Vietnam's Ministry of Construction (MOC) has proposed assigning four firms to prepare two North-South Expressway PPP expansion projects spanning 966 kilometers with over VND150.4 trillion in investment.

According to a report submitted to the Prime Minister, MOC coordinated with six ministries and agencies to clarify legal frameworks for the North-South Expressway PPP expansion. 

Based on pre-feasibility study results and preliminary investor proposals, the Ministry is considering assigning four enterprises to prepare investments under the public-private partnership (PPP) model.

The four prospective enterprises include the Vietnam Expressway Corporation (VEC), Deo Ca Group JSC, HCMC Infrastructure Investment JSC (CII), and Xuan Truong Construction Enterprise.

Notably, for 15 expressway sections previously funded by state capital and currently collecting tolls, MOC proposed merging them into two PPP projects without requiring state budget support.

Specifically, the northern project runs 415 kilometers from Mai Son to Cam Lo, carrying a preliminary total investment of VND72,186 billion and an estimated 20-year payback period.

The southern project spans 551 kilometers from Quang Ngai to Dau Giay, requiring a preliminary investment of VND78,223 billion with an estimated 15-year payback period.

Combined, both projects total roughly 966 kilometers in length, representing over VND150.4 trillion in investment capital.

MOC said that should issues arise beyond its authority during implementation, it will report to the Prime Minister and competent authorities for guidance.

Bundling sections balances financial viability 

A representative from Project Management Unit 2 under MOC noted that implementing individual PPP projects per section would cause stark financial disparities across routes.

Certain sections experience heavy traffic volumes and strong toll revenues, whereas other segments yield lower financial returns. Merging these segments into unified mega-projects balances cash flows, improves payback feasibility, and boosts appeal for private investors.

This approach also aims to upgrade the eastern North-South Expressway PPP expansion to six lanes, avoiding fragmented development and disconnected bottlenecks between segments.

However, transitioning state-funded expressways into PPP operations requires clearly defining toll collection and capital recovery mechanisms.

According to Project Management Unit 2, prior National Assembly resolutions mandated toll collection to reimburse the state budget. Switching to PPP requires recalculating financial models, especially assessing how toll rates impact transportation costs, logistics expenses, and road users.

"This issue requires transparent reporting and evaluation, as investment methods and toll mechanisms affect not only investors but also citizens and businesses directly," he emphasized.

Investors gain edge in expressway expansion financing

Regarding capital mobilization, Project Management Unit 2 reported that several prospective investors have drafted financial plans and held preliminary discussions with commercial banks.

One proposed financing structure allocates roughly 75 percent of total investment to bank loans and 25 percent to investor-arranged funding, comprising 15 percent equity and 10 percent from other capital sources. These figures remain preliminary discussion ratios rather than officially approved financing structures.

According to Project Management Unit 2, expanding existing expressways offers clear advantages over greenfield highway projects because investors can rely on actual traffic volume data, toll revenues, and technical specifications to evaluate payback viability.

Crucially, site clearance and land compensation were completed during the initial construction phase. Geological survey data, established engineering designs, and prior construction experience also shorten project preparation timelines.

"The primary advantage of these projects is that land clearance is already completed. Investors can clearly assess operational risks and growth potential using real toll revenue benchmarks," the Project Management Unit 2 representative explained.

Nevertheless, mobilizing private capital to expand nearly 1,000 kilometers of expressways presents substantial challenges. Regulators and investors must resolve cross-section financial balancing, bank loan syndication, toll rate frameworks, and revenue management.

These core factors will determine the financial feasibility of the PPP model and govern the implementation pace of the eastern North-South Expressway PPP expansion moving forward.

The adjusted road network plan to 2050 identifies a nationwide expressway network of 46 routes totaling 10,106 km. The national highway system comprises 136 routes, with a total length of 26,340 km.

The five newly added expressways are the Northern Mountain Ring Road, the Northern Midlands Ring Road, Ha Tĩnh - Cau Treo, Hue - A Luoi, and Phan Thiet - Bao Loc - Gia Nghia - Bu Prang.

Vu Diep