North-South Expressay: Vietnam lowers criteria for local investors

The Transport Ministry has opened a new evaluation round for local investors forthe North-South Expressway after lowering the experience and capital criteria.

A local investor should have participated in a project whose valueis at least 20 percent of a subproject of the North-South Expressway, said Nguyen Viet Huy, deputy head of the ministry’s Public-Private Partnership (PPP)Department. 

For a consortium of investors, the ministry has scrapped aregulation that each investor should contribute at least 15 percent of theconsortium’s capital.

However, the main investor of each consortium would still have toaccount for at least 30 percent of the consortium’s capital. A consortium musthave five investors at the most.

A local investor with foreign ownership of less than 51 percentcan invest in the project. This regulation seeks to attract more investors.

In case there is no suitable investor, the ministry will make aproposal to the government to switch to public investment, Huy said.

In September, the ministry had decided not to inviteforeign bids for the eight subprojects of the expressway to bebuilt under the PPP model, saying only a few qualified and this could lead to alow level of competition.

The switch to local investors could prolong thetendering process by three months toNovember 2020 as the ministry has to carry out new preliminary evaluations ofinvestors before they can bid, it said in a recent report to the NationalAssembly.

The evaluations are expected to be completed by next February, thecontractor identified by August, and the tendering process completed byNovember, the report said.

Eleven subprojects of the transnational expressway, prioritizedfor this year, cost a total of VND118.72 trillion ($5.12 billion), of whichVND55 trillion ($2.37 billion) will come from the government, and the rest fromcommercial loans, mainly from domestic banks.

Three sections will be publicly funded and eight are to be builtunder the PPP model. Work on the first of the state-funded sections beganearlier this month, while work on the eight PPP sections could begin nextApril, the ministry has said.

The 11 sections will run 654 kilometers between northern Nam DinhProvince near Hanoi and Vinh Long Province to the southwest of Ho Chi MinhCity.

The expressway will have a total length of more than 2,000kilometers, and its estimated completion date is in 2025.

Source: VN Express