Bitexco seeks partner for landmark PPP project

Bitexco will launch a series of investor road shows for Vietnam’s first public-private partnership project together with the Vietnamese government and the World Bank from July 22, covering Mumbai, Seoul, Singapore and Hanoi.

“I’m delighted that the public-private partnership model has already attracted keen interest among investors from around the world. We want like-minded partners who are looking at longer-term strategic opportunities in transport and infrastructure development that will contribute to Vietnam’s growth,” said Vu Quang Hoi, chairman of Bitexco Group.

The Ministry of Transport  began to sell dossiers to potential domestic and foreign investors who are interested in the project from July 2.

The Dau Giay-Phan Thiet motorway is a critical link in the national north-south transport route. Spanning approximately 100 kilometres, the four-lane road will link the key southern cities of Ho Chi Minh City and Phan Thiet.

Victoria Kwakwa, World Bank country director for Vietnam said the Dau Giay-Phan Thiet route was crucial for a new stage of infrastructure development in Vietnam.

“The project will boost the economic performance of the southern region. Last but not least, this is the first public-private partnership project in which we are co-operating with the Vietnamese government and it’s very important for both parties,” she said.

Bitexco officially gained approval from the government as the prime investor in Dau Giay-Phan Thiet motorway project in 2010.

According to the investor, the project would cost in the region of $757 million, with Bitexco holding 60 per cent equity in the project. The rest will be contributed by the state and other private investors. The shareholders have a 30-year concession to operate the motorway via tolls, after which it will be handed to the Ministry of Transport. 

The Bitexco Group expected to borrow capital from the World Bank’s International Bank for Reconstruction and Development to invest in the project, but the World Bank is not allowed to offer loans to private companies.

However, Hoi believed this would not prove a set back.

“Every aspect of the project will meet international standards and the strictest criteria pertaining to technical design, environmental and social safeguards. As the lead investor, we will seek to balance the key performance indicators with a commercially viable development in order to achieve a win-win relationship with our stakeholders including the Vietnamese government, our shareholders, investors and the public,” said Hoi.

The Vietnamese government is expecting the success of Dau Giay-Phan Thiet motorway will lead to a wave of foreign investments in infrastructure sector through public-private partnerships

The Ministry of Planning and Investment recently proposed that the government arrange VND20 trillion, or approximately $1 billion at current exchange rates, to finance public-private partnership projects in the country. The fund will be used matched funding for private sector investment.