Removing bottlenecks in the mechanism

Dinh An Group is constructing the eastern section of the North-South Expressway, specifically the National Highway 45-Nghi Son section.

Most large-scale investment projects implemented in recent years, especially transportation projects, have encountered obstacles due to many outdated legal regulations. Therefore, developing specific mechanisms is a crucial factor in ensuring that projects are completed on schedule.

Immediately after the commencement of the first phase (2017-2021) of the North-South Expressway component projects, a series of obstacles such as land clearance, complex procedures for granting mining permits, and soaring material prices became "barriers" causing significant delays in the progress of some projects. According to the Mineral Resources Law, the procedure for granting permits for new material mining operations involves many steps, including adjusting and supplementing exploration and exploitation plans; auctioning mining rights; preparing exploration proposals, approving reserves, developing investment projects, and granting mining permits. This process can take up to a year, making it very difficult to meet the project implementation schedule.

Shorten the time, speed up the progress.

Under pressure to meet deadlines, the National Assembly and the Government have issued a special pilot mechanism for the exploitation of mineral resources for common building materials, with a mechanism for direct contracting; assigning investors the right to exploit mineral mines; decentralizing power and allocating capital to provincial-level authorities to implement projects..., contributing to accelerating the implementation of projects.

Mr. Cao Dang Hoat, Chairman of the Board and General Director of Dinh An Group, the contractor for the first phase of the North-South Expressway project, specifically the section from National Highway 45 to Nghi Son, stated that to provide earth fill for packages XL01 and XL02, Dinh An requested the Thanh Hoa Provincial People's Committee to grant them the right to exploit an earth mine in Nhu Thanh district with a reserve of approximately 5 million cubic meters, and this request was approved. With the granted mining rights, the contractor will be able to proactively manage the quantity and ensure that the cost does not exceed the budget, facilitating the smooth implementation of the project.

The North-South Expressway Project Phase II (2021-2025) is also permitted to apply this mechanism immediately. Contractors only need to prepare registration documents specifying the area, capacity, volume, method, equipment, and exploitation plan to submit to the provincial People's Committee where the material mine is located for confirmation of the registered exploitation volume and to fulfill the required commitments to complete the material mine licensing procedure.

The application of appropriate and effective mechanisms during project implementation is a core factor in making the goal of completing 3,000 km of highways by the end of this year more realistic than ever before.

The application of appropriate and effective mechanisms during project implementation is a core factor in making the goal of completing 3,000 km of expressways by the end of this year more realistic than ever. Experts also expect that if the National Assembly and the Government continue to pay attention and adjust and supplement mechanisms in a timely manner, the modernization of the road transport system will be further accelerated, with the top priority being to have approximately 5,000 km of expressways nationwide by 2030.

Associate Professor, Dr. Tran Chung, Chairman of the Vietnam Association of Road Transport Infrastructure Investors (VARSI), noted that since 2016, the flow of capital into the transport sector through public-private partnerships (PPP) has tended to stagnate. When the PPP Law officially came into effect, the most crucial "bottleneck" was Article 69, which stipulates that state capital participation should not exceed 50% of the total investment of a project, making the financial viability of PPP projects less attractive. As a result, currently only a few PPP projects are being implemented, and if investors lack strong commitment, the projects will certainly remain "feasible on paper."

At its 6th session (November 28, 2023), the 15th National Assembly passed a Resolution piloting a special mechanism, allowing the State capital ratio to be increased to 70%, helping to "unleash" financial plans, create confidence for investors, and encourage contractors of the two expressway projects, Huu Nghi-Chi Lang and Dong Dang-Tra Linh, to accelerate progress and bring the projects into operation by the end of this year.

"VARSI is gathering opinions from investors to draft a proposal to submit to the Government and the National Assembly for consideration, further adjusting the PPP Law to address emerging shortcomings, thereby building a flexible legal framework that is consistent with reality and more attractive, in order to maximize the mobilization of private resources and make these resources a leading driving force in economic development," emphasized Dr. Tran Chung.

The effectiveness of the domestic general contractor model.

According to Dr. Nguyen Chi Sang, Chairman of the Vietnam Mechanical Engineering Business Association (VAMI), the special mechanism previously applied successfully in many hydropower projects has contributed to reducing the price of hydraulic mechanical equipment from 3,500 USD/ton of finished product to nearly half, only 1,700 USD/ton.

However, equipment cost is only a small part of the problem; self-reliance is what truly matters. The clearest example is the Son La Hydropower Project, where the EPC (Engineering, Procurement, and Construction) model, involving corporations such as Song Da, Lilama, Licogi, Truong Son, and the investor, Vietnam Electricity Group (EVN), completed the project more than two years ahead of schedule. This model was successfully applied to the Lai Chau Hydropower Plant, exceeding the schedule set by the National Assembly by one year. "The Son La hydropower plant has a total investment of approximately $6 billion. Due to self-reliance in the hydraulic engineering aspects, the plant's progress is more than two years ahead of schedule. Preliminary calculations, including bank interest and the value of electricity generated during that period, have brought benefits to the budget of approximately $2.6 billion," said Dr. Nguyen Chi Sang.

Similarly, the transformer products of Dong Anh Electrical Equipment Corporation are a very vivid example of self-reliance. Previously, to invest in and purchase a 250 MVA transformer from abroad, the lowest price was about 3 million USD, but when Dong Anh Electrical Equipment Corporation was able to produce it itself, the price dropped to only 1.5 million USD.

According to Nhan Dan Newspaper

Source: https://baohoabinh.com.vn/12/200342/Go-diem-nghen-co-che.htm