The Ministry of Transport agrees with the opinion of the State Capital Management Committee that the Vietnam Expressway Corporation (VEC) has the capacity to act as the investor and manage the operation of the Hochiminh City – Long Thanh Expressway.
The Ministry of Transport believes that compared to public investment and investment through the PPP model, assigning VEC to implement the project has several advantages.
 The Ministry concurs with the State Capital Management Committee that VEC possesses the requisite capabilities to serve as the investor and operator of the Hochiminh City – Long Thanh Expressway. |
Firstly, it maximizes the role and resources of state-owned enterprises, aligning with the objective of forming VEC and ensuring synchronized operation and management of the expressway. This also sets the foundation for VEC to invest in expanding the expressways under its management.
Secondly, it considers VEC’s ownership status of the road assets during the upcoming period, as the procedure to transfer these assets to VEC through an increase in charter capital is underway.
Thirdly, it does not require the use of public investment capital, thus reducing pressure on the state budget.
Fourthly, the implementation time is shorter.
Fifthly, by assigning VEC, there will be no need to address potential conflicts of interest between VEC and a new entity, which could arise in the case of PPP investment.
“Using the capital of state-owned enterprises like VEC to invest is one of the three current forms of investment in transport infrastructure, similar to how the Vietnam Air Traffic Management Corporation and the Vietnam Airports Corporation invest in airport infrastructure,” the report states.
According to the proposed plan, the expansion project of the Hochiminh City – Long Thanh Expressway will be nearly 22 kilometers long.
Of this, the section from the Hochiminh City Ring Road 2 Junction (Km 4+000) to the Hochiminh City Ring Road 3 Junction (Km 8+770) will be expanded to eight lanes as per the plan.
The section from the Hochiminh City Ring Road 3 Junction (Km 8+770) to the Bien Hoa – Vung Tau Expressway Junction (Km 25+920) will be invested in and expanded to 10 lanes as per the plan.
The preliminary total investment capital for the project is estimated at VND 14,955 billion (including loan interest during the construction period, excluding site clearance costs). Of this, owner’s equity is VND 5,555 billion (37%), and commercial loans are VND 9,400 billion (63%).
VEC will mobilize 100% of the capital to implement the project and organize the exploitation and collection of fees for repayment. The central budget/local budget (Ho Chi Minh City, Dong Nai) will be used for site clearance and separated into an independent project in the form of public investment.
If approved by the competent authority, the project will be prepared for investment from 2024 to 2025 and implemented from 2025 to 2027.
N. Huyen
