Highway expansion project in dire need of capital
By Le Anh - The Saigon Times Daily
HCMC – A project to expand parts of National Highway 1A from Hanoi to Can Tho City is now in dire need of capital as all the money for the project from the State budget has been disbursed, prompting authorities to look elsewhere for funds.
Recently, the Ministry of Transport has met representatives of South Korea’s Economic Development Cooperation Fund (EDCF) to discuss capital mobilization for the project, but no detail on the outcome has been made public.
Some VND1.88 trillion set aside by the Government to expand a section of the highway linking Thanh Hoa to Ha Tinh advanced since 2010 has been fully disbursed and the investors have no more capital to continue the project, said Nguyen Hoang, an official of the ministry.
Hoang said the total investment for this section amounts to VND2.4 trillion. The Government planned to secure this sum by transferring the commercial right of the HCMC-Trung Luong Expressway but no progress has been made.
Thus, the Ministry of Transport has proposed the Government to pump an additional VND3 trillion into the project so as to complete it on schedule, according to Hoang.
In order to generate more capital for the highway expansion, the ministry had suggested the Government collect personal vehicle restriction fees. However, strong public objections to this scheme have stalled the plan.
The Ministry of Transport also wanted the Ministry of Finance to increase toll fees on National Highway 1A to as high as 75% of the toll fee on expressways with an average increase of 18% after every three years. The proposal is still under consideration.
As per calculations, only some VND20.5 trillion can be sourced from the State budget, government bond sales and transfers of toll fee collection rights for the transport sector. The remainder should come from other investment formats such as BOT, BT and PPP.
Meanwhile, parts of National Highway 1A from Hanoi to Can Tho City that need to be expanded will require investment capital of VND126.41 trillion.
Given huge demand for capital, the Ministry of Transport proposed the Government apply various ways to raise capital.