Vietnam targets additional 2,500km of highway by 2020, private participation needed

With such a goal, the participation of the private sector is necessary to help realize it, according to information posted late last month on the official portal of the ministry, mt.gov.vn.

According to a three-scenario plan set out by the ministry, the Southeast Asian country would have an additional 2,300km of highway following the first scenario, and over 2,700km of highway in the most optimistic scenario.

The state will have to spend over VND181.2 trillion (US$8.52 billion) building a total of 2,708km of highway from now to 2020 if it follows the most optimistic scenario, according to the ministry.

The remaining capital, around VND213.3 trillion ($10 billion), will be invested by various sectors, including the private one, the ministry said.

Regarding an investment plan to realize the 2020 target, the ministry said it has so far put into operation 567km of highway.

In addition, around 457km of highway is under construction.

The ministry has also identified three sources of investment capital for three highway projects, including a section of Mai Dich-Nam Thang Long in Hanoi, Dau Giay-Phan Thiet linking the southern province of Dong Nai and the south-central province of Binh Thuan, and a section of Tan Van-Nhon Trach in Ho Chi Minh City, with a total length of 120km.

For investment projects following the previous plan that should be materialized before 2020, there are investors planning to build around 508 kilometers under Build-Operate-Transfer or Build-Transfer mechanisms for seven projects throughout the country, said the ministry.

Thus, by the end of 2015, there will be 700km of highway completed, 457km under construction, 120 km about to be built, and 508km seeking investors, with a total length of 1,785km.

Legal framework just in

Many BOT projects in transport like the Trung Luong-My Thuan Expressway in the southern region, Bac Giang-Lang Son Highway in the northern region, and the My Thuan Bridge 2 in the Mekong Delta province of Vinh Long, have been initiated following a new law paving the way for public-private partnership (PPP) mechanisms in investing in such projects.

Decree No.15 of the government, regulating investment in the form of PPP, was issued late last month, opening up more opportunities for the participation of the private sector in many fields previously capitalized only by the state like infrastructure, transportation, electricity, water, education, transport, health, and the environment.

According to experts, the decree is a prerequisite for infrastructure projects, particularly in the area of transport, to be developed more strongly with firm commitments from the government.

The VND14.6 trillion ($686.3 million) Trung Luong-My Thuan Expressway project that has just been started by a venture of six private contractors is expected to be completed in 2018.