Wednesday, 17 Jan 2018
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INVESTMENTOPPORTUNITIES

Vietnam needs US$4.6 billion for transport projects

Updated at Thursday, 28 Dec 2017, 15:13
The Hanoitimes - Vietnam has announced a list of eight investment projects worth roughly VND104.1 trillion (US$4.6 billion) to build sections of the Eastern North-South Expressway for 2017-2021.
The Ministry of Transport (MoT) announced that the projects, which will be invested under the public-private partnership (PPP) model, include Mai Son-National Highway 45, National Highway 45-Nghi Son, Nghi Son-Dien Chau, Dien Chau-Bai Vot, Nha Trang-Cam Lam, Cam Lam-Vinh Hao, Vinh Hao-Phan Thiet and Phan Thiet-Dong Nai.
According to the MoT, the eight projects aim to meet the urgent demand of logistics, gradually form the Eastern North-South expressway, connect economic and political centers and economic and industrial zones, as well as accelerate socio-economic development and ensure the country’s defense and security.
The investment and construction of the projects is expected to be completed in 2021.
The investment and construction of the projects is expected to be completed in 2021.
It said a feasibility report on the projects has been completed. Meanwhile, investment and construction work is expected to be completed in 2021.
Previously, the National Assembly (NA) officially approved the eastern section of the North-South Expressway project last month.
The eastern section of the North-South Expressway project has been attracting many foreign investors from Japan, South Korea, and the United States. South Korea-based Posco E&C has expressed interest in the project after joining many transport infrastructure projects in Vietnam, including the Hanoi-Lao Cai Expressway and the Long Thanh-Dau Giay Expressway.
However, a lack of guarantee mechanisms for investors’ revenue and exchange rate risks remains the biggest challenge for international groups to join the project.
In a move to remove the barriers, Vietnam will begin building a law on public-private partnership (PPP) investment next year.
From a low starting point, Vietnam’s infrastructure system has been improved significantly. However, quality is still a persistent issue, causing a bottleneck limiting economic development, making it necessary to focus FDI capital in this sector.
According to WEF’s Global Competitiveness Report 2017-2018, Vietnam’s infrastructural development indicator ranks 79th among 137 countries that is still considered weak despite improvements in the past many years.
Vietnam has been working to renovate the system for over 30 years and obtained several socio-economic development achievements, but there are sign of slowing growth, causing difficulties to overcome the middle-income trap. High-cost and low-efficiency investments do not attract foreign capital in key large-scale projects, which challenges the countries aims to reach sustainable economic growth.
Nguyen Van Hieu, Deputy Minister of Planning and Investment, said that the Vietnamese government determined that infrastructure development is an important task and set it among the three breakthroughs in the socio-economic development strategy for 2011-2020.
They need approximately $132 billion to meet Vietnam’s infrastructural development demand by 2030 (excluding high-speed railways), while the 2016-2020 mid-term state budget allocated VND150 trillion ($6.6 billion) for this sector.
Thereby, attracting non-state and private resources into infrastructure projects is the best choice now, especially in the form of public-private partnership.
​Thao Le
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