Vietnam Boosts Infrastructure Projects
Jun. 21 – This week, the Ho Chi Minh City (HCMC) Infrastructure Investment Joint-Stock Company (CII) announced that it will issue VND1 trillion worth of bonds to be used as funds for infrastructure projects in the city – specifically for the upcoming Saigon 2 Bridge project.
The Saigon 2 Bridge project is estimated to cost a total of VND1.5 trillion, with VND1 trillion of it being sourced from a bond issue. Construction on the project began in April last year, and it is expected to be opened by next November.
In addition to Saigon 2, CII has been entrusted by the HCMC government to upgrade the Thu Duc Intersection, the BOT Binh Trieu 2 Bridge and Road project and a road project to connect the East-West Highway and the HCMC-Trung Luong Expressway.
European interest runs high
French company Sagem Communications has withdrawn from a major traffic control center project in HCMC, and another French firm, Aximun Produits Electriques, has been proposed to replace them.
The project, which will cost an estimated VND3.9 trillion, seeks to develop a new traffic control center in HCMC. It will be equipped with information technology to better integrate control of traffic lights, closed-circuit television cameras and electronic boards to help manage traffic flows.
The center will be well equipped to send traffic information to locals via websites, phones, electronic traffic signs and radio. It will also be able to process data from the metro, buses, underground parking lots and expressway control center systems to better manage traffic flows.
According to the HCMC Department of Transport, the city currently has over 1,400 intersections but only 590 of them have traffic lights. 400 of those intersections are controlled by the urban traffic management unit, and 159 are managed by the HCMC Police.
Recently, United Kingdom (U.K.) Minister of State for Trade and Investment Lord Green spoke at a meeting with HCMC Chairman Le Hoang Quan expressing his desire for the two countries to strengthen trade and investment ties. As a result of this interest, several U.K. firms have expressed their interest in the development of Vietnam’s urban railway system, specifically the Thu Thiem New Urban Area and Long Thanh railway projects.
Of the six metro projects in HCMC, two are currently under construction and two have already secured funding from the Asian Development Bank, the European Investment Bank and the government of Spain.
The ascension of aviation
According to the Civil Aviation Administration of Vietnam, many foreign firms have expressed interest in the expansion of Vietnam’s aviation program – with particular interest in Vietnam’s central region – by way of public-private-partnerships.
Recently, a transformation of Vietnam’s Cam Ranh Airport in Khanh Hoa has been in development. The airport is to be able to accommodate the Airbus A320 and A321 and Boeing B767 and B747 plane models in addition to an estimated total of 5.5 million passengers and 100,000 tons of goods annually.
Airport expansion and investment opportunities are attracting foreign firms for the following reasons:
- The number of air passengers in Vietnam is growing quickly;
- More services are being launched by international air carriers to Vietnam; and
- International tourist travel to Vietnam has risen over recent years.
The Ministry of Transport (MoT) also recently broke ground on a project to expand Vietnam’s National Highway 1A in Vietnam’s Cam Ranh City.
The 36-kilometer stretch of highway is being equipped with six lanes at a total width of 25.5 meters. Construction and Investment Joint Stock Company 194 is the investor of the project, which is worth a total of VND2.7 trillion. The project is expected to be completed by 2015.
This highway expansion project comes hot off the heels of the recent expansion of a 37.5-kilometer stretch of the National Highway 1A located in the Ninh Hoa Township and Van Ninh District, which began on May 26 and cost over VND2 trillion.
The MoT has also recently started work on a 73-kilometer section of highway stretching from Hanoi to the Ninh Binh Province. So far, 57 kilometers have been completed and the remaining 16 kilometers are set to be completed sometime this year.
Furthermore, 499 kilometers (out of a total 1,783 kilometers) of the Thanh Hoa-Can Tho section has already been expanded, and the remaining sections have been divided into 35 projects – which includes 16 build-operate-transfer projects that will stretch 540 kilometers. The expansion is expected to be completed by 2016, and will transform the highway into one with four motorized vehicle lanes and two mixed lanes.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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