Site clearance and resettlement are key factors to complete the project. (Photo VNA)

Hanoi (VNA) -
The Ministry of Transport will conduct the selection of investors for the North-South expressway via bidding for projects in the public-private partnership (PPP) form, according to Nguyen Danh Huy, director of the ministry’s Department of PPP.

After bidding and putting the project into operation, the investors will collect charges within the life cycle of the project and be responsible for its profits and losses. This is the difference between PPP and Build-Operate-Transfer (BOT) transport projects, Huy said.

Waiting for State capital 

Speaking with reporters from the Vietnam News Agency, Huy said based on the results of feasibility studies of the expressway’s sub-projects, the Ministry of Transport has proposed the Prime Minister consider the amount of State capital for three sub-projects (Mai Son – Highway 45, Highway 45 – Nghi Son, and Dau Giay – Phan Thiet sections).

The Government has collected opinions from relevant ministries and departments, and is taking into account the level of State capital for the sub-projects.

However, since the ministry has not been assigned with a medium-term public investment plan, it does not have sufficient grounds to determine the State capital and approve feasibility reports.

Therefore, the ministry has proposed the Prime Minister soon assign the expressway’s medium-term investment plan for 2016-2020.

Based on technical standards, the ministry will continue updating the specific level of the State capital for each sub-project, Huy said, adding that about a year later, the ministry will sell bidding documents for investors to see if their capital sources are feasible or not.

For the five remaining sub-projects (Nghi Son – Dien Chau, Dien Chau – Bai Vot, Nha Trang – Cam Lam, Cam Lam – Vinh Hao, and Vinh Hao – Phan Thiet sections), the ministry has completed a report appraising the outcomes of their feasibility studies and will submit them to the Prime Minister for consideration and determination of State capital, Huy said.

He added that the National Assembly has set basic progress to open traffic for the whole route in 2021. The Ministry of Transport plans to kick off the implementation of five PPP sub-projects at the end of March 2020, which will last for about two years. 

Meanwhile, the construction of Cao Bo – Mai Son and Cam Lo – La Son sections will be implemented within two years from April 2019, and My Thuan 2 Bridge and the linking road, from October 2019 and be completed by 2023.

Huy said site clearance and resettlement are key factors to complete the objectives. Therefore, the People’s Committees of cities and provinces where the expressway crosses must be responsible for land clearance to ensure the progress of the project.

PPP investment is dependent on the market for macroeconomic and monetary management policies, Huy said, adding that when the credit market changes, it will affect investors’ capital.

The Ministry of Transport will conduct the selection of investors for the North-South expressway via bidding for projects in the public-private partnership (PPP) form. (Photo VNA)

Let investors determine service charges

To keep incompetent investors from the North-South expressway project, the Ministry of Transport will select investors through competitive bidding for projects in the PPP form.

The ministry will make a feasibility study and financial calculation before selecting investors via bidding, according to Huy.

Since sub-projects in the North-South expressway project require big investment and high technical standards, the investors must have strong financial capacity and experience in implementing BOT transport projects, he said.

Government Decree 15/2015 stipulates capital owned by businesses must be from 10 to 15 percent. However, for the North-South expressway sub-projects, the Ministry of Transport has proposed the Government apply the highest level of 15 percent.

The Government has determined the service charge from the time the project is put into operation will be 1,500 VND per km for a passenger car unit (PCU). It will be adjusted every 2-3 years, each time increasing by 200-300 VND. The highest charge will be 3,400 VND per km per PCU in 2040. The average charge is 2,500 VND per km per PCU.

The determination of the service charge accords with the national economic strategy and people’s income growth, Huy said.

In some foreign countries, investors will decide the service charge after bidding. Some even use flexible charges during peak and off-peak hours, he added.

The official suggested allowing investors to determine the service charge of the expressway by themselves while the State controls the ceiling price. The charge should be adjusted flexibly like airfares, he recommended./.