Approval of PPP investment for two major highways through Lam Dong in October 2024

Urgently review investment plans

Updating the investment preparation status of two expressway projects: Tan Phu - Bao Loc and Bao Loc - Lien Khuong, the Ministry of Transport said that Lam Dong province is currently directing investors to complete the feasibility study report of the Tan Phu - Bao Loc project.

Procedures to prepare for investment in two major highways through Lam Dong province are being urgently implemented (Illustration photo).

The feasibility study report of Bao Loc - Lien Khuong project is being appraised by the locality.

Based on the actual progress, the Ministry of Transport requested Lam Dong province to urgently review the investment plan and strive to approve the Tan Phu - Bao Loc and Bao Loc - Lien Khuong expressway projects in October 2024.

Tan Phu - Bao Loc Expressway is about 66km long, passing through two provinces: Lam Dong (55km) and Dong Nai (11km).

According to the approved investment policy, the expressway has a scale of 4 lanes, the roadbed width is 17m. The total estimated investment is 17,200 billion VND.

Bao Loc - Lien Khuong Expressway is about 74km long, invested in a scale of 4 lanes, roadbed width of 17m. Total estimated investment is more than 19,500 billion VND.

Regarding the progress of the two projects, the Government Office recently issued a Notice of Conclusion by Deputy Prime Minister Tran Hong Ha at a meeting on the implementation of the Tan Phu (Dong Nai) - Bao Loc (Lam Dong) and Bao Loc - Lien Khuong expressway projects under the PPP method.

Accordingly, the Deputy Prime Minister requested the People's Committee of Lam Dong province to urgently send an explanatory document and complete the Project Feasibility Study Report to the Interdisciplinary Appraisal Council before September 23, 2024 for appraisal.

The interdisciplinary appraisal council urgently completes the appraisal of the project feasibility study report according to the provisions of the PPP Law before September 30, 2024.

Lam Dong Provincial People's Committee is also assigned to review and report to the Prime Minister on difficulties and problems with regulations on minimum equity capital of investors as prescribed in Decree No. 78/2023/ND-CP dated November 7, 2023 of the Government on State investment credit, recommending the Prime Minister and the Government to consider amending and adjusting the equity capital ratio participating in the project implementation process in accordance with legal regulations on PPP.

Regarding the Bao Loc - Lien Khuong expressway, the Deputy Prime Minister noted that relevant agencies need to study and consider similar policy mechanisms between the Bao Loc - Lien Khuong project and the Tan Phu - Bao Loc project to improve efficiency and feasibility.

Still many difficulties

According to PV's investigation, the Tan Phu - Bao Loc expressway project was proposed by a consortium of investors including Deo Ca Group, Hung Thinh Group and Nam Mien Trung Group to implement the project under the public-private partnership (PPP) method in August 2020 - when the real estate market was quite vibrant.

Construction of this highway was expected to start in 2023 and be completed two years later (in 2025). However, so far, this plan has not been able to be implemented.

According to the capital mobilization plan committed by the parties in the pre-feasibility study report step, the capital source for project implementation will be proposed by the investor consortium members, and sponsored and contributed by banks.

However, up to now, Hung Thinh Corporation, Nam Mien Trung Corporation and Nam A Bank have been unable to continue investing and providing capital due to financial difficulties of the enterprises. Over the past 4 years, only Deo Ca Corporation has pursued, provided funding for project proposal and completed the feasibility study report.

Regarding the Bao Loc - Lien Khuong expressway, the leader of a business interested in the project said that the biggest concern for the business right now is traffic volume.

According to the survey, the area the route passes through is located in a tourist area, the traffic volume is forecast to only peak during the season and is mainly cars. Parallel to the expressway is National Highway 20 which has been invested in with quite good quality, attracting trucks to circulate.

With an optimistic scenario of 9,000 vehicles per day and night, the toll collection period to recover capital is also up to about 23 years. The total investment capital is large (more than 17,000 billion VND), the toll collection period is long, and negotiating for bank loans is not easy.

Source: https://www.baogiaothong.vn/phe-duyet-dau-tu-ppp-hai-cao-toc-lon-qua-lam-dong-trong-thang-10-2024-192240921110326132.htm