French big-shot enters Vietnamese expressway business

Vietnam Expressway Corporation, the country's largest expressway developer, has inked an historical deal with the French firm the world's biggest construction group in terms of revenue and operator of 6,000 kilometres of expressway in 12 countries worldwide. The deal was part of the documents signed during French President Francois Hollande's visit to Vietnam during September 5-7.

The VEC-Vinci cooperation agreement will focus on construction, financing, and operation of new expressway projects involving Vinci Group's concessions and contracting businesses.

Also under the deal, the two sides will jointly develop concession schemes for expressways currently operated by VEC. In addition, they will exchange experience in the management and operation of expressways, while considering technology transfer opportunities.

The firms will develop VEC and Vinci Concessions’ cooperation schemes on new expressways in Vietnam, and submit them to the authorised agencies for approval.

Specifically, VEC and Vinci will consider the possibility of transferring the right to operate the Cau Gie-Ninh Binh and the Ho Chi Minh City-Long Thanh-Dau Giay expressways to the French partner, while studying cooperation schemes for new expressway projects prioritised by 2020 by the Ministry of Transport (MoT).

In fact, concessions over expressways, especially those developed by VEC, have attracted avid interest from many domestic, including Bitexco and Sovico, as well as international investors from the US and Japan. However, none have made further steps just yet.

Earlier in October 2014, an international consortium led by Indian infrastructure company IL&FS became the first foreign investor to ink such a deal, after it successfully signed an agreement with Vietnam Infrastructure Development and Finance Investment Company (Vidifi) to acquire the rights to collect tolls on the Hanoi-Haiphong expressway.

The operational Cau Gie-Ninh Binh and Ho Chi Minh City-Long Thanh-Dau Giay are two of the five expressways developed by VEC. Of the remaining three, the 245-km Noi Bai-Lao Cai is open to traffic, while the two others, namely the Danang-Quang Ngai and Ben Luc-Long Thanh routes will be completed in 2018 and 2019, respectively.

VEC is also preparing for some new projects, including the Bien Hoa-Vung Tau expressway to be implemented under a build-operate-transfer format, and the Hanoi-Lang Son expressway.