Expert: How can we ensure progress and quality when building the North-South high-speed railway by inviting capital contributions and dividing it into segments?

- What do you think about the proposals of businesses participating in investing in the North-South high-speed railway project?

The participation of the private sector in a national key project is welcome, in accordance with the spirit of Resolution 68 of the Politburo . However, in addition to spirit and enthusiasm, the most important thing for an unprecedented project of the country is economic, financial and social feasibility to ensure its true meaning as a backbone, helping to spread to dozens of industries related to the super high-speed railway project.

- In the recent proposal, THACO invites other domestic corporations and enterprises to contribute capital. Is this a risk-sharing solution, sir?

With the super high-speed railway project, the joint efforts of the State, enterprises and people are necessary, there is no need to argue, the important thing is the practical and feasible plan to gather forces. However, this invitation plan is somewhat superficial because this enterprise does not have enough power and strength, does not have the prestige and potential, both hard and soft, to be able to stand up and gather the strength of Vietnamese enterprises to carry out a century-old project. On the contrary, I am afraid that this plan lacks a true Conductor, with prestige, ability and potential.

If the project company is in the name of the project but mainly invites other units to contribute capital, dividing it into parts, how can progress and quality be guaranteed? Who is responsible if some members withdraw or break the contract, even the agreement between the companies is not simple and the price to pay is the progress and quality of the super project.

Don’t forget that this is an extremely complex infrastructure project, with a high possibility of losses for the first decades, requiring perseverance and a very strong financial foundation, as well as the ability to coordinate engineering – technology – operations at the national level. How many domestic enterprises are willing to rush into a project that is known to be a loss, unless they determine to “lose first, profit later” to develop the accompanying industry?

- Regarding time, THACO also committed to completing the route within 7 years. Do you believe that, with THACO's current capacity?

I am not sure. However, if we look at the past, from the Dai Quang Minh project (a subsidiary of THACO), THACO Thai Binh, to the HAGL Agrico project, ... many projects have had their budgets overrun, progress delayed or their effectiveness is unclear. The reality of the commitment, although not complete, is largely determined by the depth of experience and past experience. Even if THACO completes the project after 7 years, compared to the 5-year completion commitment of other units, the economy has lost 2 years of development opportunities.

- Some people say that the 70-year term that THACO requested is more reasonable than the 99 years of other parties, sir?

I think this number is just symbolic, because when the term expires, businesses can still apply for an extension according to the law. What matters is operational efficiency, the level of financial risk and the ability to develop the accompanying industry.

"Self-arranging" tens of billions of dollars is not feasible

- THACO proposes to borrow 80% of the capital from domestic and foreign credit institutions, equivalent to more than 49 billion USD, the Government guarantees and supports all interest for 30 years and the collateral is the entire project? Is the above proposal reasonable, sir?

In essence, if the State guarantees loans and pays interest to enterprises, it is no different from the Government directly borrowing and paying interest. If there are any risks, the Government must still take responsibility. Not to mention that the interest rate of enterprises is always higher than the interest rate of the State, which will certainly increase the State's costs.

More importantly, the feasibility of raising capital in the market. This enterprise is unlikely to have enough capacity to borrow 49 billion USD even with the State guarantee.

- Regarding the possibility of mobilizing more than 12 billion USD in capital contributions that THACO said it would "arrange itself". Do you think this is feasible?

To be honest, that option is very difficult to implement. THACO said it would raise capital through issuing shares to increase capital for THACO and its member corporations. However, we need to ask directly: On what basis does THACO, with equity capital of only about 2 billion USD, claim that it can raise 6 times more capital, up to more than 12 billion USD from the domestic market?

We all know how resilient the Vietnamese market is. Looking at the largest capitalized companies in the market, no one has the ability to raise that much capital in such a short time, especially in the current financial market context.

Not to mention, issuing shares under the Enterprise Law and Securities Law also takes at least 6-12 months. If THACO is talking about the goal of starting the line in 2026, is there still enough time to complete the legal procedures?

- How do you think this plan will be viewed?

This option contains too many risks and uncertainties, from the risk that the business has not proven its actual management capacity, ability to gather and coordinate resources, to the risk of contract failure, slow progress, uneven quality, and even capital overrun.

- What do you think about the joint venture plan between VinSpeed and THACO?

Recently, I also asked Mr. Pham Nhat Vuong the same question. He said: “This is a big project, very difficult, progressing quickly and will certainly lose money. I want to devote all my efforts to contributing to the country a valuable project that promotes the economy, not for business interests and profits. VinSpeed alone is very difficult. If a few more businesses are added, the discussion alone will take a lot of time. When there are losses, no one will accept it and then they will sue each other.”

Different visions, business management methods, and project management will hinder the success of joint ventures, so Mr. Vuong also made it clear that if a joint venture is required, he will definitely not do it, even though he is willing to support it spiritually.

I think, if VinSpeed withdraws and THACO does not invite enough investors, where will this project go?

Thank you!

Thai Duong (VTC News)

Source: https://baocantho.com.vn/chuyen-gia-lam-duong-sat-cao-toc-bac-nam-ma-moi-gop-von-chia-khuc-sao-dam-bao-tien-do-chat-luong-a186914.html