Potential and opportunities for investment in transport infrastructure

(NADS) - The PPP+++ transport infrastructure investment model is a new direction in transport infrastructure investment where state capital plays the role of seed capital, enterprises are given priority to invest and exploit project-related services and are given long-term credit loans with preferential interest rates, public investment projects can be concessioned for exploitation, localities study and implement mechanisms to collect revenue from exploiting land funds where the project passes through to invest effectively and increase the value of the project.

On March 1, Deo Ca Group organized a Conference on Potential and Opportunities for Investment in Transport Infrastructure under the PPP++ Model to identify and discuss potential and opportunities for investment in transport infrastructure through this model for businesses, banks, investment funds and other partners.

*Overview of the Conference on Potential and Opportunities for Investing in Transport Infrastructure under the PPP++ Model*

Opportunities for all investors

According to the road network planning for the period 2021-2030, the Government sets a target of having 5,000 km of expressway. This is a key task, with the drastic participation of the entire political system, many specific mechanisms have been issued, creating the most favorable conditions for project implementation.

To encourage the private sector to participate, the state budget supports PPP projects as seed capital, enterprises are given priority to invest, exploit project-related services and receive long-term credit loans at preferential interest rates. In addition, public investment projects can be concessioned for exploitation, localities study and implement mechanisms to collect revenue from exploiting land funds where the project passes through to invest effectively, increasing the value of the project.

In addition to roads, the Government is also paying attention to railway development. The Government's goal by 2030 is to invest in 9 railway lines with a length of 2,362km. Land funds for railways are planned appropriately for urban and functional area development to create investment resources. Socialization of railway business and transport services is promoted to attract economic sectors to participate in investment. At the same time, the development of human resources for railway management, construction and operation is promoted to gradually master the core technologies of the industry.

The Government's determination to complete 5,000km of highways by 2030 and the movements of implementing high-speed railways are great prospects for businesses developing transport infrastructure.

There must be investors taking the lead role.

According to information from Deo Ca Group, in 2024, it is expected to invest and build 300km of highways and belt roads with a total investment of more than 82,000 billion VND from typical projects such as Huu Nghi - Chi Lang, Tan Phu - Bao Loc, Ho Chi Minh City - Chon Thanh, Ring Road 4, Ho Chi Minh City - Trung Luong - My Thuan (phase 2)...

To implement the above projects, the PPP++ model is the solution that Deo Ca Group has proposed to mobilize capital for the project from the state budget, equity capital and mobilized capital. Through diversifying mobilized capital sources to increase mobilization efficiency, minimize risks during the project implementation process.

In the capital structure of projects implemented under the PPP++ model, the capital structure is more diversified than the basic PPP model. In addition to state budget capital, equity capital and credit capital, the capital structure under the PPP++ model includes resources from construction profits from the project itself, bonds, stocks, BCC contracts, etc.

Investing in transport infrastructure requires a huge amount of capital, no matter how strong the state is, it cannot "take" all of it with public investment. Therefore, the state has called on the private sector to participate in investment through the PPP method to develop public infrastructure and public services to serve the people.
However, no matter how strong the private sector is, it cannot "go it alone" to cooperate with the state to build a project, but will play the role of "leader" to gather and call on other investors to participate in investment, so the PPP++ model is an innovation to create strong enough resources, together to perform public services. And the "leader" unit must also have enough capacity, brand and especially management capacity to be able to attract other investors. Deo Ca is a unit that converges all the factors to gather and lead other investors to successfully implement projects.
Mr. Ho Nghia Dung - Former Minister of Transport

In addition, capable and experienced contractors participate simultaneously as secondary investors, jointly implementing the project according to the general design-build (EC) or design-equipment-build (EPC) model. This method will contribute to optimizing investment efficiency because the profits from the construction contractor are contributed back to the project investment capital. The benefits and responsibilities of the contractor are linked to the benefits and responsibilities of the investor, linked to the effectiveness of project implementation and operation.

As the leading investor, Deo Ca Group is responsible for organizing project preparation, bidding for project implementation, organizing project management as an investor, and working directly with State agencies (National Assembly, Government, Ministries, etc.). After winning the bid, Deo Ca Group organizes construction according to the GENERAL CONTRACTOR model as a contractor, and at the same time contributes funds according to the project management mechanism as a contractor, manages costs and implements the contents of the project management mechanism. During the project implementation and management - operation phase, Deo Ca Group shares the management model, shares work, supports contractors facing objective difficulties, and handles any arising issues.

As an Investor: units must ensure financial capacity and project management; ensure that Owner's capital always meets the project's progress; regarding project management, Investors will assign experienced personnel to manage and operate the project, apply advanced management models (BIM technology) to ensure project operation on schedule, ensure quality, and save costs.
As an Investor, the units will enjoy a stable Investor return of approximately 13% throughout the project life cycle.
Mr. Nguyen Huu Hung - Vice Chairman of the Board of Directors of Deo Ca Group