Illustrative image (Photo: VNA)Hanoi (VNS/VNA) - The Ministry of Transport has announced that they would cancel open international biddingfor eight projects of the North-South expressway, in favour of domestic investors.
Thedecision was made on the consensus reached after consulting relevantagencies, the transport ministry said in an announcement sent to the media, addingthat it would adjust pre-qualification bidding invitations to bettersuit open domestic bids for eight public-private-partnership(PPP) projects for the eastern section of the trans-Vietnam highway.
Theministry's project management boards had received 60 applications as ofthe end of July, two months after the international bidding invitation.
Four ofthe projects did not have investors that passed the prequalificationrequirements; two projects had only one; one projecthad two; and one project had three, according to the report madeby the procuring entity and State agencies.
“Thenumber of investors passing this stage was not high, leading to alack of competition,” the ministry said.
As aresult, the projects for the eastern section of the North-South Expresswayare being re-examined to take into account global and regional disputesand national security concerns, as well as the empowerment ofdomestic enterprises.
Domesticinvestors, according to the ministry, are fully capable of implementingconstruction sub-projects for the expressway project.
However,experts have pointed out that Vietnamese investors face majorchallenges because of financial limitations, whichwould require them to seek alliances (in the form of joint-ventures)to pass the prequalification stage.
NguyenDanh Huy, general director of the ministry's Public-PrivatePartnership (PPP) Investment Project Management Department, toldVietnam News Agency that the criteria for investors would remain unchanged andwould be in line on the Law on Bidding.
Domesticinvestors have been asked to meet the minimum standards specifiedby the law and Government Decree No. 20, and to have equitycapital that reaches 20 percent of the total costs. Or, the investorcould have total capital that is equal to at least 50 percent of thetotal investment for the project under construction.
“Investorswho satisfy all the requirements can attend the prequalification forthe eastern section project for the North-South Expressway,” Huysaid.
Regardingthe criteria for having "at least 50 percent of the totalinvestment for a project under construction”, Huy said investors couldform a joint-venture with another investor.
“Theministry will meet with related ministries and agencies soon to discussthe issue. The plan is to hold another prequalification in October andresults are expected to be released by 2020,” he added.
Dang Dai,deputy head of the Vietnam Association of Financial Investors, said thatdomestic investors have the appropriate capacity and the constructiontechniques to carry out the project.
“Domesticinvestors only need to pay attention to the capital for eight easternsections in which the State commits to ensure 30 percent of the totalinvestment capital. Therefore, investors are responsible for 20 percent, so therest can be mobilised from loans. Domestic investors definitely can fund the 20percent. For technical issues, many of them have carried out expressway,bridge and tunnel projects, which have shown their capability,” Dai said.
Transportexpert Nguyen Xuan Thuy said that domestic investors should be given priorityfor the key national projects like the North-South Expressway to ensure qualityand reduce costs.
“Only afew international investors joined the bidding because they may havenot met the criteria or they were concerned about issues relatedto procedures, capital, interest, and other matters. Also, the projectmight not be attractive enough for them,” said Thuy.
Sincedomestic investors would likely face financial challenges, herecommended that they cooperate with others.
“LargeVietnamese corporations such as Vingroup, Sun Group and T&T canwork with road construction companies to havesufficient financial resources and at the same time meetstandards related to experience," Thuy said.
Theeastern section of the expressway will be 654km long and have totalinvestment of 118.7 trillion VND (5.11 billion USD), including 55 trillion VND (2.36 billion USD) allocated from the State budget.
It willrun through 13 provinces and cities from the northern province of Nam Dinh tothe southern province of Vinh Long.
Thehighway is divided into 11 sub-projects, including eight under PPPinvestment form./.
Thedecision was made on the consensus reached after consulting relevantagencies, the transport ministry said in an announcement sent to the media, addingthat it would adjust pre-qualification bidding invitations to bettersuit open domestic bids for eight public-private-partnership(PPP) projects for the eastern section of the trans-Vietnam highway.
Theministry's project management boards had received 60 applications as ofthe end of July, two months after the international bidding invitation.
Four ofthe projects did not have investors that passed the prequalificationrequirements; two projects had only one; one projecthad two; and one project had three, according to the report madeby the procuring entity and State agencies.
“Thenumber of investors passing this stage was not high, leading to alack of competition,” the ministry said.
As aresult, the projects for the eastern section of the North-South Expresswayare being re-examined to take into account global and regional disputesand national security concerns, as well as the empowerment ofdomestic enterprises.
Domesticinvestors, according to the ministry, are fully capable of implementingconstruction sub-projects for the expressway project.
However,experts have pointed out that Vietnamese investors face majorchallenges because of financial limitations, whichwould require them to seek alliances (in the form of joint-ventures)to pass the prequalification stage.
NguyenDanh Huy, general director of the ministry's Public-PrivatePartnership (PPP) Investment Project Management Department, toldVietnam News Agency that the criteria for investors would remain unchanged andwould be in line on the Law on Bidding.
Domesticinvestors have been asked to meet the minimum standards specifiedby the law and Government Decree No. 20, and to have equitycapital that reaches 20 percent of the total costs. Or, the investorcould have total capital that is equal to at least 50 percent of thetotal investment for the project under construction.
“Investorswho satisfy all the requirements can attend the prequalification forthe eastern section project for the North-South Expressway,” Huysaid.
Regardingthe criteria for having "at least 50 percent of the totalinvestment for a project under construction”, Huy said investors couldform a joint-venture with another investor.
“Theministry will meet with related ministries and agencies soon to discussthe issue. The plan is to hold another prequalification in October andresults are expected to be released by 2020,” he added.
Dang Dai,deputy head of the Vietnam Association of Financial Investors, said thatdomestic investors have the appropriate capacity and the constructiontechniques to carry out the project.
“Domesticinvestors only need to pay attention to the capital for eight easternsections in which the State commits to ensure 30 percent of the totalinvestment capital. Therefore, investors are responsible for 20 percent, so therest can be mobilised from loans. Domestic investors definitely can fund the 20percent. For technical issues, many of them have carried out expressway,bridge and tunnel projects, which have shown their capability,” Dai said.
Transportexpert Nguyen Xuan Thuy said that domestic investors should be given priorityfor the key national projects like the North-South Expressway to ensure qualityand reduce costs.
“Only afew international investors joined the bidding because they may havenot met the criteria or they were concerned about issues relatedto procedures, capital, interest, and other matters. Also, the projectmight not be attractive enough for them,” said Thuy.
Sincedomestic investors would likely face financial challenges, herecommended that they cooperate with others.
“LargeVietnamese corporations such as Vingroup, Sun Group and T&T canwork with road construction companies to havesufficient financial resources and at the same time meetstandards related to experience," Thuy said.
Theeastern section of the expressway will be 654km long and have totalinvestment of 118.7 trillion VND (5.11 billion USD), including 55 trillion VND (2.36 billion USD) allocated from the State budget.
It willrun through 13 provinces and cities from the northern province of Nam Dinh tothe southern province of Vinh Long.
Thehighway is divided into 11 sub-projects, including eight under PPPinvestment form./.
VNA
