Lang Son proposes new construction plan for $330 million Huu Nghi-Chi Lang Expressway

Lang Son proposed two options to mobilise investment for Huu Nghi-Chi Lang Expressway

According to the plan, the construction of Huu Nghi-Chi Lang Expressway would cost VND7.6 trillion ($330.43 million), with VND1.6 trillion ($69.57 million) of investors' equity, while capital from the province’s budget will be VND1 trillion ($43.48 million) and capital from the state budget VND3 trillion ($130.4 million). The remaining VND2 trillion ($86.96 million) will come from commercial loans. The construction would be implemented under the build-operate-transfer (BOT) model.

The time for investors to recoup investment capital and interest will be 19 years and 5 months.

To ensure the financial plan, the People’s Committee of Lang Son province requests the Ministry of Planning and Investment to adjust the central budget and the 2021-2025 medium-term investment plan to provide about VND3 trillion ($130.43 million) to support the Huu Nghi-Chi Lang Expressway project.

Earlier, at the end of November 2019, the provincial leaders proposed the prime minister two options for investment in the Huu Nghi-Chi Lang Expressway component project.

According to the first option, the project would include four lanes with the length of 43km. The total investment cost was estimated at VND8.79 trillion ($382.17 million), VND1.75 trillion ($76 million) would come from the investor, VND1 trillion ($43.48 million) from the province’s budget, VND2.16 trillion ($93.9 million) from the state budget, and VND3.4 trillion ($147.83 million) from commercial loans.

Under the second option, the construction would be divided into two sections, including section Km1 + 800-Km17 + 420 (intersection with NH.4B) with two lanes and 13.5m wide roadbed and the section of Km17 + 420-Km44 + 750 with four lanes. The total investment of VND5.94 trillion ($258.26 million) including VND1.6 trillion ($69.57 million) from the investor, VND1 trillion ($43.48 million) from the provincial budget, VND1.34 trillion ($58.26 million) from the central budget, and VND2 trillion ($87 million) of commercial loans.

However, the Ministry of Transport did not agree with these plans after spotting several disadvantages. According to the ministry's initial plan, the project should be built with four lanes and a total investment of VND8.74 trillion ($380 million), using commercial loans from ADB. However, with the risk of increasing public debt, the prime minister has agreed to add this route to the Bac Giang-Lang Son Expressway BOT project and assigned the People’s Committee of Lang Son province as the competent state agency.

However, the project implementation faced many difficulties when the donors refused to lend the initial investment scale due to concerns that they could not repay the capital.