Find the solution to the goal of 5,000 km of highway

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Photo: Investor

At the recent Government meeting on the North-South expressway project, Prime Minister Pham Minh Chinh requested the Ministry of Transport to urgently complete a report to the Politburo on the policy of implementing the target. “By 2030, strive to have about 5,000 km of highways nationwide” and the investment policy of the North-South expressway project for this period.

The goal is clear, the necessity is not to be discussed, however, to mobilize resources to realize the above goal – according to many traffic experts – is not simple, if not a difficult problem in the current period.

The Northern region will invest in completing 3 routes 363 km long (Moc Chau-Son La, Phu Tho-Cho Ben, Ring Road 5 of Hanoi). The Central and Central Highlands regions have invested in completing 3 routes with a length of 299 km (Vinh-Thanh Thuy, Quy Nhon-Pleiku, Bao Loc-Lien Khuong).

The southern region invests in completing 2 routes 170 km long (Belt 4 of Ho Chi Minh City and Go Dau-Xa Mat). The Mekong Delta region has completed two 207 km long routes (Ha Tien-Rach Gia and Hong Ngu-Tra Vinh).

The report of the Ministry of Transport shows that, in order to achieve the target of about 5,000 km by 2030, in addition to completing 1,176 km of construction in the period 2021-2025, it is necessary to invest in completing at least 874 km of roads. Highway.

Accordingly, to ensure the achievement of this goal, the Government has developed plans and objectives in each medium-term period as the basis for balancing resources and organizing the implementation. In addition, based on the needs of economic development and the ability to balance resources, it will call for investment in some more expressways in the Central region, Central Highlands and Mekong River Delta.

Regarding the financial plan, a representative of the Public-Private Partnership (PPP) Department of the Ministry of Transport said that the capital need to implement highway projects in the medium term period 2021-2025 needs about 350,936 billion VND, in which the State budget is about 219,523 billion VND, the capital mobilized from outside the budget is about 131,413 billion VND.

For the State budget, the Government has assigned localities to balance sources, presided over the implementation of VND 37,168 billion, the central budget needs to arrange VND 182,355 billion, of which VND 138,000 billion has been balanced, and about VND 44,355 billion is missing.

Meanwhile, the capital demand for the implementation of expressway projects in the medium term 2026-2030 is about 395,670 billion VND, including: State budget 209,164 billion VND, mobilized from outside budget 186,506 billion VND.

Looking at the capital structure, it can be seen that the budget capital to spend is very large. Responding to this issue, a representative of the PPP Department said that the State will use resources allocated by the State according to medium-term public investment, balance additional revenue from excess revenue, reserve for public investment, and balance capital from local budget.

At the same time, use toll revenues on state-invested highways, ODA grants and concessional loans for investment and competent agencies to consider increasing the proportion of budget capital for the field of investment in transport infrastructure in the coming period.

Another problem that also needs to be solved is the mobilization of private resources. The reality of attracting private investment in transport infrastructure development over the past time shows that there are many shortcomings, from policies and commitments from the State to credit capital. This makes private investors less interested in being invited to participate in traffic projects.

At the same time, use toll revenues on state-invested highways, ODA grants and concessional loans for investment and competent agencies to consider increasing the proportion of budget capital for the field of investment in transport infrastructure in the coming period.

Sharing about this issue, Assoc. Tran Chung, Chairman of the Vietnam Association of Road Traffic Construction Investors (VARSI), said that many investors have sent petitions to the Association that they have completed the project to meet or exceed the schedule. capital does not increase, ensuring the quality of the work as committed in the project contract, but the management agency does not provide timely and sufficient capital as promised, or unilaterally fails to fulfill commitments such as reducing toll stations, not implementing a roadmap to increase fees and affect the financial plan of the project.

“The consequence is that BOT investors are discouraged and are not excited to participate in BOT projects”, Assoc. Tran Chung shared.

Regarding credit capital, Mr. Tran Van The, Vice Chairman of VARSI Association, said that in reality, many banks resolutely “shake their heads” and say no to loans to implement traffic BOT projects.

“If we determine the priority to attract the private sector to invest in infrastructure, then there should be accompanying policies to create capital,” said Mr. Tran Van The.

In this regard, in order to alleviate financial pressure on investors, the Ministry of Transport proposes the Government to form a credit package to support loans for ppp investment transport projects and to add highway projects to the subjects of concessional credit loans as prescribed in Decree 32/2017 on state investment credit and expansion for some joint-stock commercial banks.

In addition, the competent authority needs to promulgate a number of mechanisms and policies to implement such as, raising the level of State capital participating in PPP projects to over 50% of the total project investment (PPP Law stipulates that the capital of the State does not exceed 50%); combine the use of central and local budgets… to ensure feasibility in implementation.

In the medium term of 2021-2025, the Government is directing to focus on mobilizing investment resources to complete 871 km of highway so that by 2025, the country has about 2,950 km of highways and strives to start a new construction of about 1,176 km.

Specifically, a number of component projects on the east North-South expressway (375 km completed, 387 km started); In the northern region, two 74-km long routes (Huu Nghi Border Gate-Lang Son City, Cho Moi-Bac Kan) will be put into operation and four 337-km-long expressways (Ring 4, Hanoi and Hoa) will be put into operation. Binh-Moc Chau, Dong Dang-Tra Linh, the route connecting Ha Giang with Noi Bai-Lao Cai highway).

For the Central and Central Highlands regions, in the 2021-2025 period, two 139 km long highways will be completed (Hoa Lien-Tuy Loan, Dau Giay-Tan Phu-Bao Loc) and the Buon Ma Thuot expressway will begin construction. -Van Phong is 105 km long.

The southern region has completed two highways of 147 km long (Bien Hoa-Vung Tau, Chon Thanh-Duc Hoa) and started three new routes of 194 kilometers long (Ring 3 Ho Chi Minh City, Ho Chi Minh City-Moc Bai, Ho Chi Minh City-Chon Thanh) ).

The Mekong Delta region has completed 3 routes of 136 km long (My An-Cao Lanh, Cao Lanh-Rach Soi, An Huu-Cao Lanh) and started construction of two 153-km highways (Chau Doc-Can Tho, Soc Trang-Tran De).

Source: – Translated by