Mega highways face different paths

In late August 2012, the ministries Planning and Investment and Transport (MPI and MoT) convened a meeting discussing two investment plans on expanding trans-Vietnam 1,760 kilometre Hanoi-Can Tho route (National Highway 1) and 1,811 kilometre north-south highway network which are of foremost importance to Vietnam’s socio-economic development in the next decades.

These two routes contain many sections running parallel less than 10km in distance.

In the first-case scenario, apart from the Hanoi-Ha Tinh section now under construction National Highway 1’s Ha Tinh-Can Tho section, spanning over 1,050km with total investment of around VND92 trillion ($4.38 billion), will be divided into 18 build-operate-transfer (BOT) projects. Each project will involve building 70km road and a toll station. State capital will be around VND55 trillion ($2.6 billion) with estimated toll level of VND500/CPU (cost per unit)/km (3.5 fold more than basic level) and subject to be revised following consumer price index (CPI) situation which is estimated at 6 per cent per year. Time for capital recovery of each project will be from 25 to 30 years.

In respect to north-south highway network eastern part with construction cost reaching VND479 trillion ($22.8 billion), the MoT envisages completing building of 136km section by 2015, increasing to 793 km section by 2020 and the remaining 1,018km section will be completed after 2020.

Apart from 260km section involving Danang-Quang Ngai, La Son-Tuy Loan and Ben Luc-Long Thanh highways which have completed loan arrangements, the remaining sections will source capital under public-private partnership (PPP) model with 60 per cent state capital support.

In the second scenario, National Highway 1’s expansion plan will link closely to progress of north-south highway project in which the latter project investment plan remains the same as in the first-case scenario.

In respect to National Highway 1 investment, the section stretching from Ha Tinh to Can Tho will have road surface reinforced. Existing highway sections will remain unchanged (282km). Of an estimated VND80.5 trillion ($3.8 million) investment, VND43 trillion ($2.04 billion) will come from state budget with toll level set at VND500/CPU/km and will be revised matching CPI situation, while the remainder will be sourced from private sector.

MoT Minister Dinh La Thang assumed to create breakthroughs in social and economic development national highway 1 should be expanded before 2016.  

MPI Minister Bui Quang Vinh said the country could not evolve if current transport bottlenecks were not effectively addressed. Hence, relevant ministries MPI, MoT and Ministry of Finance much reach a common voice to create a suitable mechanism attracting diverse investment sources into highway development.