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Infrastructure & PPPs in Vietnam - Q1 2024 Update

VIETNAM is seeing heightened activity in PPPs, especially in the transport and logistics sector. The country has planned large acale investments for development of new airports, a network of seaports, expansion of rail network and new brigde construction projects. PPPs are also being deployed for social sector infra and electricity transmission grids in the country. Thus, the country presents an excellent investment opportunity for both local and international players, given a visible project pipeline.

Read the latest developments in Infrastructure and PPPs in Vietnam in our Q1 2024 insight.

 

October 2023

5 VIETNAM PROVINCES TO DRAFT AIRPORT PPP PLANS

Vietnam’s transport ministry has permitted 5 provinces to draw up plans to develop airports in the public-private partnership (PPP) mode.

The airports are:

  • Na San in the northern province of Son La;

  • Tho Xuan in central provinces of Thanh Hoa,

  • Vinh of Nghe An,

  • Chu Lai of Quang Nam; and

  • Lien Khuong in the Central Highlands province of Lam Dong

In June 2023, the Prime Minister approved a plan to expand the number of airports from 22 to 30 by 2030 and to 33 by 2050, entailing an estimated investment of VND 420 Trn (USD 17.88 Bn). Hanoi and Ho Chi Minh City will remain Vietnam’s aviation hubs. The PPP mode will be prioritized for new airports while for operational airports, upgrades and expansion could be carried out through the PPP or other investment frameworks. 

For the Chu Lai and Tho Xuan airports, provincial authorities can draw up proposals for constructing additional runways, with the current ones being managed by the defense ministry for military purposes. While taxiways and runways managed by the ministry will be accorded priority in the state budget, local authorities will have the option of constructing assets in the build-transfer-operate mode if the funds do not suffice. For the remaining three airports, the transport ministry has asked provincial officials to draft plans for investments in the PPP mode or allow state-run Airports Corporation of Vietnam to establish subsidiaries to operate them.


VIETNAM PLANS NEW LAW TO BOOST PPPS IN CAPITAL CITY 

Vietnam plans to introduce a law to facilitate infrastructure investments in its capital city. The amended Capital Law, which was submitted to the National Assembly for review, proposes a cap on land use fees for social, transportation and other infrastructure projects in Hanoi. The assembly suggested the drafting agency add more clauses to the proposed legislation to ensure that projects are more commercially feasible and attractive to investors. 

The draft law expands the scope of public-private partnerships to cover sports and cultural projects as well as empowers the Hanoi People’s Council to specify the investments it requires for its infrastructure development. The city will prioritize a transit-oriented development model and will need to formulate a framework for resettlement for project displaced people. 

 

SEAPORT SYSTEM TO BE DEVELOPED IN VIETNAM BY 2030 

The Vietnam Maritime Administration will develop a modern seaport system in the country, as per the National Seaport System Development Master Plan 2021-2030, with a vision for 2050. Under the approved national seaport development plan, seaports are divided into 5 different groups (Totalling 28 Seaports) depending on the scale and function. The seaport system is connected with railway and waterway routes as well as the national highway and local road system.

The master plan gives priority to upgrading the infrastructure of international gateway ports such as Lach Huyen in Hai Phong and Cai Mep-Thi Vai in the province of Ba Ria-Vung Tau and three special seaports, including Van Phong International Transhipment Port in the province of Khanh Hoa, Tran De seaport in the province of Soc Trang and Can Gio International Container Terminal in Phu Loi Isle in Thanh An Commune will be developed.

 

INVESTMENT PLAN APPROVED FOR USD 126 Mn TRANSMISSION LINE PROJECT IN VIETNAM 

The Government of Vietnam has approved the investment and implementation plan of the 500 kV Nam Dinh I thermal power plant–Thanh Hoa transmission line project. The project will be developed at a total investment of VND 3.09 Trn (USD 126 Mn). Vietnam Electricity National Power Transmission Corporation (EVNNPT), a subsidiary of Vietnam Electricity (EVN), is one of the key investors, contributing VND 925.83 Bn (USD 38 Mn) for project development. 

Meanwhile, over VND 2.16 Trn (USD 89 Mn) will be funded by commercial bank loans. The 74.4-km line, which will pass through the provinces of Nam Dinh, Ninh Binh and Thanh Hoa, will help reduce load and avoid overload on existing 500 kV lines as well as improve the north-central transmission capacity. Combined with the larger 513-km, 500 kV Quang Trach–Quynh Luu–Thanh Hoa–Nam Dinh I–Pho Noi thermal power plant sections, the line will boost interregional connections and help ensure power supply for the northern region from power sources in the north-central region in Vietnam.

 

ACTION PLAN LAUNCHED TO EXPAND AND IMPROVE VIETNAM’S RAIL NETWORK

The Government of Vietnam has launched an action plan to expand and improve the country’s railway transport to 2030 with a vision towards 2045. The action plan outlines tasks including refining institutions and policies, completing railway planning and mobilizing funds for future rail projects.  From the period between 2024 to 2026, the Ministry of Transport (MoT) will update the Railway Law and related laws, while the Ministry of Planning and Investment (MoPI) will revise the Investment Law to attract private investment.

From 2023 to 2025, the Ministry of Finance (MoF) will allocate the state budget to railway-related technology. The Ministry of Science and Technology will create policies to promote railway technology. Between 2025 and 2045, the MoPI will allocate state budgets to invest in railway infrastructure, particularly the North-South high-speed railway. Meanwhile, the MoF will focus on budgeting for railway maintenance.

 

November 2023 

VIETNAM PARLIAMENTARY PANEL SUGGESTS HIGHER GOVERNMENT SHARE IN PPPS 

Vietnam’s parliament has approved a resolution piloting several specific policies and mechanisms regarding investment in road transport infrastructure. The committee recommended that the Assembly permit the people’s council of Ho Chi Minh City (HCM) consider and take a decision on increasing the share of state capital in public-private partnership (PPP) projects to as much as 70%. This would ensure participation from the private sector in developing road infrastructure in regions that witness low vehicle traffic.

 

VIETNAM PLANS USD 434 Mn BRIDGE PPP 

Vietnam’s Ho Chi Minh City is planning to develop a USD 434 Mn bridge project in a public-private partnership (PPP) model. The transport department is conducting a pre-feasibility study for the Can Gio bridge in preparation for approval from the city government. 

The 3.6 km bridge will be built over the Soai Rap river, connecting the Nha Be and Can Gio districts, and will have 6 lanes. The project design may change based on the findings of the pre-feasibility study. The city government will contribute about 49% of the project's cost, with the remainder to come from investors. Authorities aim to commission the project in 2028 and have set April 2025 as the construction start date. The Vietnamese government is studying amendments to its PPP law in an attempt to attract international capital.

 

VIETNAM TO USE PPP FOR HIGHWAY LINK TO LAOS 

Vietnam's government is looking to develop a highway connecting a seaport on its eastern coast to a border gate with Laos. Deputy Prime Minister mandated the Quang Tri provincial government as the procurement agency of the National Highway 15D project, which will be carried out in the PPP mode. The highway will connect La Lay International Border Gate in north-central Vietnam to My Thuy Seaport in central Quang Tri province. It will also link to other major motorways including the National Highway 1, Ho Chi Minh Road as well as North-South Expressway. 

There are on average 300-350 vehicles passing through the La Lay border gate every day. The project is proposed to meet the demand to transport 20-30 Mn tonnes/year of coal from Laos through the La Lay International Border Gate to seaports in Vietnam for exports. The new project is expected to boost trade between Vietnam's central coast regions with Laos and Thailand. The highway has a designed length of 78 km and an estimated cost of VND 1.4 Trn (USD 58 Mn).

 

MOIT AND UNIDO TO PROMOTE ENERGY EFFICIENCY IN VIETNAM 

The Ministry of Industry and Trade (MoIT) has collaborated with the United Nations Industrial Development Organization (UNIDO) on a project to promote energy efficiency (EE) among large business enterprises in Vietnam. The project will target EE through the Energy Management Systems (EnMS) and EE practices in small and medium-sized enterprises in the country and is part of the Sustainable Energy Transition Programme (SEPT) sponsored by the European Union (EU). The project will be implemented by UNIDO and the MoIT for 5 years, from 2023 to 2027.

The 3 main components of the project are strengthening institutional and policy frameworks; implementing capacity-building programmes and EnMS; and system optimization on targeted industries.

 

December 2023 

VIETNAM PLANS USD 248 MN BRIDGE PPP

Ho Chi Minh City's Department of Transport has submitted a pre-feasibility study for a bridge project to be built in a public-private partnership to an appraisal council. The Thu Thiem 4 bridge project will cost an estimated VND 6 Trn (USD 248 Mn). The city administration aims to start a bid process to select a developer and operator in 2025, and for construction to be completed in 3 years.


VIETNAM PROVINCE TO BUILD VAN PHONG AIRPORT AS PPP

Vietnam's Khánh Hòa province will build the Van Phong Airport as a public-private partnership (PPP) at an estimated costof VND 7 Trn (USD 288 Mn). The province will use the build-operate-transfer methods. The administration aims to attract capital for 27 projects in the Van Phong economic zone in the next one year.


VIETNAM’S HCM CITY PROPOSES SOCIAL INFRA PPPs

The people’s council of Vietnam’s Ho Chi Minh (HCM) City has proposed the construction of a VND 7 Trn (USD 289.25 Mn) stadium through a public-private partnership (PPP). The proposal is part of 41 PPPs, including 6 in healthcare and 12 in education.

The stadium, to be constructed in Thu Duc City, will have a capacity of 50,000. An investment of close to VND 1 Trn (USD 41 Mn) will be made to develop a football academy as well as outdoor training field clusters. The proposal also includes motorcycle track, cycling tracks, and an archery and shooting range.


GRID AND POWER PROJECTS IN VIETNAM RECEIVE PRIORITY IN 2024

The Ministry of Industry and Trade (MoIT) of Vietnam will promote the development of power generation and transmission projects to ensure reliable electricity supply in 2024. As a part of this, several grid projects will commence operations during the year, including the 500 kV Quang Trach–Quynh Luu–Thanh Hoa–Nam Dinh I thermal power plant (TPP)–Pho Noi and Thanh Hoa–Nho Quan–Ha Tinh transmission lines, as well as the 500 kV Bac Ninh substation and its connection lines, and the 500 kV Thanh Hoa substation.

The agency has also directed to expedite works on several power generation projects, such as the 714 MW second turbine of the Van Phong 1 TPP, the 54 MW Nam Cum 4 hydropower plant (HPP), the 45 MW Ban Mong HPP, and the 360 MW expanded HPP. The MoIT is developing a draft amendment to the Electricity Law, and implementing legal documents related to the electricity industry to facilitate the above projects. 

 

List of Key Transactions - Q4 2023



Source: YOG INFRA analysis

 

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