Full steam ahead for expressway work

At last week’s largest-ever conference to urge private funding across eight sections of the key national project under the public-private partnership (PPP) model, Deputy Minister of Transport Nguyen Nhat said, “The bidding will last until March 2020. We encourage domestic and foreign investors to join these sections, with committed favourable conditions for interested investors.”

The eastern cluster of the North-South expressway, costing VND118.7 trillion ($5.16 billion), covers 11 sections. These include three state-invested sections connecting Hanoi and Ho Chi Minh City via key economic zones, industrial parks, border gates, and seaports. The state is contributing around VND55 trillion ($2.39 billion) for the venture.

About 300 representatives from the National Assembly, agencies, cities, and provinces related to the venture attended the conference. Besides, domestic businesses and foreign investors from South Korea, Japan, China, Spain, the UK, France, and Singapore also took part, discussing issues such as exchange rates, site clearance, guarantee mechanisms, revenue guarantees, and technology solutions.

According to the Ministry of Transport, unlike other PPP projects in the sector, there are some advantages and supporting policies for financiers in the expressway scheme.

Nhat said that the country takes responsibility for project site clearance and commits to hand over cleared land to those who join the eight PPP sections. In regards to government guarantees, at present the country is yet to guarantee minimum revenues, which is proving to be a thorny issue.

A guarantee of minimum revenue was applied in South Korea in the past, but has since been put to a halt.

“We are working on the draft law on PPP, in which government guarantees are lined up for discussion,” said a representative from the Ministry of Planning and Investment (MPI).

The draft law on PPP will be available on the MPI’s website in the upcoming days, and will seek comments from the business community. Investors are being encouraged to apply new environmentally friendly technology solutions in construction cost reductions, in order to gain profit and increase operational efficiency.