The Ministry of Transport has presented a financing plan for phase one of the North-South Expressway project, with the State budget accounting for 39% of the VND118.7 trillion (US$5.24 billion) cost and the remainder coming from loans and the private sector.

A view of HCMC-Long Thanh-Dau Giay Expressway, which is part of North-South Expressway 

At a teleconference on construction of the North-South Expressway in the east of the country held by Giao Thong newspaper on November 1 , experts and investors asked how the ministry could raise such a huge amount of capital.

Nguyen Danh Huy, head of the Public-Private Partnership Department under the ministry, said the project would be carried out in phases to make it easy to call for investors.

VND55 trillion has been secured from the proceeds of Government bond sales to finance feasibility study, site clearance, technical design and bidding. The remaining VND63 trillion will be financed by private enterprises.

Of VND63 trillion, some VND13 trillion would come from investors after the proportion of investors’ equity has been revised up from 10% to 15%. Huy said the remaining VND50 trillion would be mobilized from domestic banks in four years.

Deputy Minister of Transport Nguyen Nhat said the proportion of State capital in the project is high. The Government is responsible for site clearance, design and project formation to prevent cost overruns which can happen when site clearance falls behind schedule.

SGT