Belt Road No.4 gets new lease of life with fresh projects

June 05, 2021 | 00:59
A billion-dollar interprovincial road initiated by Hanoi and its three neighbouring provinces, if approved, may create numerous opportunities for private investors, with the build-operate-transfer format expected to be used.
1546 p8 belt road no4 gets new lease of life with fresh projects
Perspective of 1 intersection of Ring Road 4- Capital Region

Le Thanh Quan, director general of the Ministry of Planning and Investment’s (MPI) Department of Infrastructure and Urban Development, told VIR that the Belt Road No.4 project is expected to be the highlight of attracting investment into transport infrastructure in the north, especially after the approval of the Law on Public-Private Partnership Investment and its guideline documents, which are considered a good measure in terms of mobilising investment.

“Although the Ministry of Transport (MoT) has yet to release official information on each component project, I believe that this will be good chance for local and foreign investors to contribute to the socioeconomic development of the country, especially cities and provinces such as Hanoi, Bac Ninh, Hung Yen, and Bac Giang,” Quan added.

After calculating the central and local budgets, along with the effectiveness and return on investment of components, the MPI in collaboration with other ministries will comment on the solutions of capital allocation and mobilisation to the government and call from investment from the private sector into the project.

“Amidst a lot of difficulties like the pandemic, calling for investment is challenging, but it is quite necessary for infrastructure development. The project will be tendered in accordance with the Law on Public Investment and create numerous opportunities for the private sector,” Quan said.

Nearly two weeks ago, the leaders of the MoT and people’s committees of Hanoi, Bac Ninh, Hung Yen, and Bac Giang agreed to develop the Belt Road No.4 and submitted the plan to the prime minister. The total investment for the project is estimated at VND135 trillion ($5.9 billion), in addition to the costs for land clearance at VND25 trillion ($1.1 billion).

The central budget is requested for land clearance in Hanoi, Hung Yen, Bac Ninh, and Bac Giang, while the local budget of localities is asked for the total amount of VND50 trillion ($2.2 billion) for building the road. The remainder will come from the private sector.

Hanoi is proposed to be the focal point to implement procedures for selecting potential investors with enough experience and financial capacity. The elevated highway project is meant to be fulfilled under the build-operate-transfer (BOT) model for the whole road.

“If the government approves the proposal, the project will be included in the capital plan for the 2021-2025 period,” said Duong Duc Tuan, Vice Chairman of Hanoi People’s Committee.

As the total investment amount is high, Hanoi proposed to develop the project within a public-private partnership (PPP) model under a BOT contract. One year ago, Hanoi was considering three documents proposed to develop the Belt Road No.4 in the PPP form. Of this, T&T Group asked to construct the part connecting Noi Bai, Lao Cai, the National Highway No.32, and Phap Van-Cau Gie Expressway with a length of 34km and the total investment of VND16.28 trillion ($708.7 million) in the form of a build-transfer contract.

The venture of Phuong Thanh Tranconsin and Nguyen Minh IDJ requested to build the part from Phap Van-Cau Gie Expressway to Hanoi-Haiphong Expressway with a length of 13.9km and total investment standing at VND9.8 trillion ($426 million) in the form of a BOT contract.

Hoanh Son Group also offered to develop the part connecting Hong Ha Bridge, Van Khe commune (in Me Linh district), and Hong Ha commune (in Dan Phuong district) with the total investment of VND9.88 trillion ($429.4 million).

The participation of the private sector in infrastructure projects such as the above seems unavoidable. In addition to the Belt Road No.4 in Hanoi, the Belt Road No.3 surrounding Ho Chi Minh City has been conceptualised and is welcoming foreign investors to join phase 1 connecting Tan Van in Ho Chi Minh City’s District 9 and Nhon Trach in the southern province of Dong Nai.

Previously, the Belt Road No.3 project in Hanoi was developed by Samwhan-CIENCO 4 for the Mai Dich-Trung Hoa section; Sumitomo Mitsui Construction for Trung Hoa-Thanh Xuan; and the joint venture from Thang Long Group, CIENCO 8, and CIENCO 4 for Thanh Xuan-Linh Dam Lake.

The Belt Road No.2 in the capital was developed by local investors like Trung Nam E&C-Trung Chinh venture and Vingroup.

According to the Capital Transport Planning Project and the decision on approving the road that the prime minister had already signed, the Belt Road No.4 will be located at the south section of the National Highway No.18, starting at Noi Bai-Lao Cai Expressway in Hanoi’s Soc Son district and ending at Noi Bai-Halong Expressway in Bac Ninh city’s Nam Son commune. The length of the entire road is estimated at 98km across three cities and provinces, and the width of the roadbed cross section is 120m with six lanes.

Ten years ago, the total investment of the project was estimated at VND66.5 trillion ($2.9 billion) in Decision No.1287/QD-TTg approving the detailed master plan on the Belt Road No.4 of Hanoi, for which the Ministry of Transport was appointed to be the investor to develop the project by 2020. Difficulties in mobilising capital has delayed the project thus far.

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