Chinese companies have dominated the bidding for the first half of Vietnam’s North-South Expressway, a public-private project that will run for 1,941km from Hanoi to Can Tho in the Mekong Delta.
Sixty companies entered bids before the 10 July deadline. Of these, 30 are Chinese, 15 are from Korea, France and the Philippines and 15 are Vietnamese. At stake are the first eight sections of the 16 section scheme.
The eight sections run for 530km between Son La Province in the north and Binh Thuan Province near Ho Chi Minh City. Their total cost is expected to be between $4.3bn and $5.1bn, of around $2bn will come from the government.
The VN Express newspaper reports that the most prominent Chinese investor is China Railway Construction Group and its subsidiaries, such as China Railway Construction Investment Group and China Railway 21st Bureau Group. They have partnered with Vietnamese enterprises and have submitted bids for seven out of the eight sections.
Other Chinese outfits to enter the race include China Port Mechanical Company, China Bridge and Road Corporation and Yunnan Investment and Construction Group.
A number of Japanese and European companies had expressed interest in the project, but in the event only the French have decided to press ahead.
A source in the Vietnamese Ministry of Transport told the VN Express newspaper that the Chinese bidders were capable of raising capital at interest rates of less than 2%, which made them less dependent on government guarantees on minimum toll revenue.
Preconstruction work on the project has been under way since February. The evaluation and negotiation process is expected to begin in August, with contracts signed in April 2020.
It is estimated that Vietnam needs to spend about $480bn in the next year to prevent lack of infrastructure restricting the country’s vigorous economic growth, but it is thought that the state budget can only meet one third of that cost.
Image: Route 1: the main trans-Vietnam artery (BÃ¬nh Giang/Public domain)