Vietnam to call on big groups to invest in transportation

The North-South expressway project will be a BOT model (Photo: Vietnam +)

Hanoi (VNA) - In 2019 the Ministry of Transport is set to deploy a number of key projects, namely North-South expressway eastern section and Long Thanh international airport. According to Minister of Transport Nguyen Van The, because it is difficult to mobilize capital, investment by the private sector in transport projects will be an important and feasible source of capital.

Waiting for a new way of bidding

The eastern segment of the North-South expressway for being carried out in the period of 2017-2020 has a total length of 657km with a total investment of over 105 trillion VND, including 50,943 billion VND in state capital and 54,103 billion VND contributed by investors. The project is divided into 11 components running through 13 provinces and cities.

According to the report of the Ministry of Transport, 11 projects components have been approved. In April 2019, land clearance is expected to be handed over to localities and this year 50% of capital for site clearance capital to be disbursed (nearly 15 trillion VND). Work will start on three states funded projects in 2019.

It is expected that by September 2019, the Ministry will complete the selection of investors for eight North-South expressway PPP projects to be ready for the 2020-2021 construction work.

The Minister said in the upcoming bidding process, the Ministry will impose work quality requirements, ensuring that the selection of contractors is conducted in a public and transparent manner.

“Dossiers submitted by bidders are their commitment to the Government and investors. The Ministry will carefully consider the quality of consulting and building contractors,” said the head of the transport sector.

Referring to the hugely invested North-South expressway project, with some components having investment reaching 20 trillion VND, The said under the Ministry of Transport instruction, such a large package must have 2 -3 consultants in a joint operation, with one major consultant being responsible for the entire project.

“The Ministry does not accept divided consulting packages. Unqualified consultants will find it hard to meet the requirement. With eight PPP bidding packages, in February, a maximum of three consulting contractors will be selected. All domestic and foreign contractors will be evaluated through the projects they have carried out to review the quality,” the Minister affirmed.

“The North-South expressway eastern section has eight PPP projects, which will be made available for international bidding. This will be a model to implement other projects. The ministry hopes to attract investment with a stable policy," said Minister The.

Mobilizing capital for super projects

The minister said that in the field of road traffic, there is no international bidding project. The North-South expressway eastern section will be the first project to call for international bidding and surely many investors will be interested in.

"Foreign investors want Vietnam to guarantee revenue. The government has discussed a lot of possibilities but has not yet come to a decision due to its budget. The Ministry is also required to report to the National Assembly for reserve budget. If possible, there will be many foreign investors to invest in our country," the minister said.

According to Minister The, the transport sector expects that Vietnam’s economy will reach its stable period when there will be less guarantee yet investors are still willing to invest in. However, it is easier for airports and ports, he said, citing the Ha Long boat service port which has just been put into operation but operated effectively.

In the context of difficulties in capital mobilization, it is important to call on the private sector to invest in transport projects. (Photo: Vietnam +)

"The Ministry of Transport wants to call for the private sector’s investment in transport infrastructure. It is feasible as many domestic investors are interested in. Long Thanh Airport has reported to the Government its plans, including calling for domestic enterprises’ capital and issuing bonds. There are many other solutions rather than rely entirely on the state budget and ODA. It is necessary to consider capital from the private sector to be an important source of investment,” he said./.