Expanding the Ho Chi Minh City Expressway

(NLĐO) - Compared to public investment and investment under the PPP method, the fact that VEC has been assigned to invest in the expansion project of the Ho Chi Minh City - Long Thanh expressway will have 5 advantages.

The Ho Chi Minh City - Long Thanh expressway is about to be expanded. Photo: Ngoc Han.

The Ministry of Transport has just submitted a report to the Standing Committee of the Government on the investment plan for the expansion project of the Ho Chi Minh City - Long Thanh expressway section.

According to a report by the State Capital Management Committee at enterprises, the investment scope extends from the Ho Chi Minh City Ring Road 2 intersection to the Bien Hoa - Vung Tau expressway intersection (Km4+000 - Km25+920), with a length of 21.92 km.

Regarding investment scale: The section from the Ho Chi Minh City Ring Road 2 intersection (Km4+000) to the Ho Chi Minh City Ring Road 3 intersection (Km8+770): 8 lanes as planned. The section from the Ho Chi Minh City Ring Road 3 intersection (Km8+770) to the Bien Hoa - Vung Tau Expressway intersection (Km25+920): 10 lanes as planned.

The Vietnam Expressway Investment and Development Corporation (VEC) will mobilize 100% of the capital to invest in the project and organize its operation and toll collection for capital recovery. Central/local budgets (Ho Chi Minh City, Dong Nai) will be used for land acquisition, and the project will be separated into an independent public investment project.

The preliminary total investment is approximately VND 14,955 billion, of which VND 5,555 billion (37%) is equity capital and VND 9,400 billion (63%) is commercial loan capital.

If approved by the competent authorities, the project will be prepared for investment from 2024-2025, and implemented from 2025 to 2027.

The Ministry of Transport agrees with the opinion of the State Capital Management Committee at Enterprises that VEC has sufficient capacity to be the investor and manage, operate, and manage the Ho Chi Minh City - Long Thanh expressway, and believes that compared to public investment and investment under the PPP method, entrusting VEC with the project will have 5 advantages.

Firstly, it is important to leverage the role and resources of state-owned enterprises, in line with the objectives of establishing VEC, ensuring synchronization in the operation and exploitation of expressways, and laying the groundwork for VEC to invest in expanding the expressways under its management.

Secondly, it aligns with VEC's future ownership of this road project (the process of transferring this asset to VEC through an increase in charter capital is currently underway). Thirdly, it avoids the need to use public investment funds, reducing pressure on the state budget.

Fourth, the implementation time is shorter. Finally, the option of assigning the project to VEC will avoid resolving conflicts of interest between VEC and the new entity (as in the case of investment under the PPP method).

To ensure the resources for implementing the Ho Chi Minh City - Long Thanh expressway expansion project assigned to VEC, the Capital Management Committee has proposed that the competent authority consider and allow the deferral and postponement of principal repayment (nearly 4,000 billion VND advanced by the Ministry of Finance to VEC) and interest related to the construction bonds advanced by the Ministry of Finance from the 2022-2026 period to the 2031-2034 period.

Commenting on this issue, the Ministry of Transport stated that VEC is currently dedicating all its available resources (over 9,400 billion VND) to completing the Ben Luc - Long Thanh project. Therefore, the only solution left for VEC to have equity capital to implement the expansion project of the Ho Chi Minh City - Long Thanh expressway is the one proposed by the Capital Management Committee.

According to Decree No. 92/2018/ND-CP and Decree No. 91/2018/ND-CP, the Prime Minister has the authority to consider debt restructuring based on a report from the Minister of Finance.

The Ministry of Transport supports VEC's proposal. However, VEC needs to further study the option of repaying the principal and postponing interest payments. This includes clarifying the interest payments in each period before proposing a plan for submission to the competent authority for decision.

Regarding the capacity to mobilize commercial loans, on October 17, 2024, the State Capital Management Committee submitted to the Government a plan to supplement VEC's charter capital for the 2024-2026 period with 38,251 billion VND. The Government Office is currently seeking opinions from relevant ministries and agencies.

To ensure VEC meets the conditions for commercial loans, the Ministry of Transport has requested relevant agencies to expedite the procedures for reporting to the Government for consideration and submission to the National Assembly for a decision on the policy of supplementing VEC's charter capital. This is one of the conditions for the Prime Minister to approve the investment policy for the project.

Source: https://nld.com.vn/mo-rong-cao-toc-tp-hcm-long-thanh-len-8-10-lan-xe-19624113012293606.htm