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Vietnam Today

36 foreign investors bid for construction of North-South Expressway

Released at: 15:31, 11/07/2019

36 foreign investors bid for construction of North-South Expressway

Photo: Viet Tuan

Seven projects attract 36 submissions from foreign companies, mostly South Korean and Chinese.

by Jessica Nguyen

The Project Management Unit under the Ministry of Transport organized a pre-selection bid process that closed on July 10 to select investors for seven of eight North-South Expressway projects in the form of public-private partnerships (PPPs).

The projects are the expressway from Mai Son district in northern Ninh Binh province to National Highway No. 45 in north-central Thanh Hoa province; the highway from National Highway No. 45 to Nghi Son district in Thanh Hoa province; the highway from Nghi Son to Dien Chau district in north-central Nghe An province; the expressway from Dien Chau to Bai Vot district in north-central Ha Tinh province; the highway from Nha Trang city to Cam Lam district in south-central Khanh Hoa province; the expressway from Cam Lam to Vinh Hao district in south-central Binh Thuan province; and the highway from Vinh Hao to Phan Thiet district in Binh Thuan province. The highway from Phan Thiet to Dau Giay in southern Dong Nai province is not yet open for bidding.

There were 51 submissions from domestic and foreign investors in the pre-selection round, of which 36 were from South Korea and China and only two from France. Some investors bid for different projects, with China Harbour Engineering Co. Ltd.  bidding for the Nghi Son - Dien Chau and Dien Chau - Bai Vot highways.

The Daewoo Engineering and Construction Co. counts among the South Korean investors, which built the Daeha commercial and office building in Hanoi; Lotte Engineering and Construction Co., which built the Lotte commercial building in Hanoi and has part of a package in the Da Nang - Quang Ngai Highway; and Hyundai Engineering and Construction Co., which has built many highways and high-speed railways in its home country.

The China Railway Construction Corporation Limited (the parent company of China Railway 6 Co., which is the general contractor for the Cat Linh - Ha Dong metro line), and the China Bridge and Road Group, which has been involved in many projects in China and elsewhere, have also made submissions.

According to a representative of the Project Management Board, many enterprises and joint ventures made submissions for the North-South Expressway. This confirms investor interest in Vietnam’s transport infrastructure and also makes the projects more competitive. In the next 30 days, the Project Management Board will score prequalification records according to published criteria.

“We will ensure accuracy when marking these company’s submissions, then publish the results,” the representative said. “These enterprises will also be assessed by local authorities before being officially appointed.”

Each highway project will select a maximum of five investors to enter the bidding round, calculated on a scale from high to low. The list of investors chosen through the selection process will be submitted to the Ministry of Transport for evaluation and approval within 20 days.

According to the Ministry’s plan, after obtaining the pre-qualification results, the bidding process will start in October, with bid evaluation and a declaration of results slated for March 2020, and negotiations and the signing of contracts taking place in April.

Foreign investors will invest their own capital and be responsible for the construction and operation of projects in the form of build-operate-transfer (BOT). Tolls are set in a bracket and depend on the route. After the lifespan of each BOT project, the investor then hands over the highways and expressways to Vietnamese management agencies.

The Vietnamese Government will invest VND40.3 trillion ($1.74 billion) in site clearance and residential resettlement for the eight projects. Localities will level the ground and hand over clean land to investors. The estimated total investment for the eight projects is some VND104 trillion ($4.48 billion).

The Ministry previously announced investment in eleven North-South Expressway projects with a total length of 654km, passing through 13 cities and provinces, including three projects funded by the State budget and eight in the form of PPPs and BOT contracts.

International bids for the current eight PPP projects were first called for in May. Two international transaction consultants - Deloitte and Ernst & Young - helped the Ministry in reviewing the financial structure of the projects and developing pre-qualification invitation documents, bidding documents, and draft contracts.

The Ministry said the criteria for selecting pre-qualification investors have been carefully studied, comply with Vietnamese law, and are in accordance with international practices, ensuring fairness, competition, and transparency.

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