Huge infrastructure projects on investors’ radars

As of now, the $1.16 billion project building the Nha Trang-Phan Thiet expressway has attracted a great deal of attention from investors.

Japanese company Nippon Engineering Consultants (NE) is working with the Ministry of Transport’s authorised agencies to take part in the feasibility study (F/S) drawing for a main section of the expressway.

A source from NE revealed that they have also sent a document proposing the Japanese Ministry of Economy, Trade and Industry to finance the F/S drawing.

Project Management Unit 6 (PMU6) has recently proposed the Ministry of Transport to register this 235 km four-lane expressway on the list of projects using Japanese official development assistance (ODA) funding for implementation during 2016-2018.

Accordingly, component 2 of the project, a 90km section, will be implemented using about VND9.2 trillion ($423 million) from ODA funds.

Two remaining components—component 1, building a 53km section for VND6 trillion ($274 million), and component 3 building a 93km section for VND8.66 trillion ($395 million)—will be put underway via a build-operate-transfer (BOT) format.

PMU6 general director Pham Tuan Anh said that local investor consortiums, such as Yen Khanh-An Hien-Cuong Thinh Thi or Cienco 1-Duc Binh-Thai Son, also sent their own proposals to participate in the project.

Besides the Nha Trang-Phan Thiet expressway project, the MoT is instructing its member units to shortly complete investment proposals for a string of large-scale infrastructure projects, to call for investment under the public-private partnership (PPP) format.

The most eminent projects on the list include building the159km long, four-lane Quang Ngai-Quy Nhon expressway, valued at $1.43 billion. Other major constructions will involve build an approach road linking Quang Ngai city centre to Dung Quat II port, for $71 million, and removing and rebuilding Danang railway station, an investment valued at $380 million.

The MoT estimates that the total capital demand for transport infrastructure investment development during 2016-2020 will come to about VND1,039 trillion ($47.4 billion) for projects under its management. About 30 per cent of the sum will be earmarked to projects in the key economic zone of the central region.

The state budget could only meet about 11 per cent of this demand. As ODA sources are drying up, while public debt stays high, investment under the PPP format emerges as the main investment channel in the upcoming period.