Consider adjusting investment policy for some sections of North-South expressway

The report on adjusting the investment policy of the Project to build some sections of the North-South Expressway in the East in the period of 2017-2020 presented by Minister of Transport Nguyen Van The said that compared to the time when the National Assembly considered and decided on the investment policy, the current context has arisen a number of factors that directly affect the feasibility of implementing investment component projects under the PPP form.

Specifically, according to the provisions of the Law on Bidding, investment projects under the form of PPP will have to bid internationally to select investors. International bidding will solve the difficulty of long-term domestic credit, ensuring investment capital. However, the international pre-qualification process has shown factors affecting national defense and security. Based on the conclusion of the competent authority, the Government has decided to switch to open domestic bidding, so the initial goal of international bidding to mobilize foreign capital has not been achieved.

Nghe An was commended for its work in clearing land for the North-South Expressway.

(Baonghean.vn) - Nghe An is currently one of the provinces with the highest progress in land clearance among the provinces with the North-South Expressway passing through.

At the same time, during the period of submitting investment policies to the National Assembly for consideration (2017), the issue that National Assembly deputies were concerned about was the increasingly tight ratio of short-term mobilization for medium- and long-term lending at commercial banks, leading to difficulties in mobilizing domestic credit.

In the current context, mobilizing credit for projects has created new factors, such as incomplete legal policies on PPP, and risk sharing mechanisms that have not been applied, thus posing many risks to domestic investors and credit institutions.

The decline in revenue at many BOT transport projects in recent times has demonstrated the risks that investors and credit institutions have to bear entirely due to the lack of a risk-sharing mechanism, which has led to many projects having to change debt groups, restructure debts and put considerable pressure on the banking system. On the other hand, the multifaceted impact of the COVID-19 pandemic has affected the long-term lending limits of credit institutions.

To cope with the impact of the COVID-19 pandemic, in addition to drastic solutions on epidemic prevention, the Government focuses on solutions to remove difficulties, promote disbursement of public investment capital and accelerate the completion of key projects to promote economic growth during the pandemic and support the spread of socio-economic development in the long term.

According to Minister Nguyen Van The, based on the principle of selecting component projects to convert to public investment. The Government's viewpoint when selecting a number of component projects to convert to public investment must ensure consistency with the conclusions of the Politburo and the National Assembly Standing Committee.

Illustration photo.

With the proposal of investment form adjustment options, the Government has developed investment form adjustment options in the following order of priority: Option 1 - Convert all 8 projects to public investment. Option 2 - Convert 5 projects to public investment, including 4 urgent projects (Mai Son - National Highway 45, National Highway 45 - Nghi Son, Nghi Son - Dien Chau and Phan Thiet - Dau Giay sections) and 1 project without pre-qualified investors (Vinh Hao - Phan Thiet section); The remaining 3 component projects continue to invest in the form of PPP. Option 3 - Convert 3 projects to public investment, including: 2 urgent projects (Mai Son - National Highway 45 and Phan Thiet - Dau Giay sections) and 1 project without pre-qualified investors (Vinh Hao - Phan Thiet section); The remaining 5 component projects continue to invest in the form of PPP.

Regarding the options, the Examination Report presented by Chairman of the National Assembly's Economic Committee Vu Hong Thanh said that for Option 1, the National Assembly Standing Committee concluded that it did not agree with this Option at the 45th Session.

Option 2, the Standing Committee of the Economic Committee finds that this option is also not suitable for the requirements in the Conclusion of the Standing Committee of the National Assembly, which only proposes to convert to the form of investment using 100% public investment capital for projects without investors passing the pre-qualification round (Vinh Hao - Phan Thiet section) and a few projects with investors passing the pre-qualification round but the possibility of unsuccessful bidding; public investment capital for the Project must be implemented in accordance with the provisions of the Law on Public Investment and Resolution 52/2017/QH14 of the National Assembly, not allocating additional large amounts of public investment capital for the Project to the Public Investment Plan for the next period (2021 - 2025).

Regarding Option 3, Mr. Vu Hong Thanh said that the first type of opinion is: To support economic growth, the majority of opinions basically agree with the option of converting a maximum of 3 component projects from investment under the PPP method to investment using 100% public investment capital (including the Vinh Hao - Phan Thiet project, a project without investors passing the pre-qualification round). This option can minimize the negative impact of canceling the pre-qualification results, while meeting the requirement of converting "a small number of projects" of the National Assembly Standing Committee at the conclusion of the 45th session (phase 2).

However, opinions disagreed with the selection of Mai Son - National Highway 45 project and Phan Thiet - Dau Giay project for conversion because the above 2 projects have very little state capital participation but still have 2 to 3 investors passing the preliminary round, these are also 02 projects with the highest traffic demand out of 08 projects, located at the gateway to the country's major economic centers, conveniently connected to existing highways, can be effective immediately.

The second type of opinion is: Some opinions do not agree with the conversion from the PPP method to investment using 100% public investment capital.

The third type of opinion is: There are opinions agreeing with the number and selection of component projects of Option 3 proposed by the Government and thinking that the selection of Mai Son - National Highway 45 project and Phan Thiet - Dau Giay project is appropriate because these two projects have large mobilized capital, investors can hardly mobilize credit capital at the present time.

Mr. Vu Hong Thanh emphasized that the majority of the Standing Committee of the Economic Committee agreed with the first type of opinion. Accordingly, only a maximum of 3 component projects should be converted, and at the same time, it was suggested to consider choosing the priority order of converted projects according to the principles stated by the Standing Committee of the National Assembly at the 45th Session.

After listening to the opinions, discussions and conclusions on this content, Vice Chairman of the National Assembly Phung Quoc Hien emphasized that, based on the Government's Proposal, the Economic Committee's review report, the National Assembly Standing Committee agreed to only convert projects without investors, namely the Vinh Hao - Phan Thiet project, and select two projects that are considered the most important to solve urgent traffic problems and handle current traffic development issues.

Therefore, the National Assembly Standing Committee agreed with the Government's third option, which is that in addition to the Vinh Hao - Phan Thiet project, there will be two more projects, Mai Son - National Highway 45 and Phan Thiet - Dau Giay, which will use the State budget for investment.

Vice Chairman of the National Assembly Phung Quoc Hien suggested that the Government re-submit the Report with a view to choosing a unified option instead of including all three options. Projects when converted to public investment must still carry out bidding procedures according to regulations. According to the Law on Public Asset Management, all State investments must collect fees to recover capital invested by the State. On that basis, the National Assembly's Economic Committee will re-examine the Report to submit to the National Assembly for consideration and approval at this 9th session of the National Assembly./.