Bidding for North-South Expressway scheduled in August

By Nguyen Huong    June 6, 2019 | 01:36 pm GMT+7
Bidding for North-South Expressway scheduled in August
Da Nang-Quang Ngai Expressway is the first expressway in central Vietnam. Photo by VnExpress.

Bidding for eight PPP components of the North-South Expressway will be held in August, Minister of Transport Nguyen Van The says.

"We then can report to the National Assembly about the bids in September," he told lawmakers at a house session on Wednesday.

The said 34 firms - 24 Vietnamese and 10 foreign, six Chinese, two Japanese, and one French and one South Korean - have collected bid documents.

The Ministry of Transport said last week that work on the eight public-private partnership (PPP) projects of the eastern section of the North-South Expressway could begin next April after the government awards them by first shortlisting five bidders and then narrowing them down to one for each project.

The ministry expects 70 percent of the land acquisition to be completed by then.

At the National Assembly, delegate Nguyen Ngoc Phuong of Quang Binh Province raised concern about Vietnamese firms’ inability to enter the bidding due to their lack of finances and domestic banks’ reluctance to lend. 

The suggested that domestic firms could form a consortium among themselves or join hands with foreign companies.

The National Assembly has determined that for the North-South Expressway PPP projects at least 20 percent of total investment must come from the private partners' equity.

Thus, a component of the expressway costing VND20 trillion ($855 million) will require the private partner to bring in $171 million in equity, which is beyond most Vietnamese companies’ wherewithal.

The said to ensure quality and transparency his ministry hired two foreign companies to compile the bid documents.

Of the 11 components of the eastern section of the North-South Expressway, three will be publicly funded while the remaining eight to be put up for tenders. They are expected to cost VND118 trillion ($5.06 billion), with VND55 trillion ($2.36 billion) coming from the government. 

The 11 components will make up 654 kilometers of the 2,000-kilometer expressway running from Nam Dinh Province near Hanoi to Vinh Long Province, southwest of Ho Chi Minh City. The expressway is scheduled to be completed in 2025.

Turning then to the North-South High-speed Railway project, The said his ministry has already submitted a proposal to the government and hopes to get lawmakers’ support for it.

Deputy Prime Minister Trinh Dinh Dung in April was quoted as saying in a statement released by the Government Office that this project is of large scale and would cost a lot and so should be carefully studied to make sure it will achieve general consensus.

South Korean conglomerate Hyundai Group last week expressed interest in both the expressway and high-speed railway projects at a meeting with Ministry of Transport officials. Its vice president, Chung Jin-hae, said for PPP investments, government guarantees like minimum revenue guarantees are important.

Government guarantees were among the 10 points the Ministry of Planning and Investment listed in a document it recently circulated among relevant agencies to solicit opinions for its PPP bill.

Its proposals on guarantees related to minimum returns and foreign exchange risks, if approved, might help remove some bottlenecks and attract foreign investors to major PPP transport infrastructure projects.

 
 
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