A fresh investment plan has been proposed for the construction of aroad system connecting Hanoi to Hoa Binh province under thebuild-operate-transfer model, Vietnam Investment Review reports.
A proposal from the Ministry of Transport (MoT) just submitted to thePrime Minister outlines a Hoa Lac-Hoa Binh route built over 30kmstarting from an ethnic culture and tourism village in Hanoi’s Son Taytown and linking up to National Highway 6 next to Hoa Binh city.
It also includes expanding Highway 6’s 33km Xuan Mai-Hoa Binh section by two lanes.
Consulting unit estimates show the cost for the route, which will belater upgraded into a highway, at around 2.138 trillion VND (102 millionUSD), of which 566 billion VND (27 million USD) will go into siteclearance.
Improving the 33km of Highway 6, including sectionsthrough crowded residential quarters, was estimated at around 341billion VND (16.2 million USD).
“We are seeking the PrimeMinister’s approval to combine Highway 6’s 33km upgrade with theconstruction of the Hoa Lac-Hoa Binh route,” said Deputy Minister ofTransport Nguyen Hong Truong.
This will put total project costs at around 3.129 trillion VND (149 million USD).
The project is considered urgent because Highway 6 is the only roadlinking the northwestern region to Hanoi and is quickly deteriorating.
Estimates show that to meet increasing transport demand by 2017, thehighway needs to be upgraded and expanded. It faces a particularly greatchallenge as the expansion will infringe on the properties of numerousresidents.
Since budget capital is not readily available forthe project and it is hard to access ODA, the MoT is proposing theproject be conducted under the build-operate-transfer (BOT) model withall funding provided by the investor.
The investor will begranted the right to place two toll stations on Highway 6 andcollections could begin immediately after the upgrade slated for 2015.
One station will be set up on the Hoa Lac-Hoa Binh route with collections starting when it opens, hopefully, in 2017.
Considering the toll price, the MoT proposed the Government apply afee similar to that of National Highway 1’s BOT projects, where the fareexceeded the MoT’s cap by 3.5 times.
With these conditions, investment can be retrieved within 29 years.
Under the new plan, the road system connecting Hanoi and Hoa Binh willhave four lanes, similar in scope to the Hoa Lac-Hoa Binh highwayproject that developer Hanoi Import Export JSC (Geleximco) withdrew fromin August 2013.
After the project’s investment spiked to 18trillion VND (857 million USD), Geleximco sent a document to the PrimeMinister asking they be allowed to stop their involvement as they wouldnot be able to retrieve their investment.
According to a MoTsource, other local investors have since showed interest in the project,even Geleximco has renewed interest after changes to the project’s planand model.
“This is actually a solution for both the MoT andinvestors when it comes to the successful upgrade of this important roadsystem,” said a transport expert.-VNA
A proposal from the Ministry of Transport (MoT) just submitted to thePrime Minister outlines a Hoa Lac-Hoa Binh route built over 30kmstarting from an ethnic culture and tourism village in Hanoi’s Son Taytown and linking up to National Highway 6 next to Hoa Binh city.
It also includes expanding Highway 6’s 33km Xuan Mai-Hoa Binh section by two lanes.
Consulting unit estimates show the cost for the route, which will belater upgraded into a highway, at around 2.138 trillion VND (102 millionUSD), of which 566 billion VND (27 million USD) will go into siteclearance.
Improving the 33km of Highway 6, including sectionsthrough crowded residential quarters, was estimated at around 341billion VND (16.2 million USD).
“We are seeking the PrimeMinister’s approval to combine Highway 6’s 33km upgrade with theconstruction of the Hoa Lac-Hoa Binh route,” said Deputy Minister ofTransport Nguyen Hong Truong.
This will put total project costs at around 3.129 trillion VND (149 million USD).
The project is considered urgent because Highway 6 is the only roadlinking the northwestern region to Hanoi and is quickly deteriorating.
Estimates show that to meet increasing transport demand by 2017, thehighway needs to be upgraded and expanded. It faces a particularly greatchallenge as the expansion will infringe on the properties of numerousresidents.
Since budget capital is not readily available forthe project and it is hard to access ODA, the MoT is proposing theproject be conducted under the build-operate-transfer (BOT) model withall funding provided by the investor.
The investor will begranted the right to place two toll stations on Highway 6 andcollections could begin immediately after the upgrade slated for 2015.
One station will be set up on the Hoa Lac-Hoa Binh route with collections starting when it opens, hopefully, in 2017.
Considering the toll price, the MoT proposed the Government apply afee similar to that of National Highway 1’s BOT projects, where the fareexceeded the MoT’s cap by 3.5 times.
With these conditions, investment can be retrieved within 29 years.
Under the new plan, the road system connecting Hanoi and Hoa Binh willhave four lanes, similar in scope to the Hoa Lac-Hoa Binh highwayproject that developer Hanoi Import Export JSC (Geleximco) withdrew fromin August 2013.
After the project’s investment spiked to 18trillion VND (857 million USD), Geleximco sent a document to the PrimeMinister asking they be allowed to stop their involvement as they wouldnot be able to retrieve their investment.
According to a MoTsource, other local investors have since showed interest in the project,even Geleximco has renewed interest after changes to the project’s planand model.
“This is actually a solution for both the MoT andinvestors when it comes to the successful upgrade of this important roadsystem,” said a transport expert.-VNA
