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North-South expressway section struggles to find investor
The Saigon Times
Tuesday,  Mar 24, 2020,16:39 (GMT+7)

North-South expressway section struggles to find investor

The Saigon Times

Cars travel on the Noi Bai-Lao Cai expressway. A section of the North-South Expressway project has found no competent investors – PHOTO: VNA

HCMC – One of eight public-private partnership (PPP) subprojects forming part of the North-South Expressway project has found no investor while three other component projects will shift from the PPP model to a public investment one.

All the consortiums of local investors who submitted tenders for the Vinh Hao-Phan Thiet expressway section failed to satisfy the selection criteria, especially in terms of capacity and experience, according to the Ministry of Transport.

The ministry has asked the State-run Project Management Board No.7 to conduct further research and make a proposal for rolling out the subproject in alignment with the National Assembly’s instructions.

The section, which is expected to be 101 kilometers long and span the south-central coastal province of Binh Thuan, requires an estimated VND11.6 trillion (US$489 million) in investment. It will initially have four lanes before being expanded to six lanes.

Once in place, it will link with Dau Giay-Phan Thiet and HCMC-Long Thanh-Dau Giay expressways, the long-awaited Long Thanh International Airport in Dong Nai Province and other southern localities.

As part of the cross-country project, three subprojects, comprising Mai Son-National Road 54, National Road 54-Nghi Son and Phan Thiet-Dau Giay, will see changes to their funding models from PPPs to public investment as they are priority assignments and need to be brought into operation soon.

The Ministry of Finance stated in a recent report to the Government that these shifts will create six subprojects for which investment and site clearance costs are expected to reach more than VND54.3 trillion (US$2.3 billion).

Due to the lack of mid-term public funding for these component projects, the Ministry of Finance suggested Prime Minister Nguyen Xuan Phuc assign the Ministry of Transport to produce specific adoption plans.

Initially, a total of eight out of 11 sections of the North-South Expressway were meant to be developed under the PPP model. The Ministry of Transport called on local and international investors to submit their applications.

However, the Government last September decided that only local investors could be in charge of the expressway, citing national security and defense concerns. Having ruled out foreign contractors, the ministry shortlisted 32 of the 93 bids.

A transport expert told the Vietnam News Agency that the move would help fast-track the execution of the subprojects due to the nature of public investment.

He remarked that if the PPP model were to be used for these projects, problems might arise and slow their progress.

For instance, if competitive tenders failed to select a competent contractor or if the projects were not attractive enough to investors, the Ministry of Transport would have to seek another investment model.

Le Duc Tho, deputy head of Civil Engineering Construction Corporation No. 4 (Cienco 4), said that the possibility of attracting investors for projects on the Mai Son-Highway 45 section and Highway 45-Nghi Son section was low.

He pointed out that these sections have a low density of traffic, and the period for taking back investment capital would be long.

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