What does the Belt 4 project in the Capital Region have to attract PPP investors?

Speaking at the online seminar “Connecting inter-regional belt traffic – the driving force for breakthrough development”, Vice Chairman of the City People’s Committee. Hanoi Duong Duc Tuan said that the Ring Road 4 project in the Capital Region will be invested in the form of a mixture of public investment and public-private partnership (PPP).

To implement the national important project of the Capital Region, currently the total investment of the project is very large, 85,813 billion, divided into 3 project groups.

In which, project group 1 is site clearance corresponding to 3 localities and 3 projects. Group 2 is the parallel urban road project under low for 3 localities 3 projects. Group 3 is a socialization project (only 1 project) under the public-private partnership (PPP) model and BOT contract undertaken by the investor.

Investment capital of groups 1 and 2 shall be assumed by the central and local budgets; Project group 3, BOT investors undertake with a total investment of 29,410 billion, very large scale.

City People’s Committee Hanoi is aware of difficulties for both central and local budget areas, which have now been relatively complete balance of central medium-term public investment in 2021-2025. For the Government, the balance is expected to be over 28,000 billion; for 3 localities, Hanoi, Hung Yen and Bac Ninh, the balance must also be over 28,000 billion, the structure is similar to the Central one, in which Hanoi is the main, followed by Bac Ninh and Hung Yen.

For the 3 localities implementing the parallel lower road project, it is likely that the capital must be up to 2026 and the investment progress is suitable with the process of forming the structure of the whole route. For the PPP-BOT project with a scale of 29,410 billion VND, it must be completed by 2025.

The biggest difficulty of the project is site clearance

Currently, the biggest difficulty of the national key project, Belt 4, Capital Region, is site clearance. The specific mechanism created from the method of grouping project components to separate the project of site clearance.

The Ring Road 3 project in Ho Chi Minh City basically does not have a railway, but with Ring 4, the Capital Region is the reserve ground clearance for the railway development corridor of 30 m in the total road width ranging from 90-135 m. , the average is 125 m.

So project group 1 is the key to open project 2 and 3; At the same time, this is the Government’s response to the localities. The following will also be agreed by the National Assembly that site clearance must be one step ahead, creating synchronization at the same time.

Mr. Tuan also said that experience shows that in terms of site clearance, even for the current Ring 4 of the Capital Region, the structure of the total investment in site clearance accounts for less than 25%, but for Belt 3 Ho Chi Minh City is likely to account for over 50%.

Therefore, the slower the clearance, the more dangerous it is. Certainly, the land clearance cannot be divided into multiple times because different periods of compensation and resettlement support will create an impossible effect. This is a lesson learned.

Currently, the land clearance scale for Ring 4 is relatively large, 1,341 ha for all 3 provinces and cities; accounting for 19,000 billion of the total investment of 85,813 billion, less than 25%.

City only. Hanoi must have a plan for compensation and resettlement for about 14,647 households and resettlement for 2,203 households, and has prepared 9 resettlement sites with a size of about 36.3 hectares.

When this difficulty is overcome, the next component projects such as the project of group 2 parallel urban roads will take place from 2022-2026; especially the PPP-BOT central project with 65% going on high and 35% going below to create conditions for urban development on both sides of the route will have to be completed in 2025.

3 unique attractions of the Belt 4 project in the Capital Region

With the model of public investment combined with public-private investment, the aim is to reduce the burden on the central and local budgets. Experience from the implementation of the North-South Expressway in phase 1 and phase 2 shows that it is difficult to ensure the feasibility of a BOT in the PPP model.

In fact, many PPP-BOT projects have to be converted to public investment in response to each period of economic recovery and development. But Hanoi, with the support of the Government, is determined to implement this project in the form of PPP.

The Law on Investment in the form of public-private partnership PPP has also shared the increase and decrease in revenue, the ability to collect closed fees of the typical belt per Km. Or as Ring 4 also has its own attractiveness to ensure development. This is a condition to ensure feasibility but also a difficulty for Belt 4, Mr. Tuan said.

With the Ring Road 4 project in the Capital region, there are 3 attractive points for investors, including: Component 3 projects are placed in the overall project, not absolutely independent, supported by projects in groups 1 and 2. This is a public-private-led model, creating a driving force to promote PPP. With such a large total investment, interoperability is important.

In particular, with the flexibility of the central and local budgets, even the flexibility of localities, Hanoi is the nucleus, taking responsibility for site clearance in its area, even prioritizing the central budget for liberation. land for other provinces such as Hung Yen.

Hanoi is the authority to appraise BOT and PPP projectsthe central highway project 65% above, 35% below, is almost always in Hanoi, determining over VND 20,000 billion out of a total of VND 28,000 billion.

Belt 4 Capital Region creates viable return on investment. According to the calculations of ministries, sectors, and working groups of the Government, the project will be recovered in 21 years, it is feasible to collect new technology fees, without stopping, to collect fees secretly… We are in the process of completing but have already received it. attracted the attention of major investors.

Hanoi’s point of view is that through identifying PPP investors, taking advantage of strategic investors, for the City to develop urban and rural areas. After the investment policy is approved by the National Assembly, the selection of PPP investors is a bidding process. In this way, select investors of strategic importance, develop related urban areas, and attract social investment for the project according to the tasks assigned by the Government, Mr. Tuan said.

According to PV