11:06 | 12/12/2016 Economy
(VEN) - The government is seeking approval for a new expressway connecting Hanoi and Ho Chi Minh City with total expected investment capital of more than US$10 billion, including over VND93.5 trillion from the state budget. Many proposals in earmarking capital for its project have been underlined.
Finding ways to call for investment
A new expressway connecting Hanoi and Ho Chi Minh City with four to six lanes for total length of 1,373km is divided into 20 projects that cost nearly VND230 trillion. The government is expected to cover more than VND93.5 trillion, while private investors will take the rest.
In the medium-term public investment plan during the 2016-2020 period, about VND70 trillion of government bonds are used as the state’s capital contribution.
According to the Ministry of Transport, a new expressway linking Hanoi and Ho Chi Minh City is a part of the North-South Expressway. Together with the country’s socioeconomic development, a rapid increase of vehicles has made the existing National Highway 1 overloaded, which cannot expand anymore. Therefore, the project is seen as the government’s major effort to create a breakthrough.
Deputy Minister of Transport Nguyen Nhat said that it is necessary to make appropriate investment roadmap, which will not only promote the country’s economic development in accordance with national resources but also ensure the feasibility of the project. Calling for private investment is required in addition to over VND93.5 trillion from the state budget. Accordingly, a new expressway linking Hanoi and Ho Chi Minh City is proposed to be built in the form of public-private partnership (PPP) investments.
Attracting foreign investors
Dr. Le Xuan Nghia, member of the National Monetary Policy Consulting Board said, “More than VND93.5 trillion will come from the issuance of government bonds instead of official development assistance (ODA) funds.” Vietnam needs to have a mechanism for businesses to borrow capital from foreign countries and clarify the charging for return on investment, Le Xuan Nghia added.
Vietnam Expressway Corporation General Director Mai Tuan Anh said that a new expressway linking Hanoi and Ho Chi Minh City targets to attract foreign investors in order to have more resources.
Deputy Minister of Transport Nguyen Nhat:
The Ministry of Transport will develop a specific mechanism submitted to the government to invest in expressways. The
construction and ground clearance should be separated to ensure the feasibility of the project.