Hanoi (VNA) – The Nha Trang – Cam Lam highway has become the North – South expressway’s first section to be signed under the public private partnership (PPP) model under a contract inked on May 6 between the Ministry of Transport and Son Hai Group Company Limited

The 50-kilometre highway, running from Dien Tho commune, Dien Khanh district to Cam Thinh Tay commune, Cam Ranh city, is designed to have four lanes, and an average speed of 80 kilometres per hour.

The project is invested at a total cost of some 5.52 trillion VND (240 million USD), over 2.55 trillion VND of which will be mobilised by Son Hai Group, and 2.96 trillion VND funded by the State.

It is expected to be put into operation in 2023, with a payback period of 16 years and four months.

According to Le Kim Thanh, Director of the Ministry of Transport’s Public Private Partnership Department, the Nha Trang – Cam Lam highway is the first project awarded under the PPP model after the law on PPP model took effect on January 1, 2021. 

The PPP model will address shortcomings of the previous BOT projects since it keeps various options for users while the toll fares are calculated from the beginning to reduce risks for both investors and banks, Thanh stressed.

“The successful negotiation and contract signing play a significant role in promoting the socio-economic development, ensuring security and defence while realising the state’s vision by encouraging the participation of private firms in the transport infrastructure development process in the context of state budget constrains”, Thanh said.

Highlighting Nha Trang – Cam Lam a key project in the nation, which was approved by the National Assembly, Chairman of Son Hai Group Company Limited Nguyen Viet Hai affirmed the enterprise’ responsibility for implementing the project, and committed to joining hands with competent agencies and ministries to ensure the project’s quality and schedule.

First section of North-South expressway signed under PPP model hinh anh 1Investors and relevant parties pledge to complete the Nha Trang – Cam Lam project in line with the set schedule. (Photo: VietnamPlus).

At the signing ceremony, Deputy Minister of Transport Le Dinh Tho said 98 percent of site clearance for the project has been completed, creating condition for the investor to ensure the construction progress.

Along with the state funding under the PPP law, Tho put down the success of the project to the support from banks and other credit providers.

“The Ministry of Transport has proposed the Government to direct commercial banks to outline preferential credit package for investors. If banks give a helping hand, the project will surely a great success”, he underlined.

Tho suggested the investors and other firms to study the issuance of corporate bonds to mobilise more capital for transport infrastructure development.

To date, Vietnam has over 1,100 kilometres of highway, and the figure is expected to reach 5,000 kilometres by 2030.

The North-South Expressway covers 2,109km, extending from the northern mountainous province of Lang Son to the southernmost province of Ca Mau. Once completed, it is expected to become a backbone connecting the entire country. A number of sections covering 601km are already under construction.

Earlier, the Ministry of Transport (MoT) said it was striving to complete the North-South Expressway by the end of 2022.

Initially, a total of eight sections out of 11 sections of the expressway were meant to be invested in the public-private partnership (PPP) model. The MoT called on foreign and domestic investors to submit documents of interest in the project. However, last September, the Government decided that only domestic companies are entitled to construct the North-South Expressway.

After ruling out foreign contractors, the ministry shortlisted 32 of the 93 bids received by the North-South Expressway management board.

The ministry called for shifting the investment model from PPP to public investment model for three component projects - the Mai Son–Highway 45 Expressway, Highway 45–Nghi Son Expressway and Phan Thiet–Dau Giay section - as they are on the urgent list and needed to be brought into operation soon./.