Investors to be chosen for five PPP projects under North-South Expressway

Hanoi (VNA) – Investors engaging in the bidding of five public-private partnership (PPP) projects as part of the North-South Expressway will have to meet requirements in bidding documents, financial capacity and professional experience.

Those without a strong trademark and financial resources will be removed immediately due to regulations stated in the bidding invitation for the five PPP projects.

At the same time, for each project, the investors should calculate the bidding price carefully and miminise the State capital, as bidding is a “game” in which investors will enjoy profits or suffer losses.

Removing weak investors

After the Ministry of Transport issued the bidding invitations for the five PPP projects of the eastern section of the North-South Expressway, 14 out of 16 investors passing the qualification round came to buy the bidding documents.

Under the bidding-related law, investors had 60 days to prepare bids. The bidding is scheduled to open on September 20. The Project Management Board will form an expert team to evaluate the bids in line with regulations.

As scheduled, in December 2020, the Ministry of Transport will approve the results of the bidding and negotiations, completing and signing contracts with investors (if the bidding is successful). If everything takes place smoothly and the bidding is successful, the Transport Ministry will negotiate and sign the contracts with investors this December, so that the construction can start in 2021 and complete in 2023.

“Winning investors will have to meet conditions including eligible bids, financial capacity, experience, and technical points and lowest financial proposal, whereby a bidder who offers the lowest contributions of State capital to the project will be considered for selection,” said Bui Quang Thai, Deputy Head of the Department of Public-Private Partnership under the Ministry of Transport.

The bidding documents for the five PPP projects of the North-South Expressway stated that the investor will have six months to mobilise credit resources from the signing of the contract for the project, thus ensuring the strong investor with high financial capacity and prestige can persuade banks to lend them credit.

If the investor fails to mobilise capital resourcesin the time limit, the ministry will void the signed contract and confiscate the contract guarantee from the investor. The guaranteed money will be equivalent to 1-3 percent of the contract value in line with the Bidding Law,” stated Thai.

To ensure the shortest time and the highest quality of bidding, the Minister of Transport Nguyen Van The underlined the need to ensure the organisation of bidding is implemented in a subjective, transparent manner in line with legal regulations related to bidding, with top priority given to the quality of the projects.

It is necessary to choose the investors with the highest capacity in personnel, equipment and finance as well as experience, along with highly-qualified consultant and supervision, ensuring the progress, technical standards and quality of the projects, he stressed.

Sink or swim

Many investors engaging in the projects’ bidding raised questions about the sharing of risks of the projects, the roadmap of toll fee increase and the fee for inflation.

PPP projects of the North-South Expressway will follow the set roadmap of toll fee increase (Photo: VietnamPlus)

Le Kim Thanh, head of the PPP Department, said that PPP projects of the North-South Expressway will not be subjected to mechanisms of risk-sharing. However, from the stage of the feasibility study, the ministry calculated input data very carefully, so that any project that is completed earlier than others will be able to operate independently without depending on the project nearby.

Thanh added that, for the North-South Expressway, Resolution 52/2017 of the National Assembly and Resolution 20/2018 of the Government clarify the toll for each specific period. The financial plan of the projects is being implemented in line with that roadmap, he said.

The five component projects cover five sections along the North-South Expressway: National Highway No 45-Nghi Son (ThanhHoa), Nghi Son-DienChau (NgheAn), DienChau-BaiVot (Ha Tinh), NhaTrang-Cam Lam (KhanhHoa), and Cam Lam-VinhHao (BinhThuan).

The North-South Expressway project has a total length of 654km and is divided into 11 sub-projects, including six under public investment and five under PPP. Investment for the sub-projects totals 100.8 trillion VND (4.3 billion USD), of which 78.4 trillion VND is from the State budget./.