Thursday, September 21 2017

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We need effective measures for the North-South expressway

Update: June, 07/2017 - 10:42

Đỗ Văn Sinh, a permanent member of the NA Committee for Economic Affairs, speaks to online newspaper VietnamNet about the importance of finding workable measures to construct the future North-South expressway.

What is the future for the construction of the North-South expressway project?

There are three issues that the Government has to make clear.

First, is the scope of investment. Under the Prime Minister’s Decision 326, the North-South expressway will have between 4 and 6 lanes. However, there is another option saying that the expressway could have between 6 and 10 lanes to cater for future needs.

The decision of how many lanes will be constructed is very important, as if the projection is wrong, there could be two serious consequences.

If the first option is chosen, the number of vehicles could be high and we have to increase the number of lanes. This will incur huge wastage for the national budget. However, if we decide on the second option with a vision until 2050, is this too long term?

Second, will the project be constructed in the form of phased, or staged, investment?

According to decision 326, some portions of the expressway will have 6 lanes with widths of 32 metres, while some others will be 4 lanes with a width of 22 metres.

But if the project is in the form of phased investment, and in this phase the road is 17 metres and only one portion will be 25 metres. If that’s the case, in the following investment, the road will be enlarged. However, the road enlargement will be done segment by segment, not throughout the North-South expressway due to the shortage of funding.

Some people have strongly opposed this proposal and said it would be a big waste of money and the road would be “patchy”.

But, in my opinion, the most important thing is the effectiveness of using the available capital and the use of the constructed road.

Finally, the land settlement and compensation. As we all know the North-South expressway will go through 16 provinces. This is a tough question for the project owner to solve, as each province has its own mechanisms.

To solve this problem, the Government has suggested that due to the shortage of capital investment, we will do the land clearance according to the project implementation stage. However, many people have opted for the idea that land clearance should be done at once for the entire length of the North-South expressway. In my opinion, I agree with the second option. As from now until 2025 we still have to invest in the construction of the North-South expressway.

How will the project be implemented?

The Government has proposed four mechanisms to implement the project.

First, the project will be divided into 20 project components with different forms of investment and work contracts. This format has already been applied in constructing National Highway No.1.

Second, according to Vietnamese law, before making a final decision on the project, an environmental impact assessment (EIA) must be completed. However, in order to speed up the project process, we may ask the National Assembly to allow us to write the EIA report while writing the feasibility study (FS).

Third, the Government will call on investors to invest in the project in accordance to the Vietnamese Investment Law: 15 percent for small-scale projects and 10 percent for large-scale projects. However, according to Government Decree 15 on BOT projects, investors are allowed to invest according to project phases.

And finally, the tendering of the construction of the national expressway will be opened in the form of BOT.

The Government has given a nod to the Ministry of Transport proposal to set the toll road right in the official contracts signed between the MOT and contractors. However, in my opinion, such a proposal needs further discussion!

How can the Government mobilise VNĐ 312,000 billion ($13.74 billion) for the construction of this project if our public debt has almost reached its ceiling?

We all agree that the North-South expressway is a big project requiring a huge sum of investment ($13.74 billion). It is projected that the project will be divided into three mid-term investment phases, namely from now till 2020, from 2020-2025 and after 2025.

According to a Government report, the project will need VNĐ 130,000 billion ($5.72 billion) from now till 2020. But now we have only VNĐ 55,000 billion (2.42 billion). That means we need to mobilise the remaining sum to invest in the project. This is a demanding job for us.

Our public debt has already reached its benchmark. That means we have to borrow money from the banks. But in our country, the term of depositing money in the banks is often short term. Therefore, it is not easy for the banks to have money available for long-term lending to the project. Furthermore, the banks themselves have put a cap on the sum of money they can lend out.

This is a tough issue! But the good news is that the Prime Minister has assigned the State Bank of Việt Nam to work out a plan to mobilise the money to cover the construction cost in the first phase from now till 2020. Of course, we’ll try to look for other sources to invest in the second phase.

However, in my opinion, the National Assembly should explain the problem to all deputies to help them understand and share the difficulties and challenges with the Government.

When the project is proposed to the full housing meeting, do you think the deputies will vote to give it the go-ahead?

This is one of our concerns. We have already asked the Government to prepare the report carefully so that the deputies will get a full picture of the project. In this NA full house sitting, we have no plan to have a project vote, but instead we will have time to let the deputies discuss about the project’s pros and cons.

In short, I should say, money is the most important issue, but for the 4-5 issues that I have mentioned above, the deputies will discuss and find ways to bring the project into life in the most efficient way. — VNS

 

 

 

 

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