HCMC – The National Assembly (NA), this morning, June 19, approved changing the funding model of three sections of the North-South Expressway project—Vinh Hao-Phan Thiet, Phan Thiet-Dau Giay and Mai Son-National Highway 45—from the public-private partnership (PPP) format to the State budget after 443 of 458 NA delegates voted for the switch.
It was also decided to inject an additional VND23 trillion of State funding into them.
Earlier, Vu Hong Thanh, chairman of the NA’s Economic Committee, told an NA session that some delegates had objected to changing the funding format for Phan Thiet-Dau Giay and Mai Son-National Highway 45 sections on the cross-country expressway as they could be executed under the PPP format. They were concerned that the switch would lead to an increase in public debt and an imbalance in the management of the mid-term investment plan.
However, the NA Standing Committee noted that no investor could pass the preliminary appraisal over the Vinh Hao-Phan Thiet section, and it should thus be backed by State funds.
As for Mai Son-National Highway 45 and Phan Thiet-Dau Giay, the committee said using State funds was an urgent step to cope with the increasing traffic, as the two expressway sections would link with the two economic-political hubs of Hanoi and HCMC.
Further, even if investors passed the preliminary appraisal for the two, the percentage of State funding remained modest, prompting the need to mobilize capital from other sources, especially bank loans, resulting in possible difficulties while selecting appropriate investors.
Thanh concluded that using State money would ensure the successful construction of the two sections.
Work on the three projects is scheduled to begin this year and they are expected to be put into operation in 2022. Upon completion, toll collection rights would be sold to recover State funds and minimize public debts, according to a Government report.
The five other sections of the North-South Expressway would be financed under the PPP model. If no qualified investor is found through bidding, the Government would report to the NA Standing Committee.