The Ministry of Transport has proposed the Government set aside more than VND93.53 trillion (US$42.7 billion) from the State budget to invest in a section of the North-South Expressway in the 2017-2020 period.

The sum will make up 40.7% of the total investment planned for the Eastern North-South Expressway, which connects Hanoi and HCMC.

It will be used in line with the 2016-2020 public investment plan to cover the costs for site clearance, management consultancy, and construction and installation support on the section, said the ministry.

The State’s contribution is the prerequisite to attract investment for the expressway, which costs dearly and investors cannot simply recover capital by collecting toll fees.

The ministry calculate that the construction of the Eastern North-South Expressway will require VND8.45 trillion next year alone, VND74.69 trillion until 2020, and VND18.85 trillion in 2021-2022.

According to the ministry, it will be a hard job to attract foreign investors for the project as they will require guarantee for their revenue, exchange rate risk and even request the Government’s guarantee for their bank loans.

To attract local investors, the Government should ease several policies as the expressway project plays a key role in the country’s socio-economic development, the ministry suggested.

However, in its document sent to the transport ministry, the Ministry of Finance has expressed worries over the financial scheme for the Eastern North-South Expressway.

The State capital proposed for the project is too big compared to what has been planned in the 2016-2020 public investment scheme and does not comply with the laws on public investment and State budget, said the finance ministry.

To come up with a more feasible and reasonable solution for balancing capital sources, the finance ministry suggested that the transport ministry work with the Ministry of Planning and Investment to review the order of investment priority for projects in the 2016-2020 public investment plan.

In case the transport ministry cannot balance investment, it should delay the construction of the Eastern North-South Expressway.

SGT