Overview of the conference. (Source: Nguyen Tung)
Vietnam’s Ministry of Transport (MoT) plans to open international biddings for eight sub-projects under the first phase of the Eastern North-South expressway project in the 2017 – 2020 period, according to Nguyen Nhat, vice minister of transport.
The conference drew the participation of around 100 domestic investors and 50 foreign investors from South Korea, Japan, China, Spain, Great Britain, France and Singapore, as well as representatives of 13 cities/provinces within the projects areas, donors and financial organizations, according to the ministry.
At the seminar, which took place in Hanoi City, the local and international investors learned about the project and its processes and requirements for participation.
Local and foreign investors will have equal opportunity to register to invest if they meet requirements, in line with the prevailing regulations.
MOT Deputy Minister Nguyen Nhat said, in the first stage until 2020, Vietnam plans to build 11 sections of the North-South Expressway with a total length of 654 kilometres traversing 13 provinces and cities.
“The MoT has approved project investment plans for the whole 11 projects and is working on technical designs and site clearance, all processes are scheduled to be completed in 2019,” Nhat said.
Three sections will be funded by the government budget while the bidding papers for international tenders held for eight parts of the cross-country expressway under the public–private partnership (PPP) format have been issued to domestic and foreign investors.
Enterprises will be put on the shortlist if they meet at least 60% of the requirements. Financial capacity, which is the most important requirement, is set to account for 60% of the requirements, while experience and proposed methods for executing the project will make up 30% and 10% of the total, respectively.
There are three criteria for assessing investors’ financial capacity: net asset value, equity value and ability to mobilize funds.
Specifically, investors’ net asset value and equity value must both be equal to 20%-30% of the investment required for the project.
If multiple firms form an alliance to get involved in the project, the alliance’s financial capacity will be the total capacity of the members.
As many as 150 local and international organizations and investors are keen on the cross-country expressway project.
The 654-kilometer North-South expressway project, which was divided into 11 subprojects, will be developed with a total investment of over VND118.7 trillion. Of the total, VND55 trillion will come from the State budget and over VND63.7 trillion from the private sector.
Deputy Minister Nhat said the MOT is working to complete the technical designs and site clearance for the projects.
According to Nhat, Deloitte and Ernst & Young are responsible for reviewing the financial structure of the project, drafting the bidding documents and contract forms.
“Selection criteria of investors have gone through a rigorous process and comply with local and international regulations, ensuring transparency, fairness and competition,” Nhat stressed.
“There would be no discrimination between foreign and domestic investors,” he continued.
Nhat affirmed that any capable and experienced investors, who are capable of providing the best services at reasonable costs, will be selected to carry out the projects.
The total costs for these 11 projects are estimated at VND118 trillion (US$5 billion).
Minister of Transport Nguyen Van the said Vietnam is on track to complete 1,500 kilometers of expressway. “Including the Eastern North – South expressway project, Vietnam would have a total of 2,000 kilometers of expressway by 2020.”
The minister said Vietnam would continue to build an additional 2,000 – 3,000 kilometers of expressway in the 2020 – 2025 period, while a number of research suggested the country would need at least 8,000 kilometers of expressway to support socio-economic development.
Nguyen Viet Huy, deputy head of the PPP Department under the MoT, said drawing experiences from previous BOT projects, the government would provide sufficient funds for the site clearance process and provinces/cities in projects area are responsible for completing the works.
“We ensure no changes in toll rates for a foreseeable future,” Huy stated.
As of present, the MoT has sold 80 tender documents for investors, of which many are from Japan, South Korea and China, among others, Huy informed, expecting more to express interests in the next two months.
The three sections that will be entirely funded by the state budget are Cao Bo-Mai Son (15km), Cam Lo-Son La (98km) and My Thuan 2 Bridge, which will cost a total of VND14.279 trillion (around US$614 million).
The sections to be carried out by private investors are Mai Son-National Highway 45, National Highway 45-Nghi Son, Nghi Son-Dien Chau, Dien Chau-Bai Vot, Nha Trang-Cam Lam, Cam Lam-Vinh Hao, Vinh Hao-Phan Thiet and Phan Thiet-Dau Giay.
