BIDV loan hits super highway

According to Ministry of Transport (MoT) calculations, 986 kilometres of National Highway 1 from Hanoi to Can Tho needs investment of VND89.362 trillion ($4.29 billion) for its upgrade and expansion. Of that amount,  the sum VND34.509 trillion ($1.65 billion) is to be mobilised in the form of build-operate-transfer (BOT) projects, with the remaining from state investment.

BIDV committed to arrange investment capital of VND30 trillion ($1.44 billion) for  the project’s implementation. Specifically, VND20 trillion ($960 million) will be used to finance BOT projects, VND5 trillion ($240 million) for bond issuances and VND5 trillion ($240 million) for provision.

BIDV will be in charge of evaluating the financial capability of investors. The equity capital must be at least 15 per cent of total investment; the borrowing cost will be the average deposit rate of 13 months plus a 3 per cent fee.

The maximum loan limit for each project is up to 85 per cent of the total investment in a BOT.

Tran Bac Ha, chairman of BIDV, said that the project would not only address traffic congestion and accidents, but also would create jobs.

MoT Minister Dinh La Thang said the project as important for socio-economic development and the project would be completed within four years.

BIDV last week also signed the financing contracts for BOT project to widen National Highway 1 with Cienco 5, Tasco Joint Stock Company and Truong Thinh Group.

At a government meeting on widening the National Highway 1 during 2012-2020, the prime minister assigned the MoT to complete the highway from Hanoi to Can Tho. Then the widened highway will consist of four lanes for motor vehicles, two lanes for motorcycles.

The National Highway 1 is the principal road connecting all the different regions in the country and four big cities including Hanoi, Danang, Ho Cho Minh City and Can Tho. It stretches from the Nghi Quan Border Gate in northern Vietnam to Nam Can township in Ca Mau province in the south.