The Vietnamese Road Administration has revealed several projects calling investors to join in the form of build - operate - transfer (BOT).
Except for the VND700 billion (US$41 million) project to build a section of the National Road 6 from Ba La to Xuan Mai, the VND2,300 billion (US$135 million) project to upgrade and expand the section of the National Road 1A from La Son to Lang Co and build Phu Gia and Phuoc Tuong tunnels, seven remaining road projects are regarded as “super projects” with investment capital of billions of US dollars each.
Mr. Truong Tan Vien, Director of the Planning and Investment Department under the Ministry of Transport said these seven “super projects” will be classified into two groups: inter-region expressways and belt-roads in Hanoi and Ho Chi Minh City, the two largest cities in Vietnam.
Three projects are involved in highway development, namely the 205-km Dau Giay - Lien Khuong expressway with a total estimated capital of VND37,500 billion (US$2.2 billion), the 79-km Nha Trang - Phan Thiet expressway with an aggregate investment capital of VND10,000 billion (US$600 million) and the 150-km Quang Ngai - Quy Nhon highway with a total estimated investment capital of VND28,000 billion (US$1.64 billion).
The Vietnam Road Administration has revealed four belt-road projects in Hanoi and Ho Chi Minh City, namely the 136-km six-lane expressway linking Hanoi, Bac Ninh, Hung Yen and Bac Giang with a total investment capital of VND51,874 billion (US$3.1 billion) - an expressway through five cities; an VND60,000 billion (US$3.53 billion) project to build an expressway to link Hanoi, Bac Ninh, Bac Giang, Hung Yen and Vinh Phuc; a project to construct the 87.4-km express belt-road 3 in Ho Chi Minh City; and a project to build the VND60 billion 152-km expres belt-road 4 linking Ho Chi Minh City with Dong Nai, Binh Duong and Long An.
Apart from the aforementioned nine projects, the 147-km Noi Bai - Ha Long highway costing VND20,557 billion has sought an investor, the China-based Gitex Co., Ltd. However, the investor asked for a construction aid of some US$400 million in the first 10 years and wanted to purchase Vietnamese minerals at preferential prices. This is against the Vietnam’s laws. Therefore, the Ministry of Transport may seek another investor.
"Although economic effectiveness is good, investors still shun these projects because of their large investment scales. Besides, a majority of projects have not completed an investment proposal; thus, investors lack information to consider the investment," said Mr. Mai Van Duc, Director of the Vietnam Road Administration
According to specialists, the Government's permit for Dau Giay - Phan Thiet and Ninh Binh - Thanh Hoa highway projects to use the capital from the World Bank's International Bank for Reconstruction and Development (IBRD) in accordance the public private partnership (PPP) is possibly a new way for mobilising capital for expressways.
Mr. Ngo Duc Thinh, Deputy Transport Minister, said: "With actual difficulties on capital recovery of expressway projects, the permit to investors to use capital borrowed from the World Bank's IBRD or other sources of preferential capital through PPP form is seen the most effective and feasible because IBRD capital has low interest rate, long lending term, less risks for investors and less capital needed from the State.”
Basically, the Ministry of Transport supports capital raising methods of investors. Mr. Mai Van Duc added: "Competent State organs may split belt-road projects to attract investors more easily."
Vietnamese
