Investors flock to PPP projects

08:06 | 02/03/2016 Economy

Transport infrastructure projects under the public-private partnership model are expected to be the key investment channel this year on account of tightened budget purse strings.

Investors flock to PPP projects

So far, the My Thuan-Can Tho expressway project in the Mekong Delta is heading the list of prospective public-private partnership (PPP) transport infrastructure projects in terms of the number of interested and registered investors.

According to Nguyen Danh Huy, head of the Ministry of Transport’s (MoT) PPP Committee, the 23.6 kilometre-long, four-lane highway which connects Tay Do (former Western City), and valued at US$303.5 million, has secured interest from nine domestic and foreign investor consortiums.

Awaiting the go-ahead from government agencies are some heavyweight investors and investor consortiums including Sovico-Imico-Pacific-Cienco 5, Thai Son (under the Ministry of Defense)-Yen Khanh-Cienco 1, Fecon-Coteccons, Infrastructure Development and Energy Investment JSC-IL&FS (India), Long Thanh Golf JSC, and Cuu Long Corporation.

Apart from procuring the rights for toll collection for the stipulated period of 20 years and 11 months along the expressway, the developer will also gain the toll collection rights at the Ho Chi Minh City-Trung Luong highway section for four years and 11 months starting from 2030.

“With such a support mechanism, My Thuan-Can Tho expressway is the first highway project to be implement under the PPP model with direct state capital participation”, said Vu Xuan Hoa, director of the Thang Long Project Management Unit which represents the MoT on project oversight.

The MoT í set to complete the investor selection process and the signing of the investment agreement in the third quarter of this year. If many investors pass the pre-qualifying round, there will be a bidding process, which will be completed before the end of this year-s fourth quarter.

Another PPP highway project drawing a great deal of investor attention is the building of Ring Road No.3’s Tan Van-Nhon Trach elevated highway section in the southern province of Dong Nai. The 17.8 km-long, fourlane route will consist of two phases, 1A and 1B, with the total investment capital of US$446 million.

The project has received investment proposals from a number of investors, including the 4 CIPM-Phu Tho Infrastructure Construction Limited consortium, Licogi Corporation, the KEC-KUMHO consortium (the Republic of Korea), and Samsung Everland.

“The project’s consultant unit expects to get overall approval from the authorised ministry this month, paving the way to start the prequalifying stage and hold the bidding process to select investors between now and the end of 2016”, said Huy from the MoT’s PPP Committee.

These highway projects are on the list of 23 large-scale transport infrastructure projects to source investment capital outside of state budget under the PPP and build-transfer (BT) models. Of the total price tag of around VND39.9 trillion (US$1.83 billion), VND39.4 trillion (US$1.8 billion) will be investors’ equity. All these projects will breal ground or will complete investor selection within this year.

“Although these 23 projects have received investor proposals, the gate to partake in the projects is still open to any investors with feasible investment plans”, affirmed the PPP Committee executive.

Deputy Minister of Transport Nguyen Hong Truong stressed, “This year the MoT will focus on build-operate-transfer (BOT) project execution to evaluate the performance of each investor and project management unit, because these projects’ successful implementation gauges the flexibility and creativeness of transport sector members./.

Source VOV