5 million USD for 1 km of North-South Expressway
The Ministry of Transport calculated the investment cost for each kilometer of the 4-lane North-South Expressway at 115 billion VND (about 5 million USD), lower than the average investment cost of the Ministry of Construction.
Thus, excluding site clearance costs, the investment cost per kilometer of the North-South Expressway is 115 billion VND (about 5 million USD).
Mr. Pham Huu Son - General Director of Transport Engineering Consulting Corporation (Tedi - project consultant) said that the average investment of 5 million USD includes the cost of investing in the construction of bridges, tunnels, weak ground treatment and intelligent traffic systems (ITS), non-stop electronic toll collection, and residential access roads.
"This investment rate is appropriate, lower than the investment rate for highways in some countries in the region. Several years ago, some foreign consulting units came to Vietnam to survey and calculate the investment rate for the North-South highway at 6-8 million USD per km," said Mr. Pham Huu Son.
According to the data published by the Ministry of Construction, the investment cost for the construction of a 4-lane highway in Region 2 (Central and Central Highlands) is 157 billion VND per km, and in Region 3 (Southern provinces) is 192 billion VND. The investment cost includes the cost of building bridges, tunnels and treating weak soil. For projects with particularly difficult terrain conditions, calculations, adjustments and supplements are needed. Thus, compared to the announcement of the Ministry of Construction, the investment cost for the North-South highway in Region 2 and Region 3 is lower.
Mr. Pham Huu Son also said that this is the average investment rate calculated for 11 highway projects, and each project has regional characteristics so the total investment capital is different.
For example, the Nghi Son - Dien Chau and Dien Chau - Bai Vot expressway projects, although both have a length of about 50 km, the total investment cost of the Dien Chau - Bai Vot section is 5,000 billion VND larger than that of the Nghi Son - Dien Chau section. The reason is that the Dien Chau - Bai Vot section has many large projects such as the 1.2 km long Than Vu tunnel, the 4 km long Hung Duc bridge over Lam river and the volume of soft soil treatment is larger. Similarly, the My Thuan 2 bridge has an investment rate of up to 756 billion VND/km, much larger than the road project.
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| The Da Nang - Quang Ngai Expressway will connect with the North - South Expressway. Photo: Dac Thanh. |
Among the 11 expressway projects, the Phan Thiet - Dau Giay project with a scale of 4 lanes is quite similar to the reference of the Ministry of Construction. This project has an investment rate of 145 billion VND/km including the cost of site clearance, loan interest, and contingency, which is smaller than the cost announced by the Ministry of Construction of 192 billion VND (expressway region 3).
"We have surveyed and researched the terrain of each project to arrange bridges, service roads, intersections, as well as construction organization plans to ensure construction quality and investment feasibility," Mr. Pham Huu Son affirmed.
According to Mr. Son, the total investment is calculated for projects invested in the form of PPP. Recently, the National Assembly Standing Committee allowed the conversion of 3 expressway projects to the form of public investment, which will help reduce loan interest costs and shorten implementation time.
Regarding the investment appraisal of the North-South Expressway, Mr. Nguyen Viet Huy - Deputy Director of the Department of Public-Private Partnership (Ministry of Transport) said that according to the process of preparing the feasibility report of the North-South Expressway, after the consulting unit calculated the project costs, the Ministry of Transport hired an independent consulting unit to review these results. The specialized agencies of the Ministry re-evaluated the consulting unit's documents based on the appraisal results of the independent consultant, referring to the unit price standards of materials and equipment of the Ministry of Construction and localities, then submitted them to the Ministry of Transport for approval.
After the competent authorities have made an investment decision, the expressway project will be technically designed and have a more specific budget. Records of all steps will be kept for future inspection and audit. "The investment costs of expressway projects are calculated by all parties in accordance with regulations, there is no such thing as increased costs, to avoid loss and waste," Mr. Nguyen Viet Huy affirmed.
On the expert side, Dr. Le Dang Doanh - former Director of the Central Institute for Economic Management, commented that the most important thing is the quality of the project. A project with low investment may not bring high quality, so low cost cannot be used as a criterion.
However, according to Mr. Doanh, the North-South Expressway projects have large capital, so the calculation of the total investment must be closely examined and monitored by specialized agencies, openly and transparently. At the same time, the Government should establish an independent monitoring board to monitor the implementation of the investor, the Ministry of Transport, or PPP investment enterprises.
The North-South Expressway project is an important national priority investment project in the 2017-2020 period, including 3 public investment projects: Cao Bo - Mai Son, Cam Lo - La Son, and My Thuan 2 Bridge.
The 8 projects calling for PPP are Mai Son - National Highway 45, National Highway 45 - Nghi Son, Nghi Son - Dien Chau, Dien Chau - Bai Vot, Nha Trang - Cam Lam, Cam Lam - Vinh Hao, Vinh Hao - Phan Thiet, Phan Thiet - Dong Nai.
In May, the Government proposed to the competent authority to allow the conversion of the investment form of 8 North-South Expressway projects to public investment. Recently, the National Assembly Standing Committee approved the policy of converting 3 projects to public investment.