Proposal for synchronous investment plan for Dong Dang expressway

Proposal for synchronous investment plan for 4-lane Dong Dang - Tra Linh expressway

The expansion of Dong Dang - Tra Linh expressway to the planned scale of 4 lanes, roadbed width of 17m is proposed to be implemented as an independent project from the phase 1 project that is being invested in.

Perspective of Dong Dang - Tra Linh highway.

Perspective of Dong Dang - Tra Linh expressway phase 1.

The consortium of Deo Ca Group Joint Stock Company - ICV Vietnam Investment and Construction Joint Stock Company - Deo Ca Transport Infrastructure Investment Joint Stock Company - 568 Construction Joint Stock Company has just sent Document No. 313/2024/DCG to the Management Board of Investment and Construction Projects of Cao Bang Province on the plan to synchronously invest in the entire Dong Dang - Tra Linh Expressway on a complete scale using the PPP method.

It is known that the consortium of Deo Ca Group Joint Stock Company - ICV Vietnam Investment and Construction Joint Stock Company - Deo Ca Transport Infrastructure Investment Joint Stock Company - 568 Construction Joint Stock Company is the investor selected to implement the Dong Dang - Tra Linh Expressway Construction Investment Project Phase 1 under the PPP method with the construction of about 93km with a scale of 2 lanes, roadbed width of 13.5m.

The completion of the Dong Dang - Tra Linh expressway according to the planning scale will include expanding the section Km0+00 - Km93+35, locations with a roadbed width of 13.5m to a scale of 4 expressway lanes with a roadbed width of 17m and arranging intermittent emergency lanes and constructing the expressway section from Km93+350 (the end point of phase 1) to Km121+060 with a length of 27.71 km also according to the scale of the roadbed width of 17m with 4 expressway lanes and arranging intermittent emergency lanes.

Currently, the Phase 1 Project is invested under the PPP BOT contract method, and is being implemented by the relevant parties based on the signed Project Contract and other agreements. The project enterprise is also carrying out procedures to sign a credit contract for the Phase 1 Project with VP Bank.

"Therefore, adjusting the Phase 1 Project will require adjusting the investment capital source, which will affect the signing of the credit contract and credit disbursement for the Phase 1 Project," said the investor consortium.

On this basis, the investor proposes to continue implementing the Phase 1 Project according to the Project Contract signed between the parties. The investment to complete the entire route will be carried out by an independent project (Phase 2 Project) under the PPP method and divided into 2 component projects.

Specifically, Component Project 1 will invest in the construction and expansion of the Km0+00 - Km93+350 section with a 17m roadbed with 4 expressway lanes and an intermittent emergency lane. The total estimated investment is about VND 4,343 billion, implemented in the form of public investment from the state budget.

Component project 2 will invest in PPP to build the section Km93+350 - Km121+060 with a roadbed width of 17m with 4 expressway lanes and an intermittent emergency lane arrangement.

The total investment of Component Project 2 is about 5,608 billion VND, of which the state budget contributes 70% of the total investment (about 3,900 billion VND), the investor arranges equity capital and other capital is 30% of the total investment (about 1,708 billion VND). The payback period of Component Project 2 is 41 years and 7 months.

The consortium of investors proposed that the People's Committee of Cao Bang province report to the Government and the National Assembly to allocate additional state budget capital for Component Project 1 of VND 4,343 billion and for Component Project 2 of VND 3,900 billion (total proposed additional state budget capital is VND 8,243 billion).

Cao Bang Provincial People's Committee organized the preparation of the Project Phase 2 proposal with 2 component projects. Organized the bidding to select investors to implement Component Project 2 according to regulations.

With the current situation of the Project, difficulties in traffic volume leading to prolonged toll revenue, complex construction terrain when the investment rate is very low, it requires the cooperation of ethnic enterprises and credit institutions. Therefore, the consortium of investors recommends that the Ministry of Transport and the Ministry of Planning and Investment create conditions for enterprises that are also contractors investing in difficult PPP projects such as the Dong Dang - Tra Linh, Huu Nghi - Chi Lang expressways... to participate in the construction of public investment projects under the Central budget (when the investing enterprises only accumulate profits from construction, depreciation of machinery and equipment to reinvest in the projects).

In addition, the Ministry of Construction and the Ministry of Transport need to consider promptly removing obstacles regarding construction norms and unit prices to ensure implementation costs are close to reality, creating resources for domestic construction enterprises to survive and develop.

Previously, in Official Dispatch No. 16, the Prime Minister assigned the Ministry of Transport to preside over and coordinate with relevant localities to urgently study investment plans and upgrade expressways that have been invested in phases to reach the scale of complete expressways, in accordance with design standards and transportation needs in accordance with the Prime Minister's direction in the above documents; in which, the earliest investment will be focused on expressways with a scale of 2 lanes. At the same time, review and supplement fully and synchronously the infrastructure works on the route (such as intelligent traffic systems, rest stops, etc.); report to the Prime Minister in March 2024.

Source