North-south expressway: success or failure depends on credit

With the decision on canceling international bidding for the North-South expressway, the success or failure of the project now depends on the capability of domestic contractors and the credit to be provided.

Ministries consider lowering requirements

According to Nguyen Viet Huy, deputy director of the PPP (private public partnership) Department under the Ministry of Transport (MOT), the procedures for domestic and international bidding are nearly the same, and the only difference lies in the status of investors.

“MOT plans to issue documents to invite investors for the prequalification round in early October and the shortlisting is expected to finish by January 2020. From February 2020, the ministry will organize bids to select investors,” Huy said.

Regarding the required financial capability of investors, MOT plans to retain the criteria as stipulated in the government’s Resolution 20/2018. This means that investors must have the stockholder equity meeting 20 percent of total investment of the project. They must also prove commitments from commercial banks to provide loans.

MOT is joining forces with the Ministry of Planning and Investment (MPI) to reconsider the requirements on investors’ experience in order to pave the way for Vietnamese enterprises to participate in the project, so as to heighten competitiveness, transparency and effectiveness.

When asked if domestic investors who don’t meet the requirements on capital and experience can participate in the projects under the joint names with foreign investors, Huy said that under the current laws on domestic bidding, only domestic investors can work each other domestic firms.

Regarding the requirements on investors, Deputy Minister of Transport Nguyen Ngoc Dong said MOT cannot amend the requirement set by the National Assembly’s Resolution No 52 that the stockholder equity of investors must be equal to at least 20 percent of the project’s capital. However, the ministry has requested relevant ministries, including MPI, reconsider the requirements on experience.

Credit

Tran Van The, deputy chair of Deo Ca Group, applauded the decision by MOT to cancel the international bidding for the project, because this will pave the way for Vietnamese enterprises to participate in the important project.

However, he said the Government needs to take measures to request banks to provide loans to implement the project.

Sharing the same view, Pham Van Khoi, chair of Phuong Thanh JSC, the investor of Phap Van – Cau Gie project said credit is the key to the successful implementation of the project.

Anticipating that Vietnamese investors would find it difficult to borrow capital from banks to implement the project, Dong of MOT said his ministry has reported this to the government and asked the government to instruct the State Bank and commercial banks to settle the problem.

Linh Ha / Vietnamnet