There will be different mechanisms to soon activate the Ho Chi Minh City - Trung Luong - My Thuan Expressway expansion project worth up to VND38,700 billion to a scale of 6 - 8 lanes under the PPP investment method.
Create a different mechanism to activate the expansion of the Ho Chi Minh City - Trung Luong - My Thuan expressway
There will be different mechanisms to soon activate the Ho Chi Minh City - Trung Luong - My Thuan Expressway expansion project worth up to VND38,700 billion to a scale of 6 - 8 lanes under the PPP investment method.
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| The Trung Luong - My Thuan section will be put into operation from 2022 with a limited 4-lane scale, and land clearance according to a 6-lane scale. |
Finalize implementation progress
The Ministry of Transport (MOT) and the consortium of investors proposing the project have just received specific guidance on the implementation of the PPP Project to Expand the Ho Chi Minh City - Trung Luong - My Thuan Expressway.
Specifically, in Notice No. 558/TB-VPCP issued by the Government Office, Deputy Prime Minister Tran Hong Ha said that at the end of July 2023, the Prime Minister and Government leaders directed the Ministry of Transport to advise, research and propose investment in expanding the Ho Chi Minh City - Trung Luong - My Thuan Expressway. During the research and proposal period for adjusting the Road Network Planning for the period 2021-2025, with a vision to 2050, the Ministry of Transport selected and assigned investors to propose the project and prepare a Pre-Feasibility Study Report for the Project.
“However, the implementation of the Government's directives is slower than required, although there are objective reasons (need to wait for the Road Law to take effect from January 1, 2025). Therefore, the Ministry of Transport is required to urgently implement the next steps to be able to start the Project in the second quarter of 2025,” the Deputy Prime Minister directed.
Regarding the competent authority to implement the Project under the PPP method, Deputy Prime Minister Tran Hong Ha noted the direction of Prime Minister Pham Minh Chinh "...should be assigned to the locality as the competent authority". Therefore, the Ministry of Transport needs to discuss with the People's Committee of Tien Giang province (or related localities), in case of agreement on which locality will be assigned as the competent authority according to the direction of the Prime Minister, it will be submitted to the Prime Minister for consideration and decision in January 2025, in the spirit of ensuring convenience and capacity to organize and implement the Project in the soonest time.
In case the relevant parties agree that the Ministry of Transport will be the competent authority to ensure appropriate organizational capacity and to speed up the investment and construction progress, it is necessary to report back to the Prime Minister.
Regarding the selection of investors, the Deputy Prime Minister assigned the Ministry of Transport to preside over and coordinate with the Ministry of Planning and Investment to propose a plan for selecting investors in accordance with the provisions of the 2023 Bidding Law and the Law amending and supplementing the 2023 Bidding Law No. 57/2024/QH15 to ensure that the selected investors must have full capacity and experience to implement the Project as soon as possible.
According to the Deputy Prime Minister, the Ministry of Transport has submitted to the Prime Minister an adjustment to the planning of the Ho Chi Minh City - Trung Luong section to a scale of 10-12 lanes. Therefore, the Ministry of Transport accepted the opinions of the leaders of the Ministry of Planning and Investment at the meeting, urgently coordinated with relevant localities, established a project for site clearance according to the planning scale; coordinated with the Ministry of Planning and Investment and the Ministry of Finance to balance legal and feasible capital sources for immediate implementation by localities, avoiding additional costs and facilitating expansion investment.
Previously, based on the investor's proposal and according to the provisions of the PPP Law, the Ministry of Transport assigned the joint venture of Deo Ca Group Joint Stock Company - Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) - Tasco Joint Stock Company as the investor to prepare a Pre-Feasibility Study Report to submit to the competent authority for approval of the project investment policy, as a basis for implementing the next steps.
According to the Pre-Feasibility Study Report of the project proposed by the Deo Ca - CII - Tasco Joint Venture, the project will invest in expanding about 91 km of the Ho Chi Minh City - Trung Luong - My Thuan expressway under the PPP method, with an investment scale of 6-8 lanes (the Ho Chi Minh City - Trung Luong section has a scale of 8 lanes, the Trung Luong - My Thuan section has a scale of 6 lanes) in accordance with the width of the cleared roadbed.
With the above investment scale, the total investment of the PPP Project to Expand the Ho Chi Minh City - Trung Luong - My Thuan Expressway, including interest during construction, is VND 38,693 billion.
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Many banks are interested
In Official Dispatch No. 13301/BGTVT-KHDT sent to the Government leaders in early December 2024, Mr. Le Anh Tuan, Deputy Minister of Transport, said that the Pre-Feasibility Study Report has collected opinions from relevant localities. Based on the opinions of the localities, the Ministry of Transport is studying and accepting to complete the Pre-Feasibility Study Report of the project and is expected to complete the preparation of the Pre-Feasibility Study Report in the fourth quarter of 2024; appraise and approve the Pre-Feasibility Study Report in the first quarter of 2025; conduct surveys, prepare the Feasibility Study Report, and organize the selection of investors to implement the Project in 2025.
According to the leader of the Ministry of Transport, the reason why it will take until the first quarter of 2025 to approve the Pre-Feasibility Study Report of the PPP Project to Expand the Ho Chi Minh City - Trung Luong - My Thuan Expressway is because according to current regulations, BOT contracts do not apply the form of direct toll collection from users for projects to renovate and upgrade existing works.
However, Article 84 of the Road Law has been amended to allow the application of BOT contracts to projects to renovate, upgrade, and expand existing expressways. Thus, in order to have sufficient basis for appraisal and approval of the Pre-Feasibility Study Report, it is necessary to wait for the Road Law to take effect (from January 1, 2025).
One of the contents that needs to be approved by the competent authority to be able to start the Project is the recovery of the state budget capital advanced to invest in the Ho Chi Minh City - Trung Luong route, phase I.
Specifically, the Ho Chi Minh City - Trung Luong Expressway Construction Project (Phase I) was advanced with state budget capital for implementation. After completion, toll collection rights will be sold to repay the state budget.
On that basis, the Ministry of Finance has advanced VND 9,563 billion of state budget capital to invest in the Project. During the period 2011-2013, the Ministry of Transport sold the right to collect project fees for 5 years (2014-2018) and recovered VND 2,004 billion to the state budget.
After the expiration of the toll collection rights sale, the law does not allow to continue to collect road tolls on expressways invested by the State, so it is impossible to continue to sell toll collection rights at the Project to refund the state budget. Up to now, the remaining uncollected advance capital plan of the Project is 7,597 billion VND.
Due to the inability to arrange resources to pay this advance budget, during the investment research process of the PPP Project for the Expansion of the Ho Chi Minh City - Trung Luong - My Thuan Expressway, the Ministry of Transport requested the investor to propose a project to study the plan to use the toll revenue of the Project to repay the state budget capital advanced for the investment of the Ho Chi Minh City - Trung Luong Expressway (Phase I).
The investor proposing the project also assessed that this is the most optimal option to be able to soon implement the PPP Project to Expand the Ho Chi Minh City - Trung Luong - My Thuan Expressway in 2025. The expected repayment period is within the first 10 years of collecting tolls to recover capital for the PPP Project to Expand the Ho Chi Minh City - Trung Luong - My Thuan Expressway.
Estimated time to collect fees to recover capital is 23 years and 5 months, of which the first 9 years revenue is not enough to pay interest, so investors must arrange a plan to compensate for interest of about 6,300 billion VND.
“Up to now, there have been at least 4 major domestic banks interested in financing the Project, including Vietcombank, VietinBank, BIDV and VPBank. This partly shows that the Project is financially feasible,” said a representative of Deo Ca Group.
Of which, the Ho Chi Minh City - Trung Luong section is about 40 km long, planned with 6 lanes. The section was invested with state budget advances, completed and put into use since 2010 with a scale of 4 lanes, land clearance according to the scale of 8 lanes.
The Trung Luong - My Thuan section is 51 km long, planned with 6 lanes. The section is invested under the PPP method by the People's Committee of Tien Giang province as the competent authority, put into operation from 2022 with a limited scale of 4 lanes (roadbed width of 17 m), site clearance according to the scale of 6 lanes. Currently, the People's Committee of Tien Giang province is carrying out the final settlement of the project.
Source: https://baodautu.vn/tao-co-che-khac-biet-de-kich-hoat-mo-rong-cao-toc-tphcm---trung-luong---my-thuan-d233024.html
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