Vietnam rules out foreign investors for 8 North-South Expressway sections

By Dat Nguyen    September 24, 2019 | 09:00 pm GMT+7
Vietnam rules out foreign investors for 8 North-South Expressway sections
A car runs on the Da Nang - Quang Ngai Expressway, the first expressway in central Vietnam, which will be linked with the North-South Expressway. Photo by VnExpress/Dac Thanh.

Vietnam has decided that only domestic companies will be entitled to construct a part of the North-South Expressway.

The Ministry of Transport said in a Tuesday release that of 60 foreign and domestic investors who submitted documents of interest, very few passed the qualification round.

For the eight sections of the expressway that will be invested in a public-private partnership (PPP) model, four did not have any investor that met needed qualifications, while the remaining four had only between one and three qualified investors each.

"The number of investors who have qualified is low, leading to low competition between bidders," the statement said.

The ministry, therefore, has decided to switch exclusively to local bidding for the expressway, which would "ensure national security and expand Vietnamese firms’ capability in constructing infrastructure," it noted. 

The ministry earlier stated that it has received expressions of interest from 60 investors - 30 from China, 15 from South Korea, France and the Philippines, and 15 from Vietnam.

Many Japanese and European investors had earlier expressed interest in the projects but none have submitted bids. Experts said the absence of guarantees related to minimum returns and foreign exchange risks have kept these investors away.

Vietnamese investors had expressed concern that experienced foreign counterparts with deep pockets will outmatch them in bidding for the expressway.

The public had also voiced their concern on social media about the possibility of Chinese firms, which are notorious for their delayed and low quality construction, winning the bids.

Some people argued that the tardy, incompetent performance by Chinese contractors in Hanoi's first urban railway project, the Cat Linh - Ha Dong metro route, requires that management agencies take this into consideration when selecting investors for the North-South Expressway.

The 11 components of the North-South Expressway are among the transport ministry’s top priorities this year. Three of them are publicly funded and the rest are to be built under the PPP model. Work on the eight PPP sections could begin next April, the ministry had said earlier.

The first of the three state-funded sections began construction last week. 

The 11 sections in total will cost over VND100 trillion ($4.3 billion), of which VND40.3 trillion ($1.74 billion) will be funded by the state.

 
 
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