Investment in the Gia Nghia Expressway

Investing in the Gia Nghia - Chon Thanh expressway, while addressing the parallel BOT project.

The investment plan for the construction of the North-South Expressway (Western section) from Gia Nghia (Dak Nong) to Chon Thanh (Binh Phuoc) has been officially submitted to the National Assembly .

Chairman of the Economic Committee Vu Hong Thanh presented the verification report .

Continuing the 7th Session, on the morning of May 22nd, the National Assembly heard a presentation on the investment policy for the construction project of the North-South Expressway (Western section) from Gia Nghia ( Dak Nong ) to Chon Thanh (Binh Phuoc).

Authorized by the Prime Minister to present this proposal, Minister of Transport Nguyen Van Thang stated that the project involves an investment of approximately 128.8 km, of which 27.8 km passes through Dak Nong province and 101 km through Binh Phuoc province (including 2 km connecting to the Ho Chi Minh Highway section from Chon Thanh to Duc Hoa).

According to the plan, the Gia Nghia - Chon Thanh expressway will have 6 lanes. To maximize investment and financial efficiency, and to ensure the balance of funding sources, Phase 1 will be a phased investment with 4 lanes, completed according to standards and regulations; land acquisition will be carried out in one go according to the planned scale (6 lanes).

The preliminary total investment is approximately VND 25,540 billion, of which state capital accounts for VND 12,770 billion, including: VND 10,536.5 billion from the central budget (VND 1,766.5 billion allocated from the medium-term public investment plan for the period 2021-2025 and VND 8,770 billion allocated from increased central budget revenue in 2022); and VND 2,233.5 billion from the local budget. The remaining VND 12,770 billion is capital arranged by investors.

Presenting the verification report, Chairman of the Economic Committee Vu Hong Thanh stated that the Committee agrees with the necessity of investing in this project.

Regarding the investment method, according to the Government's submission, the Project has attracted interested investors who have submitted proposals and requests for agreement on several points to finalize the Pre-feasibility Study Report for the Project under the public-private partnership method.

However, the Review Committee is concerned that the practical implementation of public-private partnership (PPP) investment projects in recent years has shown that attracting investors and credit institutions to participate in these projects faces many difficulties and challenges. Therefore, it is proposed to supplement the basis to ensure the feasibility of the Project, avoiding situations where no investor can be selected or credit capital cannot be mobilized for the Project, leading to a conversion to public investment, which prolongs the time and reduces investment efficiency.

The impact of the Project on parallel BOT transport projects was also a matter addressed by the reviewing agency.

According to the pre-feasibility study report, there are two parallel BOT projects: the BOT Bridge 38 project in Dong Xoai town and the project to upgrade and expand National Highway 14, section Km817 - Km887, Dak Nong province. Therefore, investing in this project will reduce revenue and change the initial financial plan of these projects. However, Submission No. 215 has not clarified the extent of the project's impact on these BOT projects.

In reality, many BOT ( Build-Operate-Transfer) transportation projects are currently facing difficulties and obstacles due to non-compliance with contracts and policy changes affecting the project's financial plan. However, the Government has yet to propose timely and effective solutions to address these issues. Therefore, it is suggested that more specific solutions be added regarding the handling of parallel BOT transportation projects so that the National Assembly has a basis for consideration and decision-making, avoiding negative impacts on the investment and business environment and the future operation and exploitation of the projects, the reviewing agency noted.

Regarding the preliminary total investment, the Economic Committee stated that the preliminary total investment for the Project is approximately 25,540 billion VND, determined based on reference construction costs according to the investment rates of similar projects with the same scale, nature, and conditions in the Project area, and compared with relevant regulations.

"We request a clearer analysis of the costs of land acquisition, compensation, support, and resettlement, especially the costs related to the conversion of forest and rice land for the Project," said Project Manager Vu Hong Thanh.

Regarding the project's loan interest rate of 10.7%, Mr. Thanh stated that there have been suggestions to clarify the appropriateness of this interest rate in relation to the regulations governing the financial management mechanism of investment projects under the public-private partnership (PPP) model.

Furthermore, the financial plan for the Project is based on the maximum price for road usage services per segment as stipulated in Circular No. 28/2021/TT-BGTVT dated November 30, 2021, of the Ministry of Transport, amending and supplementing several articles of Circular No. 35/2016/TT-BGTVT dated November 15, 2016. Therefore, this may exceed the affordability of road users in the area, reducing traffic volume and impacting the financial plan, feasibility, and effectiveness of the Project. Thus, clarification is requested.

Source: https://baodautu.vn/dau-tu-cao-toc-gia-nghia---chon-thanh-lo-xu-ly-du-an-bot-song-hanh-d215773.html