three years after first breaking ground.
The MoT also asked that Hoa Binh Provincial People’s Committee assist Geleximco in recovering their initial investment.
To keep the project moving after Geleximco’s exit, the MoT is looking to Hoa Binh and Hanoi authorities to help in accessing capital and is considering different investment models, including the public private partnership model (PPP).
The MoT’s Project Management Unit 2 (PMU 2) was assigned by the MoT to promote the project.
“One possible investor is the Asian Development Bank, which is considering this and other projects for the upcoming October appraisal round,” said PMU 2 general director Nguyen Ngoc Long.
By Anh Minh