HCMC-Tay Ninh Expressway awaits approval

The build-operate-transfer (BOT) project to construct the Ho Chi Minh City-Moc Bai Expressway in Tay Ninh province was planned and approved. 

The total investment capital for the project was to be around VND9,763 bn, of which the support capital of VND2,300 bn would come from the Ho Chi Minh City budget, while about VND1,000 bn was to come from the Tay Ninh province budget.

However, now the Department of Planning and Investment believes that the capital source for the project has increased substantially and the current public investment plan is not in balance with the Ho Chi Minh City development plans for the 2021 to 2025 period.


Balancing budgets

Authorities and leaders in Ho Chi Minh City and Tay Ninh province have determined that investing in the construction of the Ho Chi Minh City-Moc Bai Expressway is extremely urgent in order to facilitate the circulation of goods and travel from the central economic zones of the Southern Key Economic Zone area, and for linking with seaports and the whole ASEAN region. The whole route covers a length of 50 kms, which passes through Ho Chi Minh City for over 26 kms with eight lanes, and goes through Tay Ninh province over a distance of more than 23 kms with six lanes. Therefore, finding and balancing the budgets to accelerate the project is now very urgent.

Recently, the Department of Planning and Investment sent a report to the People's Committee of Ho Chi Minh City on investment methods as well as some recommendations to speed up the project progress. According to calculations, the preliminary total investment in Phase 1 of the project will be VND15,900 bn. In this, construction cost will come to VND5,417 bn; management, consulting, and loan interest expenses will be around VND 1,836 bn; cost of compensation and support for site clearance and resettlement is expected at VND7,433 bn, with Ho Chi Minh City giving VND 5,901 bn and Tay Ninh province giving VND1,532 bn; and contingency costs are expected to be around VND1,214 bn.

The Department of Planning and Investment recommends Phase 1 of the project under the method of build-operate-transfer (BOT). In this, the State supports the cost of compensation and site clearance from the budgets of the two localities. The rest of the capital comes from the investor, and this cost is collected by the investor under the contract.

Regarding compensation, site clearance and resettlement support, Ho Chi Minh City has agreed with the People's Committee of Tay Ninh province to report to the Prime Minister to divide two projects into compensation, site clearance, support and resettlement through each local area. In addition, during the process of the interdisciplinary appraisal council, the People's Committee of Ho Chi Minh City will direct the Department of Planning and Investment and other departments and sectors to coordinate in appraising the capital source and the ability to balance the City's budget capital to participate in the project according to the requirements of the project.

According to the plan, the Ho Chi Minh City-Moc Bai Expressway project will start construction in 2023 and be completed by 2025. Currently, Tay Ninh province is waiting for Ho Chi Minh City to submit to the People's Council an investment policy proposal. After the People's Council of Ho Chi Minh City gives its approval, the two localities will carry out the next procedures with the aim of starting the project as planned. According to information from the Department of Transport of Tay Ninh province, all compensation costs will be covered by the local budget. Currently, the compensation budget for site clearance is very large, but for the common goal of contributing to socio-economic development, Tay Ninh province and Ho Chi Minh City will jointly try to balance the budgets.

According to the Department of Transport of Ho Chi Minh City, the Department of Planning and Investment is currently making plans and reporting to the People's Committee of Ho Chi Minh City to prepare to submit to the City Council. After the City Council agrees and approves, the next steps will be carried out. The Ho Chi Minh City Department of Transport added that in this project, the BOT construction and installation part is expected to payback. The site clearance part will be funded by the localities, appraised, then a pre-feasibility study report will be made and submitted to the investment policy makers.

Priority project

Currently, the Department of Planning and Investment has proposed to the People's Committee of Ho Chi Minh City to report to the City Council on the urgency of the project. Accordingly, the project is being invested to meet travel and freight demand, and reduce the load for National Highway 22 Trans-Asia Expressway, connecting economic centers, border-gate economic zones, urban centers of the Southern key economic region with the hubs of seaports and international airports of the region and the ASEAN economic region. Seeing the advantages of highways that have been invested and built in the region, this project will contribute to improving the quality of transport infrastructure, create a breakthrough for the region's socio-economic development, and ensure safety, security and defense.

In addition, the Ho Chi Minh City-Moc Bai expressway will develop traffic infrastructure, facilitate the exploitation of land fund for urban development along the route and suitable and effective services and industrial zones. Recently at an online meeting of the Minister of Transport, Mr. Nguyen Van The, with the Southern localities on the implementation of a number of projects in the South, the Minister proposed that the People's Committee of Ho Chi Minh City and Tay Ninh province coordinate and complete the procedures to submit to the Prime Minister for consideration and decision on investment policy of the Ho Chi Minh City-Moc Bai expressway project in August 2021.

According to the People's Committee of Ho Chi Minh City, it is expected that the medium-term public investment capital for the 2021 to 2025 period, along with the city budget as per the announcement by the Prime Minister, will be VND 127,683.9 bn for on-going projects. This includes transitional projects and new start-up projects that have been decided by competent authorities, which are projects funded by the central budget, and pre-investment projects that have been allocated capital in the year 2021. Therefore, the Ho Chi Minh City-Moc Bai Expressway project has not been balanced in the medium-term public investment plan for the 2021 to 2025 period.

Illustrative photo
Ho Chi Minh City proposes to adjust the expected capital level of the medium-term public investment plan for the period 2021 to 2025 period from investment capital sources in the city, and can mobilize about VND119,410 bn. According to the Department of Planning and Investment, in case the National Assembly agrees to increase the expected capital level of the medium-term public investment plan for the period 2021 to 2025 period, the Department of Transport needs to review and redefine the priority order of projects in the field of transportation. In particular, the Ho Chi Minh City-Moc Bai Expressway project must be given highest priority to ensure the capital source and the ability to balance the capital for the project implementation from the additional capital the City can mobilize is the basis for reporting to the City People's Council to consider and decide on the project.

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