Ben Luc receives the kiss of life

Ben Luc-Long Thanh highway project - illustration photo

Last week, developer Vietnam Expressway Corporation (VEC) and Asian Development Bank (ADB) inked a $636 million loan package agreement for the 57.8 kilometre long Ben Luc-Long Thanh expressway.

“With the loan, VEC became ADB’s largest recipient in Asia with a total loan portfolio reaching $2.2 billion for its three highway projects,” said ADB Vietnam country director Ayumi Konishi.

According to VEC, this week the Japan International Cooperation Agency (JICA) will send an expert group to work with VEC on the highway project before clinching an agreement to lend Vietnam $634.8 million for the project.

The Ben Luc-Long Thanh highway project reportedly uses a mixed loan scheme. The ADB loan will be disbursed on construction of the highway’s eastern and western sections, a JICA loan will cover construction costs in highway’s mid-sections and the Vietnamese government’s reciprocal capital of $336.9 million will be spent on site clearance, people’s resettlement and taxes.

Lying in the southern key economic zone, the expressway is particularly attractive to road investors. Accordingly, under project consultant estimates the economic internal rate of return (EIRR) of the highway project is over 30 per cent resuming the tool is set at VND1,000 per kilometre for vehicles.

Besides, the highway is a section of Ho Chi Minh City’s beltway 3 - an arterial route in southeastern region - whose core functions are to promote travel between southwestern and southeastern areas with no transit through Ho Chi Minh City and directly connects to important highways, Hiep Phuoc, Thi Vai-Cai Mep seaports and Long Thanh international airport.

The highway will also link to the prospective Ho Chi Minh City-Vung Tau expressway to form part of the southern key economic corridor in the Greater Mekong Subregion (GMS) crossing Bangkok (Thailand), Phnom Penh (Cambodia) and Ho Chi Minh City and Vung Tau city.

VEC is now busy working on the project’s technical blueprints and tender invitation dossiers. Selection of construction contractors under international competitive bidding method would take place in late 2011 and construction would begin in early 2012, said VEC chairman Tran Xuan Sanh.

Construction of the $1.6 billion Ben Luc-Long Thanh expressway will be divided into two stages. The first stage involves building a 27.5-metre-wide road with four lanes. The highway will consist of eight lanes at completion. The whole highway will consist of 11 river-crossing bridges and several viaducts. Construction of the first phase was slated in 2012 and completed in 2017.