Domestic firms should be prioritized in huge expressway project: AVINA

According to a document AVINA has sent to the National Assembly’s Finance and Budget Committee, the Government Office and the Ministry of Transport, the requirements for investors that want to carry out the project are unreasonable, Nguoi Lao Dong newspaper reported.

Prior to May 4 last year, firms must have equity equivalent to at least 10% of the investment cost of each component of the project if they get involved in line with the Government’s Decree 15/2015/NQ-CP, said AVINA chairman Tran Chung. This regulation effectively eliminates domestic firms without strong finances.

To make matters worse, the ratio has been revised up to at least 20%. In addition, firms have had to develop projects with a total investment cost representing half the current cross-country expressway project’s cost. Only a small number of domestic investors can meet these requirements, Chung added.

According to AVINA, the requirements related to the experience of contractors also push local firms out of the project. Specifically, interested contractors have already implemented certain packages of a similar project or the whole project with investment equivalent to at least 20% of the capital needed for the North-South Expressway project.

In reality, no contractors have won many packages in a state-funded investment project of such scale.

Although two or more domestic firms can form consortiums to get involved in the project, the requirements for domestic consortiums are stringent as well. 

The Ministry of Transport has divided the project into smaller components but the cost of each component remains prohibitively huge. For example, a section of the expressway from Cam Lam District in Khanh Hoa Province to Vinh Hao Commune in Binh Thuan Province’s Tuy Phong District consists of a road and a tunnel. Vietnam Expressway Corporation and Deo Ca Group, which have previous experience in road, bridge and tunnel construction, might not meet the requirements even if they work together.

Therefore, AVINA proposed the National Assembly, the Government and the Ministry of Transport relax the requirements of the project. The Ministry of Transport should ensure fairness treatment between domestic and foreign companies.

Tran Van The, vice chairman of Deo Ca Group, has expressed interest in the project, saying his firm can participate in the North-South Expressway project. The firm is working on Bac Giang-Lang Son and Trung Luong-My Thuan expressways and has built multiple tunnels, such as Co Ma, Deo Ca, Hai Van and Cu Mong.

However, the ministry will only take into account the already-completed projects when it assesses a firm’s capability. Therefore, Deo Ca Group cannot take part in the project, The added.

Ta Quyet Thang, chairman and general director of Son Truong Co., Ltd, agreed that Vietnamese firms are capable of executing the project, and that his company had earlier built Tam Bac Bridge, which is 130 meters long and 26.4 meters wide, in Haiphong City over a period of only 50 days.

Domestic enterprises should be encouraged to participate in the project, said Tran Huu Hiep, an economic expert.

Pham Chi Lan, another economic expert, has the same view, saying that domestic firms should be prioritized when it comes to selecting investors for the expressway project.

HCMC – The Association of Investors in Vietnam Road Traffic Works (AVINA) has proposed relaxing requirements for the North-South Expressway project to make it possible for local companies to get involved in this megaproject.

According to a document AVINA has sent to the National Assembly’s Finance and Budget Committee, the Government Office and the Ministry of Transport, the requirements for investors that want to carry out the project are unreasonable, Nguoi Lao Dong newspaper reported.

Prior to May 4 last year, firms must have equity equivalent to at least 10% of the investment cost of each component of the project if they get involved in line with the Government’s Decree 15/2015/NQ-CP, said AVINA chairman Tran Chung. This regulation effectively eliminates domestic firms without strong finances.

To make matters worse, the ratio has been revised up to at least 20%. In addition, firms have had to develop projects with a total investment cost representing half the current cross-country expressway project’s cost. Only a small number of domestic investors can meet these requirements, Chung added.

According to AVINA, the requirements related to the experience of contractors also push local firms out of the project. Specifically, interested contractors have already implemented certain packages of a similar project or the whole project with investment equivalent to at least 20% of the capital needed for the North-South Expressway project.

In reality, no contractors have won many packages in a state-funded investment project of such scale.

Although two or more domestic firms can form consortiums to get involved in the project, the requirements for domestic consortiums are stringent as well. 

The Ministry of Transport has divided the project into smaller components but the cost of each component remains prohibitively huge. For example, a section of the expressway from Cam Lam District in Khanh Hoa Province to Vinh Hao Commune in Binh Thuan Province’s Tuy Phong District consists of a road and a tunnel. Vietnam Expressway Corporation and Deo Ca Group, which have previous experience in road, bridge and tunnel construction, might not meet the requirements even if they work together.

Therefore, AVINA proposed the National Assembly, the Government and the Ministry of Transport relax the requirements of the project. The Ministry of Transport should ensure fairness treatment between domestic and foreign companies.

Tran Van The, vice chairman of Deo Ca Group, has expressed interest in the project, saying his firm can participate in the North-South Expressway project. The firm is working on Bac Giang-Lang Son and Trung Luong-My Thuan expressways and has built multiple tunnels, such as Co Ma, Deo Ca, Hai Van and Cu Mong.

However, the ministry will only take into account the already-completed projects when it assesses a firm’s capability. Therefore, Deo Ca Group cannot take part in the project, The added.

Ta Quyet Thang, chairman and general director of Son Truong Co., Ltd, agreed that Vietnamese firms are capable of executing the project, and that his company had earlier built Tam Bac Bridge, which is 130 meters long and 26.4 meters wide, in Haiphong City over a period of only 50 days.

Domestic enterprises should be encouraged to participate in the project, said Tran Huu Hiep, an economic expert.

Pham Chi Lan, another economic expert, has the same view, saying that domestic firms should be prioritized when it comes to selecting investors for the expressway project.