VEC continues its mission of paving the way for great achievements.

Two decades have passed, and the Vietnam Expressway Investment and Development Corporation (VEC) is still seeking new directions and opportunities to further its leading role in investing in and developing the national expressway network.

Mr. Truong Viet Dong, Secretary of the Party Committee and General Director of VEC.

Faced with persistent traffic congestion on several national highways, most severely at the gateways to Hanoi, in 2000, the Ministry of Transport (MOT) used surplus funds from the bidding process of the National Highway 1 upgrade project (ODA funding from the World Bank, ADB, and Japan) to pilot the construction of Vietnam's first two expressways: the Phap Van – Cau Gie section and the Hanoi – Bac Ninh section. The project, put into operation in 2001, effectively resolved traffic congestion in both the north-south directions of the capital's gateways.

A pioneering model that places full responsibility on the product.

Recognizing the effectiveness and benefits of investing in highway construction, the Ministry of Transport proposed to the Government the implementation of highway sections such as: Ho Chi Minh City – Trung Luong, Lang – Hoa Lac, Da Nang – Quang Ngai, Hanoi – Hai Phong… A plan for the construction of Vietnam's highway network by 2010, 2015 and 2020 was drawn up.

The biggest challenge was finding the funding to implement this ambitious plan. This is where the idea of ​​establishing a highway investment and development company was born.

The viewpoints and methodologies related to this issue have been discussed, agreed upon, and very specifically defined by the competent authorities.

Firstly , industry and infrastructure are a unified whole for economic development and international competitiveness. A country that wants to industrialize must necessarily have an advanced and modern transportation infrastructure that is one step ahead.

Secondly , expressways are the centerpiece of advanced and modern transportation infrastructure; only expressways can meet both the requirements of high-volume transport and traffic safety in this era of development.

Thirdly , developing social capital is an important tool for socio-economic development and improving people's lives.

Fourthly , investing in highways has long-term socio-economic benefits but requires a large amount of funding and a long payback period; therefore, the state needs to have policies to support investment. In the initial phase, the state directly participates in the investment.

From this perspective, the VEC establishment plan clearly defined a development roadmap in stages. The first stage relied primarily on state capital – budget funds and bond issuance. In the next stage, the state provided support in structuring and guaranteeing loan sources. In the development stage, VEC collected tolls to recover capital and accumulated profits to invest in the construction of the expressway network according to the plan.

The project received the consensus of many agencies and units. Following the Prime Minister's approval document dated October 6, 2004, the Ministry of Transport issued a decision to establish the Vietnam Expressway Investment and Development Company.

The establishment of VEC was an experiment by the Government and the transport sector. Moving away from the classic model of relying on budget allocations, completing projects, and then transferring them to operating units, VEC had to independently seek and mobilize capital, then implement investments in highways in the most efficient way to quickly recover capital and create resources for reinvestment in other expressway projects. This proactive approach and commitment to the quality of invested projects is one of the new features of the VEC model.

A series of large-scale projects built with meager initial capital.

Characterized by its unprecedented model and its focus on an infrastructure sector requiring massive capital investment and a long payback period, VEC's model represents a bold breakthrough and a major shift in investment thinking, but it also places a heavy responsibility on the Corporation.

In its early stages of operation, VEC faced a series of difficulties: The initial capital allocated to form its charter capital was limited compared to the assigned tasks; the economic recession of 2008-2009 and high inflation affected capital mobilization; it had to simultaneously build and shape its organization, prepare for investment, secure funding, and race against time to implement its first projects…

Faced with major tasks and significant challenges, and with the close attention of the Government and relevant ministries and agencies, the leadership, staff, and workers of VEC, with a sense of responsibility and concerted efforts, have gradually perfected their organizational model and successfully attracted investment capital for many key projects.

Over a period of about 10 years (2004 – 2013), starting with an initial charter capital of only 1,000 billion VND, with the guarantee of the Government, VEC has arranged capital sources to invest in expressway projects, with a total investment of up to 108 trillion VND.

From its first project, the Cau Gie – Ninh Binh expressway, for which the Ministry of Transport assigned VEC as the investor with a project investment structure including a charter capital of 1,000 billion VND and capital from the issuance of project bonds guaranteed by the Government, VEC has confidently taken on larger-scale expressway projects.

The Noi Bai – Lao Cai Expressway is one of the largest expressway projects in Vietnam, with a total length of 245km passing through 5 provinces and cities: Hanoi, Vinh Phuc, Phu Tho, Yen Bai, and Lao Cai. The total investment is over 30,000 billion VND.

The Ho Chi Minh City – Long Thanh – Dau Giay Expressway project is the first ODA-funded project – the first project invested by VEC using mixed capital. With a total length of nearly 56km, it is a vital route connecting Ho Chi Minh City with the provinces of the Southeast region.

The Ben Luc – Long Thanh expressway project, with a total length of nearly 60km, passing through Ho Chi Minh City, Long An, and Dong Nai, is the largest infrastructure project in the South with a total investment of over 31,000 billion VND.

The Da Nang – Quang Ngai Expressway Project – the first expressway project in the Central region of Vietnam, with a total investment of over 31,500 billion VND.

With the growth of VEC, and in accordance with the Prime Minister's directive, on June 17, 2010, the Minister of Transport signed Decision No. 1666/QD-BGTVT transforming VEC into the Vietnam Expressway Investment and Development Corporation.

A section of the Pháp Vân – Cầu Giẽ expressway is invested in and operated by VEC.

Seven valuable lessons

Looking back at business operations over the past 20 years, several valuable lessons can be learned.

Firstly , it is necessary to identify specific tasks, remove obstacles, and effectively mobilize the enterprise's resources to focus on implementation.

Secondly , we recognize the crucial role of establishing a stable legal framework to create favorable conditions for VEC's stable operation and development.

Thirdly , we must innovate our perceptions, thinking, and actions to leverage our inherent strengths, utilize all available resources, and make the most of the opportunities presented by the rapidly developing national highway network.

Fourth , develop programs, plans, and solutions that are appropriate to the unit's actual conditions, aiming to meet the diverse needs of citizens and businesses, while strictly adhering to legal regulations and the management of the governing body.

Fifthly , it is necessary to improve the organizational structure, assign responsibilities, perfect the system of internal documents and regulations, and maintain discipline and order within the unit.

Sixth , regularly review the staff, plan for training, fostering, and developing staff, and promptly recruit new personnel; maintain unity within the unit; pay attention to the training, fostering, and development of human resources, especially highly qualified personnel.

Seventh , focus on researching and developing strategies for applying science and technology, especially information technology, to production, implementing digital transformation, and enhancing competitiveness.

There are still some obstacles…

The documents of the 13th Party Congress identified three strategic breakthroughs, including the breakthrough of "Building a synchronous and modern infrastructure system in both economic and social aspects; prioritizing the development of a number of key national projects in transportation, adapting to climate change" to fundamentally overcome bottlenecks for development, strengthen connectivity with the region and the world, and set the goal of developing transportation infrastructure one step ahead to promote the socio-economic development of the country: "Focus on developing the expressway network. By 2025, the North-South expressway will be completed, and by 2030, there will be approximately 5,000 km of expressways."

On September 1, 2021, the Prime Minister issued Decision No. 1454/QD-TTg approving the Road Network Planning for the period 2021-2030, with a vision to 2050. This plan sets the goal of constructing 5,000 km of expressways by 2030, forming 41 expressway routes with a total length of 9,014 km.

The workload is enormous, requiring appropriate policy mechanisms that both ensure state management and promote the initiative of businesses, while maximizing the mobilization of resources for investment and development.

The period from 2021 to 2025 presents many favorable conditions for VEC's management and operation, such as: increasingly deep international integration creating opportunities for tourism development; high traffic volume on expressways; and improved mechanisms and policies for expressway management and operation.

The Politburo and the National Assembly have approved the policy of converting borrowed capital from relending and government guarantees into state budget allocations to increase VEC's charter capital.

Specifically, after transferring the ownership representation from the Ministry of Transport to the State Capital Management Committee at Enterprises, VEC will be eligible to participate in bidding for infrastructure investment projects under the PPP model managed by the Ministry of Transport, in accordance with the regulations in Law No. 64/2020/QH14 on investment under the public-private partnership method.

The obstacles related to policy mechanisms for VEC have been initially resolved. However, the procedures for handling the next steps still involve many stages and steps, requiring a long time to complete.

The system of standards and regulations for managing and operating expressways is incomplete, especially in the area of ​​vehicle weight control (there are no operational standards, and no standards for weighing systems after ETC is put into operation).

VEC's charter capital is very low (1,115 billion VND) compared to the enormous investment scale of the expressway projects. Raising capital from commercial banks and credit institutions to invest in these projects faces many difficulties.

Strengthening linkages and participating in public-private partnership projects.

After 20 years of construction and development, VEC has "spread its wings," keeping pace with the times, expanding its operations to many provinces and cities nationwide: Hanoi, Vinh Phuc, Phu Tho, Yen Bai, Lao Cai, Ha Nam, Nam Dinh, Ninh Binh, Da Nang, Quang Nam, Quang Ngai, Ho Chi Minh City, Dong Nai, Long An, Can Tho, and Vinh Long.

Affirming its leading role in investing in the development of Vietnam's expressway network, based on the approved restructuring plan for VEC, the Corporation will continue to develop a plan to supplement VEC's charter capital based on the portion of capital that the National Assembly decided to convert from loans to government guarantees to state budget allocations, and submit it to the National Assembly for approval.

Based on that, the Prime Minister decided to supplement and increase the charter capital of VEC. This increase in charter capital will enable VEC to access investment capital to implement new projects; and complete the drafting and submission of the VEC restructuring plan to the competent authorities for approval.

Towards sustainable development, VEC will develop plans to utilize idle capital rationally and effectively to preserve and develop capital in accordance with regulations; study the restructuring of loan debts, and propose financial mechanisms to ensure resources continue to participate in investing in future projects.

In the field of construction investment, parallel to accelerating progress and putting the Ben Luc - Long Thanh expressway into operation in 2025, and completing the procedures for adjusting the project to implement and complete the remaining items of the Da Nang - Quang Ngai expressway, VEC will focus resources and intensify work with competent authorities through investment plans to expand existing expressways.

Specifically, the project to expand the Ho Chi Minh City – Long Thanh – Dau Giay expressway, specifically the Ho Chi Minh City – Long Thanh section, will increase the number of lanes from 4 to 10, with a total length of nearly 22 km. The total investment for the project is approximately over 14,300 billion VND. Implementation is scheduled to begin after 2035.

The project to expand the Noi Bai – Lao Cai expressway, specifically the Yen Bai – Lao Cai section, from 2 lanes to 4 lanes, spans a total length of 122km. The proposed total investment is over 7,200 billion VND, funded by the State budget. The project is scheduled for implementation between 2024 and 2028.

The project involves expanding the Cau Gie – Ninh Binh expressway, specifically the Dai Xuyen – Liem Tuyen section, from 4 lanes to 6 lanes. The total length is nearly 20km, with a total investment of approximately 600 billion VND. The project is scheduled for completion between 2024 and 2027.

In addition, some routes along the North-South expressway axis will be studied for investment on a full scale; VEC is also studying some expressways that are significant for serving national defense and security, socio-economic development, and poverty reduction, but which are difficult to attract other economic sectors to participate in.

Expanding its scope of operations, VEC is orienting its research towards forming joint ventures and partnerships with private investors to establish project joint-stock companies to participate in expressway projects under the PPP investment model.

Regarding the field of operation and management, recognizing this as its core business, VEC will continue to effectively implement operation and exploitation activities, striving to achieve higher traffic volume and revenue growth rates than in the previous five years.

Specifically, the targets set for 2025 include achieving toll revenue of 6,000 billion VND per year, and reducing traffic accidents on expressways by at least 5% compared to the 2016-2020 period across all three criteria: number of accidents, number of fatalities, and number of injuries.

By 2035, VEC aims to manage and operate 1,500km of expressways; effectively organize maintenance and repair work, and maximize the investment efficiency of projects.

Several other solutions are also being studied and implemented, such as: participating in bidding for the exploitation and operation of sections of the North-South expressway invested with public investment capital; strengthening support mechanisms for member units to develop markets outside VEC, such as financial guarantees, resource support, and machinery and equipment.

Improving the efficiency of investment management, construction, and operation of expressways, and applying information technology, are identified by VEC as key issues in its long-term development strategy.

Digital technology has been and is being strongly applied in various areas, from project management; toll collection management; intelligent transportation systems (ITS); vehicle load control and monitoring; asset management; and highway operation management…

With specific tasks set out, the leadership, staff, and employees of VEC are aiming for a brighter business outlook with the goal of achieving total revenue of over 32,400 billion VND in the 2021-2025 period, after-tax profit of nearly 4,200 billion VND, and contributing 3,375 billion VND to the State budget.

Recognizing that attracting high-quality human resources is one of the "key" factors for VEC's successful implementation of its strategy, the Corporation has oriented itself towards reforming the salary, bonus, and remuneration mechanisms for employees, managers, and business executives to be reasonable, highly competitive, and linked to labor productivity and business efficiency; and strengthening training and professional development to improve the expertise of its management and workforce to promptly meet VEC's development needs in each stage.