Proper mechanism needed for PPP projects of North-South Expressway

Hanoi (VNA) - Five component projects implemented in the form of public-private partnership (PPP) of the North-South Expressway need a proper mechanism to attract investors, according to insiders.

In early October, the Ministry of Transport opened bidding for the five component projects, including National Road No. 45 - Nghi Son, Nghi Son - Dien Chau, Dien Chau - Bai Vot, Nha Trang - Cam Lam, and Cam Lam - Vinh Hao. However, the Nghi Son - Dien Chau project did not attract any bidders. The project from National Highway No 45 to Nghi Son attracted only one, but the bidding was cancelled because the bidder did not meet technical requirements, according to the Ministry of Transport.

The Ministry of Transport said that it was necessary to develop a mechanism which would harmonise the benefits of the Government, the investors and the users as well as solutions to solve difficulties in existing build-operate-transfer (BOT) projects to create favourable conditions and trust to attract investors and credit institutions in PPP projects.

The Nghi Son - Dien Chau component project needs to mobilise more than 15.5 trillion VND (672.1 million USD) while commercial banks are facing difficulties to provide credit for PPP projects, a representative from the ministry said.

He added that the ministry had a working session with the State Bank of Vietnam and commercial banks to discuss mechanisms to run the projects.
The banks said they will give top priority to considering and providing capital for the nation’s key projects.

The Ministry of Transport believed that addressing challenges while carrying out BOT projects together with implementing new mechanisms in the Investment Law will serve as premise to create trust and a favourable business climate for investors in the coming time.

Vehicles on the completed section (Photo: VietnamPlus)

The Ministry of Transport committed to completing the National Highway No. 45 - Nghi Son, Nghi Son - Dien Chau, and Nha Trang - Cam Lam sections and put them into operation by the end of 2022. Meanwhile, it expects to make the Dien Chau - Bai Vot  and Cam Lam - Vinh Hao become operational in early 2023.

Eleven sub-projects under the North-South Expressway project has a total length of 654km, 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.

Earlier, three component projects of the North-South Expressway whose investment model was shifted from public-private partnership (PPP) to public investment model attracted interest from investors as hundreds of contractors have bought bidding documents.

These component projects include Mai Son – National Highway No. 45, Vinh Hao - Phan Thiet and Phan Thiet – Dau Giay sections.

According to the Ministry of Transport, since the bidding invitations were issued from August 6 to September 4, the Mai Son - National Highway 45 component project, including five construction and installment packages, saw 60 units buying bidding documents with a total of 140 sets.

The Vinh Hao - Phan Thiet component project, comprising four construction and installment packages, had 140 bidding documents purchased by 61 contractors.

Meanwhile, 32 units bought 74 bidding documents of the Phan Thiet - Dau Giay component project which consists of four construction and installment packages.

Under the National Assembly’s Resolution No 117/2020/QH14 issued on June 19, 2020, the legislature decided on the public-private partnership (PPP) investment form for three component projects of the North - South Expressway: Mai Son – National Highway 45, Vinh Hao - Phan Thiet, and Phan Thiet - Dau Giay.

However, the Ministry of Transport called for shifting the investment model from PPP to public investment model for these component projects as they are on the urgent list and needed to be brought into operation soon./.