Nine component projects of the North-South Expressway will be invested with total investment of about 124.61 trillion VND in the 2021-2025 period (Photo: VietnamPlus) Hanoi (VNA) – The Ministry of Transport has submitted a proposal to the Government on the construction of nine component projects in the east of the North-South Expressway in the 2021-2025 period.
Additional 552km of expressway to be constructed
Under the proposal, the projects will be invested in the public-private partnership (PPP) form, with total investment of about 124.61 trillion VND (5.4 billion USD).
The North-South expressway consists of 12 component projects with a total length of about 729 km, comprising sections of Ha Tinh-Quang Tri (267km), Quang Ngai-Nha Trang (353km), and Can Tho – Ca Mau (109km), crossing 12 localities - Ha Tinh, Quang Binh, Quang Tri, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Can Tho, Hau Giang, Kien Giang, Bac Lieu and Ca Mau.
They have a total investment capital of 154.52 trillion VND. Of which, about 73.49 trillion VND comes from the state budget and about 81.03 trillion VND from other sources.
However, the Government said that due to limited state resources, if all the 12 projects are implemented simultaneously, funding for other national highway projects will be affected. Therefore, the Government proposes investing to complete 9 of the 12 component projects with a length of 552 km during 2021-2025, including: Hau Giang - Ca Mau, Can Tho - Hau Giang, Van Phong - Nha Trang, Chi Thanh - Van Phong, Quy Nhon - Chi Thanh, Hoai Nhon - Quy Nhon, Quang Ngai - Hoai Nhon, Van Ninh - Cam Lo.
The three remaining component projects - Vung Ang - Bung, Bung - Van Ninh and Van Ninh - Cam Lo - site clearance and resettlement will be carried out in the 2021-2025 period, and construction will be conducted in 2026 - 2030.
Under a middle-term public investment plan for the 2021-2025 period adopted by the National Assembly in Decision No. 29/2021/QH15 dated July 28, the State budget to be allocated for the east part of the North-South Expressway in the period is 47.16 trillion VND (2.07 billion USD).
The nine component projects will be invested in PPP form, with total capital of 124,619 billion VND, including 61.62 trillion VND (2.67 billion USD) from the state budget and 62.99 trillion VND (2.7 billion USD) of private capital.
The North-South Expressway phase 2 has an average toll collection period of about 24.8 years. The three component projects of Quang Ngai - Hoai Nhon, Can Tho - Hau Giang, and Hau Giang - Ca Mau will have a toll collection period of 29-32 years.
Shared revenue mechanism proposed
According to the Ministry of Transport, it is necessary to calculate the contribution of State capital to define the payback period.
Construction of Mai Son-National Highway 45 section of the North-South Expressway (Photo: VietnamPlus)
Compared to the previous three PPP projects of the North-South Expressway that were implemented in the 2017-2020 period, which had the payback period of 16-18 years and State capital contribution of about 54 percent of the total investment, the component projects in the 2021-2025 period have longer fee collection time (about 24.8 years in average) and lower contribution of the State capital.
However, the ministry proposed that a mechanism of sharing the rise and reduction in revenue in line with the PPP Law to be applied in the projects.
Meanwhile, the law also allows businesses involving in the projects to issue corporate bonds and mobilise capital from other legal resources for the implementation of the projects.
For projects that have fee collection duration of over 25 years, the Government has built a mechanism in which the Government will decide the amount and ratio of State capital in particular projects in accordance with their conditions before approving the feasible reports of the projects, ensuring that the total State capital does not exceed the level approved by the National Assembly.
In case the PPP model fails, the Government will propose the National Assembly Standing Committee to consider the switching of investment format.
The Ministry of Transport set a deadline of preparations for the projects in 2025, and those for component projects from Vung Ang (Ha Tinh) to Cam Lo (Quang Tri) in 2030./.
