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North - South expressway: Cannot be put off

(VLR) (Vietnam Logistics Review) North - South Expressway- capable of high transport capacity, high speed and safety and connecting economic centers from Hanoi to HCMC, going through 20 provinces and cities - is an urgent requirement for achieving economic development targets in the current time.

(Vietnam Logistics Review) North - South Expressway- capable of high transport capacity, high speed and safety and connecting economic centers from Hanoi to HCMC, going through 20 provinces and cities - is an urgent requirement for achieving economic development targets in the current time.

On March 22nd, 2017, P.M Nguyen Xuan Phuc hosted the Government Periodical Meeting on projects of investing North- South Expressway. Then, on April 4th, 2017 the Government Office issued Announcement no.178/TB-VPCP on PM’s conclusion on projects of investing North-South Expressway.

This is an important project of national level, therefore, it should be implemented in accordance to principles, submitted to authorities for investment guideline to meet required progress. Previously on February 24th, 2017, the Government had Announcement no. 108/TB-VPCP on Deputy PM. Trinh Dinh Dung’s conclusion at the meeting preparing for the project of North - South Expressway.

Improving national competition abilities

This is one of main targets and requirements to the Project clearly stated in Announcement no.108/TB- VPCP, which derives from the reality of transport infrastructure: road infrastructure is one of bottlenecks of logistics and development. For the reason, in the years of 2014 - 2915, on the National Road 1A from Thanh Hoa to Can Tho and HCM Road through Tay Nguyen was great sites with 1,500km going through 22 provinces and cities (National Road 1A from Hanoi to Can Tho has the length of around 1,948km, going through 20 provinces and cities. Excluding already- expanded sectors and parallel expressways, the total constructed and upgraded length in 2013 - 2015 was 1,475km). When the work was under construction, around 84,000 families living along the road was affected; 5,300 families was relocated. Total expenses for the projects was VND 50,035bn, including projects of expanding National Road 1A: VND 43,404bn and project of HCM Road through Tay Nguyen: VND 6,631bn.

The National Road 1A was completed at the end of 2015, 12 earlier than the deadline given by the Assembly. Unluckily, the 4-lanes national road has experienced unpleasant things, not yet mentioning to negative issues discovered that have remarkably reduced investment efficiency. Residential areas with “a street economy” has overwhelmed the whole route.

Although Ho Chi Minh Road goes along the country’s length, its ability has not yet been shown. National Road 1A has been shouldering the burden. And North- South railway is getting outdated. Thus investing on North- South Expressway for better national competition ability becomes more urgent than ever.

More urgent than ever

In term of investment project, in the Announcement no.178/TB-VPCP, PM Nguyen Xuan Phuc required completed premise clearance on sectors in the term of 2016- 2020 and after 2020 as approved schedule. VND55,000bn from Government bonds in term of 2016- 2020 will be used to implement the projects (including expenses for premise clearance), the Ministry of Transport completes Pre-feasibility Research to submit the PM, capital mobilization should be diversified, including capital sources from the country’s commercial banks, Asia Infrastructure Investment Bank (AIIB), Governmental guarantee and issuing construction bonds… PM also agreed nominating contractors on project planning and design consulting according to regulations; the Minister of Transport will report the Politburo Committee and the Assembly about investment policies and mechanism. The choice of investors will be on the form of competing bidding on the basis of approved technical design.

In the Announcement no.108/TBVPCP, Deputy PM Trinh Dinh Dung set requirements to the projects: North- South Expressway should meet requirements of being capable of large transport capacity, high speed and safety, connecting socialeconomic centers from Hanoi to HCMC through 20 provinces and cities, connecting economic zones, industrial parks and seaports for social-economic developments on area that the expressway runs through and the whole country, reducing pressure and improving exploitation of the National Road 1A.

Recently, the Ministry of Transport has considered the construction of around 600km in the term to 2020 and of the whole route to 2025. Mr. Pham Huu Son, General Director of TEDI, said the Ministry of Transport set the target of building 1,372km of the North- South Expressway to 2020. The ministry also suggested a budget of around VND 70,000bn for support the projects in form of PPP.

However, in the medium-term investment plan, the Ministry of Transport will be able to allocate capital of VND70,000bn from the Government bond until 2020 for all projects, including that of North- South Expressway. Other projects will be put off if the whole capital is spent on the expressway project. Therefore, consulting unit has adjusted the plan: from 1, 372km to 573km to 2020 with supporting capital of VND 41,400bn from the Government. According to Son, 575km of expressway to be built will be sectors of Cao Bo (Nam Dinh)- Mai Son (Ninh Binh)- Vinh (Nghe An) and Vinh Hao- Phan Thiet (Binh Thuan)- Dau Giay (Dong Nai) with 4 lanes. Sector of Cam Lo- La Son will be invested in form of BT.

Although there has been difficulty in term of capital, the project obviously cannot be put off.

According to international and local consulting organizations, the need for cargo and passenger transport on North- South transport corridor will predictably be 45.37m passengers pa and 62.27m tons of cargo pa to 2020.

In 2020, without North- South Expressway or High-speed Railway, the demand will surpass the total ability of the current system that has been able to transport 5.92m passengers and 14.5m tons of cargo pa.

The project of North- South Expressway has the beginning point at Cao Bo intersection (the ending of Cau Gie- Ninh Binh Expressway, Y Yen, Nam Dinh province) and the ending point at Dau Giay intersection (the ending of HCMC- Long Thanh- Dau Giay Expressway, Thong Nhat, Dong Nai province) The project has the length of 1,372km, going through 16 provinces and cities: Nam Dinh, Ninh Binh, Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien- Hue, Danang, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, Binh Thuan, and Dong Nai.

The total investment for complete work, according to rough calculation, will be VND 312, 435bn. VND 243.312 bn for the 1st phase (2017- 2025) and VND 69.123 bn for the 2nd phase (after 2025).

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