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 Highway.
The Ministry of Transport believes that compared to public investment and investment through the PPP model, VEC has several advantages as the assigned investor for this project.
 The Ministry concurs with the State Capital Management Committee that VEC possesses the necessary capabilities to be the investor and manage the operation of the Hochiminh City – Long Thanh Highway. |
Firstly, this decision empowers and leverages the resources of state-owned enterprises, aligning with the objective of forming VEC and ensuring synchronized operation and management of the expressway network. This also sets the foundation for VEC to invest in expanding the expressways under its management.
Secondly, it considers VEC’s ownership of the road’s assets during the upcoming period, as the procedure to transfer these assets to VEC through increased charter capital is underway.
Thirdly, it does not require the use of public investment capital, reducing pressure on the state budget.
Fourthly, the implementation time is shorter.
Fifthly, by assigning VEC, there will be no conflict of interest to address between VEC and a new entity, which could arise if the PPP model were chosen.
The report states, “Using the capital of state-owned enterprises like VEC to invest is one of the three current infrastructure investment models, similar to how the Vietnam Air Traffic Management Corporation and the Vietnam Airports Corporation invest in airport infrastructure.”
According to the proposed plan, the expansion project of the Hochiminh City – Long Thanh Expressway will be nearly 22 kilometers long.
Specifically, 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 stretch from the Hochiminh City Ring Road 3 Junction (Km 8+770) to the Bien Hoa – Vung Tau Highway Junction (Km 25+920) will be invested in and expanded to ten lanes as per the plan.
The preliminary total investment for the project is estimated at VND 14,955 billion (including interest during construction, excluding site clearance costs). Of this, owner equity accounts for VND 5,555 billion (37%), and commercial loans for VND 9,400 billion (63%).
VEC will mobilize 100% of the capital to implement the investment project and organize the operation and toll collection for repayment. The central budget and local budgets (Ho Chi Minh City and Dong Nai) will be used for site clearance and will be separated into an independent project under the public investment form.
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
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