High cost a concern for southern expressway project

News - A project to build an expressway linking the central beach cities of Phan Thiet and Nha Trang has been mapped out, but the project management unit has said it worries about the estimated cost totaling US$2 billion.

The 235-kilometer road will start at Dien Khanh District in Khanh Hoa and link up to the upcoming Dau Giay-Phan Thiet expressway, according to the project drawn up by a consortium of two local consulting firms, namely Construction Survey-Design and Consultancy Co. and a unit of Cienco 8.

The six-lane expressway will pass through three provinces –  Khanh Hoa, Ninh Thuan and Binh Thuan, and allow for vehicles to travel at a maximum speed of 120 kilometers per hour.

Project Management Unit 6 (PMU 6) under the Ministry of Transport, which has been named manager of the expressway, said the most important factor is how to mobilize such a huge amount of capital for the project.

PMU6 has worked with the consultants to find the best way of attracting funds from international donors and other sources.

With such a huge cost, the transport ministry will likely ask the National Assembly for permission to develop the expressway. An official the ministry is concerned that it will take a long time to prepare for administrative formalities while it is not easy to seek international loans for the project.

The expressway will be part of the north-south expressway whose several sections between Dau Giay in Dong Nai Province and Can Tho City are under construction. The new expressway, once in place in 2020, will create a complete expressway route stretching from HCMC to Nha Trang City, passing through most economic hubs and key air, rail, sea transport routes in the southern and south central regions.

Major funding sources for developing big-ticket infrastructure projects in Vietnam now include the State budget, international donors and private funds under the public-private partnership (PPP) format.

The transport ministry encourages investors to take part in infrastructure projects under PPP form to help cope with financial constraints faced by the public sector. However, Vietnam has not completed a legal framework for applying this investment method. Only Dau Giay-Phan Thiet and Danang-Quang Ngai roads have received the green light from the Government to apply the PPP format.

Consultants have also proposed a solution to separating the Nha Trang-Phan Thiet into two sections – Phan Thiet-Ninh Thuan and Ninh Thuan-Nha Trang. However, transport experts have questioned the viability of such a plan, saying if the expressway is divided into two smaller projects, it will then take a longer time while it is urgent to complete the HCMC-Nha Trang expressway to boost tourism and the economy as a whole.

Last year, the transport ministry finished a scheme for building the 1,811-kilometer expressway between Hanoi and Can Tho City in the Mekong Delta. The north-south expressway requires a total investment of US$16.9 billion.