The new playground is selective.

Many large businesses that had submitted bids for rest stops on the Eastern North-South Expressway have quietly withdrawn, realizing that it is not easy to find profits in this new and highly specialized business sector.

 

Shaping the leading investor

“We are working closely with project management boards to expedite negotiations with investors. We aim to sign contracts for four projects to build and operate rest stops on the Eastern North-South Expressway by early July 2024,” said Mr. Nguyen Quang Giang, Deputy Director of the Vietnam Expressway Department (Ministry of Transport).

In principle, the winning bid price remains unchanged, so negotiations with investors revolve solely around minimizing the construction time for public works to serve the essential needs of residents and vehicles using the route.

According to Mr. Nguyen Quang Giang, this is not a simple task, because according to the bidding documents for the investment projects to build rest stops on the North-South expressway, the overall implementation schedule is only 15 months, of which the time for completing public service facilities is 12 months.

The public works and free services provided at rest stops on the North-South Expressway, which the winning bidder is required to construct within 12 months of signing the contract, are also substantial, including parking lots; rest areas; temporary rest rooms for drivers; restrooms; information centers; areas for organizing and promoting traffic safety; and areas for rescue and first aid personnel.

Previously, after a period of accelerated progress, the Vietnam Expressway Administration also approved the results of the investor selection for four projects to build and operate rest stops on the Eastern North-South Expressway. These four projects include: the rest stop at Km90+900 under the Cam Lam – Vinh Hao component project; the rest stop at Km144+560 under the Vinh Hao – Phan Thiet component project; the rest stop at Km329+700 under the Mai Son – National Highway 45 component project; and the rest stop at Km47+500 under the Phan Thiet – Dau Giay component project.

Surprisingly, three-quarters of the aforementioned rest stop construction and operation projects belong to the joint venture of Phuong Trang Passenger Transport Joint Stock Company and Thanh Hiep Phat Limited Company (referred to as the Phuong Trang - Thanh Hiep Phat joint venture). These include the Km90+900 rest stop under the Cam Lam - Vinh Hao component project; the Km144+560 rest stop under the Vinh Hao - Phan Thiet component project; and the Km47+500 rest stop under the Phan Thiet - Dau Giay component project.

The total cost that the Phuong Trang - Thanh Hiep Phat consortium had to spend to implement the construction of the three aforementioned rest stops (including money paid to the state budget, compensation, support, and resettlement costs) is approximately 900 billion VND.

The initial success of the Phuong Trang – Thanh Hiep Phat consortium did not come easily, as all three component projects that this consortium won bids for were highly competitive. In fact, for the Investment, Construction and Operation of the Km47+500 Rest Stop Project, part of the Phan Thiet – Dau Giay component project, besides the Phuong Trang – Thanh Hiep Phat consortium, there were six other investor consortia that submitted bids, including some very strong companies.

To select investors with the capacity and experience in operating rest stops, the bidding documents also require that the investor or a member of the consortium must have previously operated or managed specialized road services within the project under consideration, meeting one of two conditions: having a decision announcing the operation of a type 1 rest stop; or having a decision announcing the operation of a type 2, 3, or 4 rest stop, but ensuring that the rest stop has a vehicle inspection, maintenance, and repair area and a fuel station (with supporting documentation).

If the above two criteria are not met, the investor or member of the consortium must have previously operated at least two services: a motor vehicle repair and maintenance workshop or a road traffic rescue center, and a fuel station or electric vehicle charging station. Additionally, they must have operated at least one service from one of the following three categories: parking lots; food and beverage sales; or accommodation.

Based on the aforementioned criteria, the Phuong Trang – Thanh Hiep Phat consortium has many advantages, as Phuong Trang (FUTA Bus Lines) is a very large passenger transport brand in the South, owning a number of large, well-invested rest stops on several key road transport routes.

Among them, the Satra rest stop, invested by Phuong Trang in Tien Giang province, is the largest on the entire national transportation route. This rest stop covers an area of ​​12 hectares, with an investment of up to 100 billion VND, and a comprehensive system of amenities and services.

"We have thoroughly assessed the capabilities of the Phuong Trang - Thanh Hiep Phat consortium. This is one of the major investors, capable of leading the market in the construction and operation of highway rest stops," a leader of the Vietnam Highway Department said.

Many surprises ahead

Besides the case of the Phuong Trang – Thanh Hiep Phat consortium, another enterprise that is also highly anticipated in the bidding for investment projects to build rest stops on the Eastern North-South Expressway is the Vietnam National Petroleum Group ( Petrolimex ).

At the end of June 2024, the Petrolimex – Thua Thien Hue Petroleum Company consortium was selected as the investor for the Project to build and operate the rest stop at Km329+700, part of the Mai Son – National Highway 45 component project, with a monetary value of VND 111 billion paid to the state budget; a preliminary project implementation cost of VND 201.685 billion; and a compensation, support, and resettlement value (M2) of VND 10.454 billion.

"With its very strong financial potential and ownership of the largest fuel station system in the country, it would not be surprising if Petrolimex continues to be named the winner of bids for rest stop projects currently being implemented by units under the Ministry of Transport," said a leader of a company that previously submitted a bid for the Investment, Construction and Operation of the Km329+700 Rest Stop Project, part of the Mai Son - National Highway 45 component project.

According to Mr. Tran Chung, Chairman of the Vietnam Association of Road Transport Infrastructure Investors, with nearly 50 rest stops on expressways needing investment in the next 2-5 years, this is a new business sector attracting the attention of domestic and foreign investors.

However, this is a high-risk business, requiring investors to raise capital of 300-400 billion VND in a very short time (maximum 1.5 years), while the payback period extends to 25 years.

Because public works systems account for a large portion of investment costs and incur significant operating expenses, yet provide free services, investors can only rely on revenue from renting space for food and beverage businesses, fuel sales, etc.

The investment scale for rest stops is generally similar, so if the route has low traffic or traffic growth is not as predicted, the location of the rest stop is not really suitable, and customers spend little, the investor will almost certainly suffer losses.

Therefore, if investment in rest stops is not considered as a sector within the ecosystem (as in the case of Phuong Trang Company) to help offset costs, the investor's chances of going bankrupt are very high.

The Phuong Trang – Thanh Hiep Phat consortium carefully calculated that all three rest stops they won the bid for are adjacent to each other on the approximately 300 km long Eastern North-South Expressway, which has very good traffic volume from Dau Giay (Dong Nai) – Phan Thiet (Binh Thuan) – Vinh Hao (Binh Thuan) – Cam Lam (Khanh Hoa).

Investing in a chain of three or more rest stops will give investors more opportunities to operate while minimizing investment and operating costs due to a shared design and management system. It would be very risky for an investor to operate only one rest stop independently.

It should be added that, previously, the Ministry of Transport had received a proposal from a consortium of Vietnamese and South Korean investors to establish a chain of modern, multi-functional rest stops along the North-South Expressway. This investor subsequently withdrew their application because the management agencies organized bidding for each rest stop individually, rather than bidding for packages of 5 to 10 rest stops as they had expected.

"The race to invest in and operate rest stops on the North-South expressway still promises many exciting surprises ahead, but it is also full of pitfalls if investors do not wisely develop long-term, systematic business plans for this unique sector," Mr. Tran Chung commented.

Source: https://baodautu.vn/kinh-doanh-tram-dung-nghi-san-choi-moi-ken-nguoi-d218893.html