Key road tunnel to see light of day

Pham Dinh Thuan, assistant to general director of Deo Ca Investment Company (DCIC) - the developer of the project, said the Ministry of Transport (MoT) sent Document No.9508/BGTVT-DTCT to DCIC to permit DCIC to nail down the Deo Ca project on November 18, 2012.

According to its plan, the construction will take four years.

The Deo Ca-Vietnam road tunnel project will see a tunnel crossing Deo Ca on National Highway 1 which passes south-central Phu Yen and Khanh Hoa province covering 13.4km. The construction of the project includes 3.9km Deo Ca tunnel under the build-operate-transfer (BOT) form and a 9km access road, bridge and 500 metres Co Ma tunnel under the build-transfer (BT) form.

In early 2012, the MoT rubber-stamped Deo Ca tunnel project with enormous investment cost reaching VND15,603 billion or $750 million. Of this, building 3.9 km Deo Ca tunnel under BOT form will cost VND10,555 billion ($507 million) and of building an access road, bridge and Co Ma tunnel under BT form need VND4,509 billion ($216.7 million), and state budget reciprocal capital of VND539 billion ($193 million) for site clearance.

“To date, the credit agencies are willing to pour capital for the project,” said Thuan.

Specifically, France's Credit Agricole Bank and SG Bank, the honour lenders for BOT package worked with other banks to arrange a syndicated loan of $500 million for the BOT package.

Goldman Sachs arranged a $250 million syndicated loan for the Deo Ca tunnel project BT package. Vietinbank also signed an agreement with DCIC to supply capital for site clearance and resettlement which previously is planned to supply by the state.

The prime minister gave the nod to an unprecedented supportive scheme to the project via Document 476/TTg-KTN dated April 11, 2012, paving the way for related parties to wrap up complex BOT and BT contract negotiations.  

Accordingly, the project investors will get the right for exclusive advertising and trade in services and infrastructure alongside the route.

Besides, the government will underwrite for project enterprise to source a commercial loan package worth around $800 million for project implementation. Investors can take over Ban Thach and Ninh An toll stations in National Highway 1 to supplement their capital sources.