Under the National Assembly’s Resolution No 52, the North-South Expressway comprises 11 component projects with total investment capital of VND118.716 trillion.
In October 2018, MOT’s (Ministry of Transport) feasibility studies of all the 11 component projects showed that the total investment capital was VND102.513 trillion, a decrease of VND16.203 trillion than initially fixed.
Of this, VND11.431 trillion would be spent on site clearance, VND67.922 trillion on construction and equipment, VND3.020 trillion on loan interest, and VND12.358 trillion on contingent costs and other expenses.
The average cost to build one kilometer of the North-South Expressway approved by MOT is VND115.8 billion per kilometer, including expenses on building bridges and tunnels, reinforcing soft soil, and implementing non-stop e-toll collections system, smart traffic and farm roads.
|The estimated cost of the North-South Expressway in 2018 was VND16 trillion lower than the initial estimate made in 2017 when the National Assembly decided to develop the project.|
If excluding the Cam Lo – La Son project (2-lane road, 98.4 kilometers in length) and the My Thuan 2 Bridge (6.6 kilometers), the investment rate would be VND95.6 billion per kilometer.
If compared with the investment rate for highway construction in MOC’s (Ministry of Construction) Decision 44/2020, not including the expenses on compensation for site clearance, contigent expenses and loan interest, the investment rate of the North-South Expressway would be lower, according to MOT.
According to Nguyen Van Truong, deputy CEO of Truong Son Consultancy, one meter of tunnel has an investment rate three times higher than one meter of bridge and 10 times higher than one meter of road. Therefore, it is necessary to consider the costs to build bridges and tunnels when calculating the total costs.
For example, the Cam Lam – Vinh Hao project has the total length of 79 kilometers and investment capital of VND13.7 trillion. However, the project comprises 2.2 kilometers of tunnel. The construction cost alone would be over VND10 trillion. Meanwhile, the MOT’s current proposed construction cost is VND8 trillion, lower than MOC’s average unit price.
Eight projects of the North-South Expressway project are expected to be developed under the Public Private Partnership mode. However, according to Truong, if developing the projects as public investment projects, the costs would be much lower because they won’t have commercial interest rates during the entire life cycle of the projects.
Tran Chung, former director of the State Authority for Construction Quality Inspection, said he supports the decision on switching three projects to public investment mode and maintaining eight PPP projects.
“Only projects that investors aren't interested in, and projects with importance in national defence and security, or projects developed to stimulate economic development post-Covid-19 should be implemented as public investment projects,” Chung said.
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