International capital needed for north-south expressway project

Int’l capital needed for north-south expressway project (Photo: VNA)

The Ministry of Transport and the World Bank co-hosted a seminar in Hanoi on April 26 to acquire experts’ experience in public-private partnership (PPP) model before launching the project.

Deputy Minister Dong said the ministry has called for investment to develop road infrastructure in the form of Build-Operate-Transfer (BOT) since 1997. However, only domestic investors and credit organisations have so far taken part in BOT projects, he ssaid.

Representatives from the ministries of transport, finance, planning and investment, World Bank, State Bank of Vietnam, and economists proposed measures to clear obstacles regarding risk sharing and bidding mechanism, and capital resources.

Participants discussed a general strategy on the project, risk sharing between authorised agencies and investors, banks and capital market in the construction of expressways in Vietnam, building of effective PPP model based on bidding policy and legal framework, as well as basic difficulties to submit to the high-level meeting scheduled for May.

According to the Transport Ministry, one of the major challenges to infrastructure in general and transport infrastructure in particular is limited investment resource. Public investment meets only 25 percent of the demand.

In many countries, the PPP model is a tool to improve the efficiency of public services and ease financial pressure on governments.

According to the Resolution 52 dated November 22, 2017 of the National Assembly, the eastern North-South expressway project began in 2017 and will be basically completed in 2021. The legislature also adopted several resolutions on mechanisms and policies during the implementation.

The Ministry of Planning and Investment proposed amending Decree No.15/2015 on PPP investment, which is due to be approved by the government in the near future, thus laying an important legal foundation for the project and other BOT transport projects./.

NDO