Proposal to expand the entire North-South expressway under the PPP method

The enterprise proposed a feasible investment plan under the public-private partnership (PPP) method to expand the entire eastern North-South expressway with a total length of about 1,241km, from 4 incomplete lanes to 6 complete lanes.

Accordingly, Deo Ca Group proposed to expand 19 component projects of the North-South Expressway that have been invested in the period of 2017-2025 according to 2 options, option 1 is divided into 7 component projects, suitable for many enterprises to participate in investment under the PPP method. Option 2 is divided into 3 component projects, suitable for the model of a number of large enterprises participating in investment under the PPP method (VIDIFI, VEC, Deo Ca, Son Hai...).

In both options, Deo Ca proposes that businesses and contractors that have performed well in the phase 1 project will be invited to participate in the expansion project to take advantage of existing human resources and equipment, increasing value for development.

“These are investment plans that have been reviewed, adjusted and further improved by the enterprise based on the guidance of the leaders of the Ministry of Construction , the professional opinions of the units under the ministry as well as enterprises in the transport sector,” affirmed a representative of Deo Ca Group.

These latest proposed options all ensure compliance with the agreed principles and directions. Specifically, this is a feasible option for large-scale enterprises to participate in PPP investment in the spirit of Resolution 68-NQ/TW; smaller-scale enterprises can participate in construction, thereby effectively using existing human resources and equipment, continuing to develop in scale like the PPP++ model that Deo Ca Group is applying in many PPP projects on transport infrastructure.

The proposal to expand the entire North-South expressway has the advantage of saving the state budget to the maximum extent, is feasible for investment under the PPP method, and will be completed in 2027-2028.

These options are also consistent with the Government 's direction on studying the option of franchising toll collection on the expressway section invested by the State in combination with upgrading and expanding the expressway. At the same time, it saves the maximum state budget, is feasible to invest under the PPP method, and completes the project of expanding the entire route in 2027-2028.

In the petition, Deo Ca Group proposed three financial scenarios. Scenario 1: The State collects tolls according to the approved plan for the public-invested expressway section, then hands it over to the expansion project investor for continued implementation upon completion of the expansion. The component projects are implemented under BOT contracts, with a total investment of about VND186,000 billion depending on the plan.

Scenario 2: Implement toll collection concessions on expressway sections invested by the State to investors expanding the expressway. Projects are in the form of mixed O&M-BOT contracts with a total investment of more than 193,000 billion VND.

Scenario 3: Collecting tolls to recover capital from expressway sections invested by the State in combination with recovering capital from expanded component projects, the value paid to the budget is determined in the financial plan and according to the project contract implementation period. The projects are in the form of mixed O&M-BOT contracts, with a total investment of about 186,000 billion VND.

Deo Ca Group offers 3 financial scenarios for investment in expanding the North-South expressway.

Analyzing in detail the advantages and disadvantages of each scenario, Deo Ca proposed a suitable plan to complete the expansion of the highway in 2027-2028, which is a BOT contract, in which the State collects tolls to recover capital for the public investment part of the highway during the expansion construction period as in scenario 1.

For this scenario, the total estimated budget revenue is about 9,100 billion VND, with the advantage of avoiding complicated problems due to the failure to complete warranty obligations and final settlement of ongoing phase 1 projects, and the toll collection project on the expressway invested by the State is not affected.

“With the goal of developing private enterprises according to Resolution 68-NQ/TW, avoiding complicated problems due to the failure to complete warranty obligations and finalize payments for ongoing phase 1 projects, when implementing the toll collection franchise combined with expansion investment, difficulties will arise when this problem arises,” the document stated.

In order to soon realize the policy of expanding the entire eastern North-South Expressway, which can be completed in 2027-2028, as an important infrastructure foundation for the target of double-digit economic growth in the coming period, Deo Ca Group proposed that the Prime Minister agree on the plan to divide the component projects (7 component projects or 3 component projects) of the overall project to expand the 1,241km North-South Expressway (currently there are 19 projects, including 3 PPP projects, in operation or to be completed in 2025).

The enterprise proposed that the Prime Minister approve the assignment of Deo Ca Group to prepare a proposal for an investment project to expand the entire route under the PPP method in accordance with the provisions of the PPP Law.

In case of choosing to divide into 3 component projects, the Group proposes that the Prime Minister consider and assign Deo Ca Group (in a joint venture with a number of large transport enterprises) to prepare a proposal for component project 1 (from Mai Son to Hoai Nhon, 651km long) and component 3 (from Cam Lam to Dau Giay, 278km long) and Son Hai Group to prepare a proposal for component project 2 (from Hoai Nhon to Cam Lam, 312km long); propose that the Ministry of Construction be the competent authority, in coordination with the Ministry of Finance, to consider a plan to support the state budget for a number of component projects (if necessary).

Deo Ca Group proposed that the Ministry of Construction synthesize and report to the Prime Minister the above proposals. At the same time, in case of needing support from the State budget (expected to be up to 7% of the total investment for the expansion), the enterprise proposed budget support for a number of component projects to ensure financial feasibility.

The Group commits that, when assigned to prepare a project proposal under the PPP Law, it will complete the project proposal to meet the completion target in 2027-2028.

Source: https://baotuyenquang.com.vn/de-xuat-mo-rong-toan-tuyen-cao-toc-bac-nam-theo-phuong-thuc-ppp-213054.html