No foreign investors to compete in North-South Expressway project’s bidding: Minister

Hanoi (VNA) – Minister of Transport Nguyen Van The said that the North-South Expressway project will be a fair competition among domestic businesses through bidding as no foreign investors will be involved in the process.

Pressure from investment resources

During a discussion on the adjustments of the investment policy of a project to construct a number of eastern sections of the North-South Expressway in the 2017-2020 period on June 9, Phan Thai Binh, a NA deputy from Quang Nam province, said that if the investment format of eight North-South Expressway sub-projects shifts from the public-private partnership (PPP) to public investment, credit will be a problem as currently, it is hard to mobilise short-term capital.

Meanwhile, a report from the MoT showed that public investment will help save 3 trillion VND and complete the dual goal of disbursement and speeding up the project’s progress.

However, Binh noted his concern about investment resources for the project.

He considered whether switching the investment format of the three North-South Expressway sub-projects to public investment would see the capital mobilised from Government bonds surpass the ceiling of public debt. If so, whether the collection of fees as a solution to make up the investment would impact BOT investors of the National Highway 1. 

He added that it would be hard to seek capital resources if the other five PPP sub-projects had to be shifted to public investment. He stressed the need to consider all possible situations for the most suitable solutions.

Pham Viet Cuong, another NA deputy from Quang Nam, suggested that the Government make an impact assessment on the revenue from fee collection as traffic flow will be divided into the expressway and the National Highway 1.

To Van Tam, a deputy from Kon Tum province, said that many voters worried whether foreign investors would engage in five PPP sub-projects within the North-South Expressway project. They showed their concern over where the capital will come from amidst a difficult period of economic growth, which is forecast to reach only 3.6-4.4 percent, leading to low public investment.

Phu Tho province’s representative Hoang Quang Ham said that the Government’s report has yet to include a full assessment of the impacts on public debts, debt ceiling, debt payment capacity, and the amount of debt over total income. He stressed the need for a careful calculation to balance the State budget and consideration of possibilities of borrowing more or arranging loans.

“Obtaining bank loans for transport projects is not feasible, so that the Government and the State Bank of Vietnam should seek solutions to the situation,” he said.

Deputy Hoang Van Cuong from Hanoi held that the State budget is now modest, thus the Government needs to prioritise PPP projects.

He proposed that the Government pour public capital into projects that have no investors, and for projects that can draw investors, it is necessary to evaluate investor capacity. It is crucial to make clear that whether an additional 23 trillion VND of public investment will impact the mid-term investment plan for 2021-2025.

Building a flexible expressway toll list

According to Minister The, the technical design and investment estimate of the eight North-South Expressway sub-projects have been approved, enabling the issuance of bidding documents. In terms of administrative procedure, a number of regulations related to PPP will be erased if three projects’ investment is switched to public investment.

The expressway is eligible for launching as the ground clearance reaches 74 percent The work is expected to be totally completed at the end of the year. Once receiving the NA’s approval, the ministry will open bidding for the mega project in September and kick off it in October or November.

He explained that the Phan Thiet-Vinh Hao section, which has large traffic flow that makes it easy to attract investors, has to switch to public investment as all three investors interested in the sub-project are not eligible.

The North-South Expressway project is expected to help promote socio-economic development (Photo: VietnamPlus)

For the Phan Thiet-Day section, which has a total investment of 13.65 trillion VND, and the Mai Son-National Highway 45 section with over 12.24 trillion VND, domestic investors showed concerns over credit for them as the investment is too large, about 9 trillion VND and 7.5 trillion VND, respectively.

Mentioning the need of 23.46 trillion VND for 11 North-South Expressway sub-projects, Minister The said that the amount only accounted for about 10 percent of the total 235 trillion VND in the total public investment allocated to the transport sector.

Regarding impacts to BOT projects of the National Highway 1, he said that when designing the national transport development planning, the ministry calculated that 60 percent of vehicles will choose the expressway and 40 percent use BOT roads on the National Highway 1. Therefore, impacts on the National Highway 1 will be minimal.

He pledged to ensure the quality of the North-South Expressway and seek the best solutions to arising difficulties./.