Preface - ECFAecfa.or.jp/japanese/act-pf_jka/H22/koei_mythuan22.pdf · Preface Engineering and...

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Engineering and Consulting Firms Association, Japan (ECFA) accepted the applications from the associated members for the Strategic Development Promotion Program for Environment, Natural Resources and Energy Sector in Japanese Fiscal Year 2010 subsidized by Japan Keirin Association, and the External Selection Committee which consist of Ministry of Economy, Trade and Industry, Japan (METI) and Japan International Cooperation Agency evaluated the Trung Luong - My Thuan - Can Tho Expressway in the Socialist Republic of Vietnam as one of the priorities.

Currently, the Government of the Socialist Republic of Vietnam (GOV) carries forward with

the expressway network development program to meet the increase of road traffic demand by rapid economic growth in the country. However, most of the on-going expressway projects depend on the financing by the Development Assistance Agencies, and the counterpart funds strain the state finance. Accordingly, GOV expects to utilize private funds in future expressway projects.

On the other hand, the Government of Japan (GOJ) decided the New Growth Strategy dated

on June 18, 2010 to achieve economic growth by creating new demand and employment, and attaches importance to expansion of growth opportunity through contributing to development of Asian region. One of the prioritized projects in the Strategy is the Promotion of Deployment of Integrated Infrastructure Systems to Asian countries by Public - Private Partnership (PPP) scheme, and GOJ has established a framework for strenuously supporting the initiatives of Japanese private companies.

In consideration of the above situations, ECFA decided to conduct the Preliminary Study on

Trung Luong - My Thuan - Can Tho Expressway Construction Project to promote as the PPP scheme projects, and organized a study team headed by Mr. Tetsuya MAEDA of Nippon Koei Co., Ltd. from December 2010 to March 2011. At present, the Project is divided into the three projects below, and the Second My Thuan Bridge Construction Project is under promotion by METI as the Special Terms for Economic Partnership scheme; therefore, our study subjected to the other two projects.

Trung Luong - My Thuan Expressway Construction Project

Second My Thuan Bridge Construction Project

My Thuan - Can Tho Expressway Construction Project

The study team held a series of discussions with the concerned agencies, and conducted site surveys. As a result of further studies in Japan, this study report was finalized.

I hope that this study report will contribute to the formation and promotion of the Project and

to the enhancement of friendly relations between Vietnam and Japan.

Finally, I wish to express my sincere appreciation to the concerned agencies for their close cooperation extended to our study team.

March 2011

Hisashi TAKANASHI Executive Managing Director ECFA

March 2011

Hisashi TAKANASHI Executing Managing Director Engineering and Consulting Firms Association, Japan

SSuubbjjeecctt:: LLeetttteerr ooff TTrraannssmmiittttaall

Dear Sir,

We are pleased to formally submit herewith the study report of the Preliminary Study on Trung Luong - My Thuan - Can Tho Expressway Construction Project.

This report compiles the study result which was undertaken both in Vietnam and Japan from

December 2010 to March 2011 by the study team, organized by Nippon Koei Co., Ltd.

We owe a lot to many people for the accomplishment of this report. First, we would like to express our sincere appreciation and deep gratitude to all of those who extended their extensive assistance and cooperation to the study team, in particular the My Thuan Projects Management Unit, Bank for Investment and Development of Vietnam Expressway Development Company as well as the concerned agencies in Vietnam.

We also acknowledge the officials of your association, Ministry of Economy, Trade and

Industry, Japan, Japan International Cooperation Agency and other concerned Japanese agencies both in Vietnam and Japan.

We wish this report would contribute to the promotion and realization of the Project.

Very Truly Yours,

Tetsuya MAEDA Team Leader/Implementation Planner Preliminary Study on Trung Luong - My Thuan - Can Tho Expressway Construction Project

Legend

:::

North-South Expressway (Eastern Route, before Operation)Southern Regional Expressway (before Operation)Southern Regional Expressway (after 2020)

::::

National BoundaryProvincial BoundaryMekong River Delta AreaNorth-South Expressway (Eastern Route, under Operation)

Study Title: Preliminary Study on Trung Luong - My Thuan - Can Tho Expressway Construction Project

HCMC Ring Road No.3 (before Operation)HCMC Ring Road No.4 (before Operation)National Highway No.1 (Existing)

:::

Ca Mau

Kien Giang

An Giang

Soc Trang

Bac Lieu

Tra Vinh

Ben Tre

Dong Thap

Tien Giang Province

Cambodia

Hau Giang

Can Tho City

Long AnHCMC

Bien Hoa

Vung Tau

An Lac

Trung Luong2nd My Thuan Bridge

My Thuan Bridge

Can Tho Bridge

2nd Can Tho Bridge

Province

ProvinceProvince

Province

Province

Province

Province

Province

Province

Province

(after 2020)Vinh LongProvince

(under promotion by METI)

Thi Vai - Cai MepInternational Port

Trung Luong - My Thuan - Can Tho Expressway(Study Section, L = 78.8 km excl. 2nd My Thuan Bridge)

SCALE0 20 40 60 km

Vietnam

Laos

Cambodia

Thailand

Hanoi

HCMC

China

PPrroojjeecctt LLooccaattiioonn MMaapp

Preface Letter of Transmittal Project Location Map

TTaabbllee ooff CCoonntteennttss

Executive Summary List of Tables List of Figures Abbreviations Executive Summary

MMaaiinn RReeppoorrtt

Chapter 1 Background of the Study........................................................................................... 1-1

1.1 Background of the Project................................................................................. 1-1 1.2 Current Situation of the Project......................................................................... 1-2 1.3 Related Strategy and Policy of Japanese Government ...................................... 1-3 1.4 Objective of the Study....................................................................................... 1-4

Chapter 2 Outline of the Study .................................................................................................. 2-1 2.1 Scope of the Study ............................................................................................ 2-1 2.2 Study Area......................................................................................................... 2-1 2.3 Organization of the Study ................................................................................. 2-2 2.4 Study Schedule.................................................................................................. 2-2 2.5 Cooperation with Related Studies ..................................................................... 2-3

Chapter 3 Related Policies and Development Plan ................................................................... 3-1 3.1 Administration and Planning System in Vietnam ............................................. 3-1 3.2 Related Policies and Development Plan in Vietnam......................................... 3-2 3.3 Recommendations............................................................................................. 3-7

Chapter 4 Preliminary Study on My Thuan - Can Tho Expressway Construction Project........ 4-1 4.1 Present Situation of the Project ......................................................................... 4-1 4.2 Outline of the Existing Feasibility Study .......................................................... 4-1 4.3 PPP Scheme proposed by MOT........................................................................ 4-3 4.4 PPP Scheme examined by the Study Team ....................................................... 4-7 4.5 Recommendations............................................................................................. 4-8

Chapter 5 Preliminary Study on Trung Luong - My Thuan Expressway Construction Project. 5-1 5.1 Present Situation of the Project ......................................................................... 5-1 5.2 Outline of the Existing Feasibility Study .......................................................... 5-1 5.3 Outline of the Existing BOT Scheme................................................................ 5-3 5.4 Consideration to the Existing BOT Scheme and Possibility of PPP Scheme ... 5-6 5.5 Recommendations............................................................................................. 5-6

Chapter 6 Overall Recommendations ........................................................................................ 6-1

AAppppeennddiixx

A. Reference Materials B. Meeting Memo C. Draft Terms of Reference

EExxeeccuuttiivvee SSuummmmaarryy ((JJaappaanneessee))

LLiisstt ooff TTaabblleess

Table 1-1 Outline of the Expressway Network Development Master Plan............................... 1-1 Table 1-2 Detailed Plan of the North-South Expressway (Eastern) .......................................... 1-1 Table 1-3 Present Situations of the 3 Projects........................................................................... 1-2 Table 2-1 Scope of the Study .................................................................................................... 2-1 Table 2-2 Vietnamese Counterparts of the Study ...................................................................... 2-2 Table 2-3 Members of the Study Team ..................................................................................... 2-2 Table 2-4 Schedule of the Site Survey in Vietnam.................................................................... 2-3 Table 3-1 List of Major Industrial Parks around HCMC and Mekong River Delta Area ......... 3-3 Table 3-2 Price of Long Term Leasing Trend for Industrial Parks............................................ 3-4 Table 3-3 Model Case Assessment of 100 ha Industrial Development ..................................... 3-4 Table 3-4 List of Expressway Network Project......................................................................... 3-6 Table 4-1 Outline of the F/S...................................................................................................... 4-1 Table 4-2 Risk Allocation of the Project examined by the Study Team (Assumption) ............. 4-8 Table 5-1 Outline of the F/S...................................................................................................... 5-1

LLiisstt ooff FFiigguurreess

Figure 1-1 Location of the 3 Projects ......................................................................................... 1-2 Figure 1-2 Framework of the New Growth Strategy .................................................................. 1-3 Figure 1-3 Example Supports Menu for Expressway Projects by

the Deployment of Integrated Infrastructure Systems in Vietnam ............................ 1-4 Figure 2-1 Study Area................................................................................................................. 2-1 Figure 2-2 Overall Schedule of the Study................................................................................... 2-2 Figure 3-1 Administrative Structure in Vietnam......................................................................... 3-1 Figure 3-2 Planning System in Vietnam ..................................................................................... 3-1 Figure 3-3 Expressway Network Development Plan.................................................................. 3-5 Figure 4-1 Typical Cross Section................................................................................................ 4-2 Figure 4-2 Route Plan of the My Thuan - Can Tho Expressway................................................ 4-2 Figure 4-3 Organization Chart of Cuu Long CIPM Group......................................................... 4-3 Figure 4-4 Implementation Structure of

the My Thuan - Can Tho Expressway Construction Project..................................... 4-6 Figure 5-1 Typical Cross Section................................................................................................ 5-2 Figure 5-2 Route Plan of the Trung Luong - My Thuan Expressway......................................... 5-2 Figure 5-3 Organization Chart of BEDC .................................................................................... 5-4

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ADB : Asian Development Bank B/C : Benefit/Cost Ratio BEDC : BIDV Expressway Development Company BIDV : Bank for Investment and Development of Vietnam BITEXCO : Binh Minh Import-Export Co BOT : Build-Operate-Transfer BT : Build-Transfer CIPM : Corporation for Investment, Development and Project Management of Transport Infrastructure D/D : Detailed Engineering Design DPI : Department of Planning and Investment DRVN : Directorate for Roads of Vietnam ECFA : Engineering and Consulting Firms Association, Japan EIA : Environment Impact Assessment EIRR : Equity Internal Rate of Return EOJ : Embassy of Japan EPC : Engineering, Procurement and Construction ETC : Electronic Toll Collection FDI : Foreign Direct Investment FIRR : Financial Internal Rate of Return F/S : Feasibility Study GDP : Gross Domestic Product GOJ : Government of Japan GOV : Government of Vietnam GRDP : Gross Regional Domestic Product HCMC : Ho Chi Minh City IC : Interchange IZ : Industrial Zone JBIC : Japan Bank for International Cooperation JETRO : Japan External Trade Organization JICA : Japan International Cooperation Agency JSC : Joint Stock Company METI : Ministry of Economy, Trade and Industry, Japan MLIT : Ministry of Land, Infrastructure, Transport and Tourism, Japan MOC : Ministry of Construction MOF : Ministry of Finance MOJ : Ministry of Justice MONRE : Ministry of Natural Resources and Environment MOT : Ministry of Transport MOU : Memorandum of Understanding MPI : Ministry of Planning and Investment NEXCO : Nippon Expressway Company Limited NEXI : Nippon Export and Investment Insurance NH : National Highway NIURP : National Institute of Urban and Rural Planning

NPV : Net Present Value OCR : Ordinary Capital Resources ODA : Official Development Assistance O&M : Operation and Maintenance PA : Parking Area PC : People’s Committee PMU : Project Management Unit PPP : Public - Private Partnership PPTA : Project Preparation Technical Assistance SA : Service Area SPC : Special Purpose Company STEP : Special Terms for Economic Partnership TEDI : Transport Engineering Design Incorporated TOR : Terms of Reference USD : United States Dollar VEC : Vietnam Expressway Corporation VGF : Viability Gap Funding VND : Vietnamese Dong VITRANSS2 : The Comprehensive Study on the Sustainable Development of Transport System in Vietnam WB : World Bank

PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt EExxeeccuuttiivvee SSuummmmaarryy

PPaaggee SS--11

EExxeeccuuttiivvee SSuummmmaarryy

SS--11 BBaacckkggrroouunndd aanndd OObbjjeeccttiivvee ooff tthhee SSttuuddyy Currently, GOV carries forward with the expressway network development program to meet

the increase of road traffic demand by rapid economic growth in the country. However, most of the on-going expressway projects depend on the financing by the Development Assistance Agencies, and the counterpart funds strain the state finance. Accordingly, GOV expects to utilize private funds in future expressway projects.

On the other hand, GOJ decided the New Growth Strategy dated on June 18, 2010 to achieve economic growth by creating new demand and employment, and attaches importance to expansion of growth opportunity through contributing to development of Asian region. One of the prioritized projects in the Strategy is the Promotion of Deployment of Integrated Infrastructure Systems to Asian countries by PPP scheme, and GOJ has established a framework for strenuously supporting the initiatives of Japanese private companies.

The North-South Expressway (Eastern) was prioritized in the present expressway network development master plan (Decision No.1734/QD-TTg), and its detailed plan was approved by the Prime Minister in Decision No.140/QD-TTg dated on January 21, 2010. The Trung Luong - My Thuan - Can Tho Expressway was planned to develop before 2015 by BOT scheme.

In consideration of the situations above, ECFA decided to conduct the Preliminary Study on Trung Luong - My Thuan - Can Tho Expressway Construction Project to promote as the PPP scheme projects. At present, the Project is divided into the three projects below, and the Second My Thuan Bridge Construction Project is under promotion by METI as the Special Terms for Economic Partnership scheme; therefore, our study subjected to the other two projects.

Trung Luong - My Thuan Expressway Construction Project (BOT scheme by BEDC)

Second My Thuan Bridge Construction Project (under promotion by METI)

My Thuan - Can Tho Expressway Construction Project (PPP scheme by Cuu Long CIPM)

SS--22 OOuuttlliinnee ooff tthhee SSttuuddyy

The Study Team carried out the study from December 2010 to March 2011 based on the following scope of the Study.

Confirmation of the Background and Current Situation of the Project

Confirmation and Examination of PPP Scheme of the Project

Preparation of the Study Report

The Study area covered the Trung Luong - My Thuan and My Thuan - Can Tho Expressways, and the city/provinces along the Expressways.

SS--33 RReellaatteedd PPoolliicciieess aanndd DDeevveellooppmmeenntt PPllaann

According to the related policies and development plan such as current 10-year strategy and 5-year plan of Socio-economic Development Plan, development of infrastructures and industries in the Mekong River Delta area is expected from now on taking into accounts of potential as a national focal economic zone and reduction of social inequalities, and the Trung Luong - My Thuan - Can Tho Expressway has an important role to facilitate socio-economic development in the area as economic belt between the commercial capital of HCMC and Can Tho city.


PPaaggee SS--22

SS--44 PPrreelliimmiinnaarryy SSttuuddyy oonn MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt

((11)) PPPPPP SScchheemmee pprrooppoosseedd bbyy MMOOTT

((aa)) EEssttaabblliisshhmmeenntt ooff CCuuuu LLoonngg CCIIPPMM GGrroouuppss On May 19, 2010, MOT submitted the Statement No.3183/BGTVT-TCCB to the Prime

Minister on establishment of Cuu Long CIPM as a key enterprise for management, investment and development, and operation organization for the southern economic zone in order to fulfill development requirements of transport infrastructure. The decision by the Prime Minister is expected to issue in 1st Quarter of 2011.

((bb)) PPPPPP SScchheemmee pprrooppoosseedd bbyy MMOOTT Based on the above Statement and interview with PMU My Thuan, the planned PPP scheme

for the My Thuan - Can Tho Expressway Construction Project were confirmed:

Cuu Long CIPM establishes a SPC for the Project

Capital resources of the SPC are expected from the State for the equity portion by 30% of the total investment which utilizes an ADB OCR loan. In addition, 30% of the total investment is capitalized from Cuu Long CIPM’s own charter capital, as well as, re-lending by the State from un-used portion of the OCR loan, and mortgage loan from lenders. The remainder is expected to be financed by the other investors.

((22)) PPPPPP SScchheemmee eexxaammiinneedd bbyy tthhee SSttuuddyy TTeeaamm Main issues on the proposed PPP scheme were recognized by the Study Team as follows:

Network Risk: ADB also concerns the unclear situation in the Trung Luong - My Thuan Expressway Construction Project which affects the ADB’s financing to the Project.

Security Package: It is necessary to establish a viable SPC and make it structure bankable to obtain incentives and supports from GOV such as buy-out clause, tax exemption, etc.

Profitability: It is necessary to confirm some of conditions in the existing F/S relating to profitability such as pre-conditions for traffic demand forecast, consideration of widening cost and a long pay-back period, etc.

Government Guarantee: It is necessary to confirm the risk allocation between public and private, and necessary support menu by GOV to mitigate the risks of private sector.

SS--55 PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt

((11)) OOuuttlliinnee ooff tthhee EExxiissttiinngg BBOOTT SScchheemmee

((aa)) OOuuttlliinnee ooff BBEEDDCC On November 24, 2007, BIDV and some Vietnamese companies established the BIDV

Expressway Development Company (BEDC), and obtained the BOT concession of the Trung Luong - My Thuan - Can Tho Expressway Construction Project. However, lack of the investment funds, the Second My Thuan Bridge and the My Thuan - Can Tho section were transferred to PMU My Thuan in May 2009 (Announcement No.137/TB-VPCP and Decision No.1318/QD-BGTVT).

On the other hand, BEDC was approved to obtain the O&M concession of the HCMC - Trung Luong Expressway (25 years) by the Prime Minister in his letter No.1625/TTg-KTN dated on September, 2009. The concession price is about VND10,000 billion, and repay it in 3 years.

Based on the Business Registration Certificate (No.4103008500) issued by DPI in HCMC, BEDC is allowed some business fields such as construction and provision of services in industrial zone and urban zone, and trade real estate and power energy, etc. other than proper expressway business.


PPaaggee SS--33

((bb)) OOuuttlliinnee ooff tthhee EExxiissttiinngg BBOOTT SScchheemmee At present, BEDC plans to establish the capital structure of the BOT concession of the Trung

Luong - My Thuan Expressway and the O&M concession of the HCMC - Trung Luong Expressway (total Project cost: VND 28,888 billion) consisting of charter capital by 10% of the total Project cost and remaining 90% through ODA, construction bond, etc. The Prime Minister decided to provide the government supports to improve the profitability of the Project as follows:

Toll collection right at the existing My Thuan Bridge on NH1A

Exclusive right to exploit services, infrastructure and advertising sales along the Project

Exemption from land use fees for a lent land during the implementation period

Toll collection right on NH1A section from Binh Chanh - Trung Luong

((cc)) IInntteennttiioonn ooff BBEEDDCC The intention of BEDC for the Project was confirmed by the interview as follows:

BEDC expects supports from JICA such as study for PPP scheme, funding arrangement to the Project, and training of BEDC’s staff to achieve skills of O&M activity.

BEDC is inviting investors and financiers with conditions of minimum term 12 years plus a grace period of 3 years, competitive interest rate and loans guarantee by GOV.

((22)) CCoonnssiiddeerraattiioonn ttoo tthhee EExxiissttiinngg BBOOTT SScchheemmee aanndd PPoossssiibbiilliittyy ooff PPPPPP SScchheemmee Main issues on the existing BOT scheme were recognized by the Study Team as follows:

10% of equity ratio is low to relieve private investors, and 30% are necessary at least. Total Project cost (VND28,888 billion) is huge to implement by private investments. Two compositions are existed in One Project, then, the implementation structure and cash

flow of the Project are complicated. Some of conditions in the existing BOT scheme are not certain relating to profitability

such as pre-conditions for traffic demand forecast, consideration of widening cost, financial return of the given rights and a long pay-back period, etc.

SS--66 RReeccoommmmeennddaattiioonnss

The Study Team recommends the followings based on the Study result.

My Thuan - Can Tho Expressway Construction Project is recommended to implement by the PPP scheme proposed by MOT taking into considerations of establishment of Cuu Long CIPM and scheduled ADB’s PPTA for examination of possibility of PPP scheme.

Trung Luong - My Thuan Expressway Construction Project is recommended to utilize the JICA PPP F/S to study the possibility and suitable type of PPP scheme.

Regional Industrial Development Plan for the provinces alongside the Trung Luong - My Thuan - Can Tho Expressway is recommended to formulate so that development of the Expressway performs harmoniously together with regional industrial development and the traffic is not bypass the provinces alongside the Expressways, which might lead to increase of traffic volume on the Expressway and contribute profitability of the Project.

MMaaiinn RReeppoorrtt

CChhaapptteerr 11 BBaacckkggrroouunndd ooff tthhee SSttuuddyy

PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt CChhaapptteerr 11

PPaaggee 11--11

11 BBaacckkggrroouunndd ooff tthhee SSttuuddyy 11..11 BBaacckkggrroouunndd ooff tthhee PPrroojjeecctt

Currently, GOV carries forward with the expressway network development program to meet the increase of road traffic demand by rapid economic growth in the country. However, most of the on-going expressway projects depend on the financing by the Development Assistance Agencies, and the counterpart funds strain the state finance. Accordingly, GOV expects to utilize private funds in future expressway projects.

Outline of the related expressway network development program and the priority of Trung Luong - My Thuan - Can Tho Expressway are described below. ((11)) EExxpprreesssswwaayy NNeettwwoorrkk DDeevveellooppmmeenntt MMaasstteerr PPllaann

Present expressway network development master plan was approved by the Prime Minister in Decision No.1734/QD-TTg dated on December 1, 2008. In the plan, 39 sections (5,753 km) were established and 19 sections (2,115 km) including the Trung Luong - My Thuan - Can Tho Expressway were prioritized to develop before 2020.

Outline of the expressway network development master plan is shown in Table 1-1. TTaabbllee 11--11 OOuuttlliinnee ooff tthhee EExxpprreesssswwaayy NNeettwwoorrkk DDeevveellooppmmeenntt MMaasstteerr PPllaann Route/Region Completed Before 2020 After 2020 Total

North-South Expressway (Eastern) 2 sections (70km) 9 sections (886km) 5 sections (985km) 16 sections (1,941km)

North-South Expressway (Western) 2 sections (1,321km) 2 sections (1,321km)

Northern Region 1 sections (30km) 6 sections (825km) 4 sections (244km) 11 sections (1,099km)

Central Region 3 sections (264km) 3 sections (264km)

Southern Region 1 sections (20km) 2 sections (265km) 5 sections (699km) 8 sections (984km)

Ring Road in Hanoi and Ho Chi Minh City 2 sections (139km) 1 sections (125km) 3 sections (264km)

Total 4 sections (120km) 19 sections (2,115km) 20 sections (3,638km) 43 sections (5,873km)

39 sections (5,753km)

Project Cost (billion VND) N/A 306,090 460,130 766,220

(Source: Decision No.1734/QD-TTg dated on December 1, 2008)

((22)) DDeettaaiilleedd PPllaann ooff NNoorrtthh--SSoouutthh EExxpprreesssswwaayy ((EEaasstteerrnn)) The North-South Expressway (Eastern) was prioritized in the master plan, and its detailed

plan was approved by the Prime Minister in Decision No.140/QD-TTg dated on January 21, 2010. The Trung Luong - My Thuan - Can Tho Expressway was planned to develop before 2015.

The detailed plan of the North-South Expressway (Eastern) is shown in Table 1-2. TTaabbllee 11--22 DDeettaaiilleedd PPllaann ooff tthhee NNoorrtthh--SSoouutthh EExxpprreesssswwaayy ((EEaasstteerrnn))

No. Section Length Nos Project Finance Project Status Cost (Bil.VND)

(km) of Cost Owner (Dec 2010) Short Term Medium Term Long Term

lane (Bil.VND) (-2015) (-2020) (-2030)

1 Phap Van - Cau Gie (Widening) 30 6 1,350 N/A VEC F/S 1,350

2 Cau Gie - Ninh Binh 50 6 9,650 SB,CB VEC U/C 9,650

3 Ninh Binh - Thanh Hoa (Nghi Son) 121 6 25,289 PPP(WB) PMU1/DRVN F/S 25,289

4 Thanh Hoa - Ha Tinh (Hong Ling) 97 4-6 19,852 N/A PMU1/DRVN F/S 19,852

5 Ha Tinh - Quang Binh (Bung) 145 4 25,362 N/A N/A PF/S 10,145 15,217

6 Quang Binh - Quang Tri (Cam Lo) 117 4 12,051 N/A N/A PF/S 4,820 7,231

7 Quang Tri - Da Nang (Tuy Loan) 182 4 24,591 N/A N/A PF/S 24,591

8 Da Nang - Quang Ngai 130 4-6 25,035 ODA(WB/JICA) PMU85/VEC F/S 25,035

9 Quang Ngai - Binh Dinh 170 4 29,750 N/A N/A PF/S 29,750

10 Binh Dinh - Nha Trang 215 4 35,905 N/A N/A PF/S 35,905

11 Nha Trang - Phan Thiet 226 4 35,708 N/A N/A PF/S 15,870

12 Phan Thiet - Dau Giay 98 4-6 16,170 BOT BITEXCO F/S 16,170

13 Dau Giay - Long Thanh 43 6-8 16,340 ODA(ADB/JICA) VEC U/C 16,340

14 Long Thanh - Ben Luc 58 6-8 22,620 ODA(ADB/JICA) VEC D/D 18,096 4,524

15 Ben Luc - Trung Luong (Widening) 37 8 14,970 BOT BEDC U/C 14,970

16 Trung Luong - My Thuan - Can Tho 92 6 26,700 BOT BEDC F/S 26,700

Total 1,811 341,343 187,972 130,923 22,448

Notes: F/S = Feasibility; PF/S = Pre-feasibility Study; D/D = Detailed Engineering Design; U/C = Under Construction, SB = State Budget; CB = Construction Bond; ODA = Official Development Assistance; BOT = Build-Operate-Transfer

(Source: Decision No.140/QD-TTg dated on January 21, 2010)


PPaaggee 11--22

11..22 CCuurrrreenntt SSiittuuaattiioonn ooff tthhee PPrroojjeecctt On November 24, 2007, BIDV and some Vietnamese companies established the BIDV

Expressway Development Company (BEDC), and obtained the BOT concession of the Trung Luong - My Thuan - Can Tho Expressway Construction Project.

However, lack of the investment funds, the Second My Thuan Bridge and the My Thuan - Can Tho section were transferred to PMU My Thuan in May 2009. This was formalized through the Prime Minister’s Announcement No.137/TB-VPCP dated on April 24, 2009 and MOT’s Decision No.1318/QD-BGTVT dated on May 18, 2009. At present, the Project is divided into the 3 projects.

The present situations of the 3 projects and the location map of the 3 projects are shown in Table 1-3 and Figure 1-1 respectively.

TTaabbllee 11--33 PPrreesseenntt SSiittuuaattiioonnss ooff tthhee 33 PPrroojjeeccttss Item Trung Luong - My Thuan Expressway Second My Thuan Bridge My Thuan Can Tho Expressway

Project Length 54.3 km 4.05 km 3) 24.5 km

Executive Agency/Owner BEDC PMU My Thuan PMU My Thuan

Project Scheme BOT Planning Japanese ODA (STEP) Planning PPP

Present Status (Feb. 2011) Under D/D Completed Pre-F/S (METI Study) Completed F/S

F/S Approved 1) Not prepared yet Waiting for MOT approval

EIA Approved 2) Not prepared yet Approved 2)

Completion Year 2014 2016 3) 2015 4)

(Source: 1) MOT Decision No.343/QD-BGTVT dated February 4, 2008, 2) MONRE Decision No.2140/QD-TNMT dated on October 27, 2008, 3) METI Study Report February 2011, 4) Prime Minister Decision No.140/QD-TTg dated on January 21, 2010)

Ca Mau

Kien Giang

An Giang

Soc Trang

Bac Lieu

Tra Vinh

Ben Tre

Dong Thap

Tien Giang Province

Cambodia

Hau Giang

Can Tho City

Long An

HCMC

Bien Hoa

Vung Tau

An Lac

Trung Luong

2nd My Thuan Bridge

My Thuan Bridge

Can Tho Bridge

2nd Can Tho Bridge

Province

Province

Province

Province

Province

Province

Province

Province

Province

Province

(after 2020)Vinh LongProvince


Trung Luong - My ThuanExpressway

My Thuan - Can ThoExpressway

SCALE0 20 40 60 km

Legend: National Boundary

: Provincial Boundary

: Mekong River Delta Area

: North-South Expressway (Eastern, under Operation)

: North-South Expressway (Eastern, before Operation)

: Southern Regional Expressway (before Operation)

: Southern Regional Expressway (after 2020)

: HCMC Ring Road No.3 (before Operation)

: HCMC Ring Road No.4 (before Operation)

: National Highway No.1 (Existing)

(Source: Study Team)

FFiigguurree 11--11 LLooccaattiioonn MMaapp ooff tthhee 33 PPrroojjeeccttss


PPaaggee 11--33

11..33 RReellaatteedd SSttrraatteeggyy aanndd PPoolliiccyy ooff JJaappaanneessee GGoovveerrnnmmeenntt

((11)) CCoouunnttrryy AAssssiissttaannccee PPllaann ffoorr VViieettnnaamm GOJ has been formulated the Country Assistance Plan for Vietnam (July 2009) in accordance

with the Japanese ODA Charter. In the plan, it is described that GOJ provides strong support to the socio-economic development and focus on transport infrastructure development for accelerating the economic development based on the 10 Year Socio-economic Development Strategy and its 5 Year Medium Term Plan. In particular, since cooperation to the North-South Expressway was agreed at the summit between Vietnam and Japan in November 2006, Japanese ODA loans has been initiated for several projects of the North-South Expressway.

For implementation of the infrastructure development, it is stated that PPP scheme projects should be promoted in order to tale full advantage of the technology, knowledge and resources possessed by the Japanese private sector. Especially, not only the promotion of participation of the private sector to ODA loan projects but also the promotion of PPP scheme projects has been set in the infrastructure development.

((22)) NNeeww GGrroowwtthh SSttrraatteeggyy GOJ decided the New Growth Strategy dated on June 18, 2010 to achieve a strong economy,

stable demand and jobs both domestic and overseas, establishment of economic structure that enables wealth to be widely circulated, and strengthening the competitiveness of Japanese industry.

Asian Economic Strategy is situated as one of the 7 strategic areas, and attaches importance to expansion of growth opportunity through contributing to development of Asian region. Deployment of Integrated Infrastructure Systems to Asian countries under the Asian Economic Strategy is one of the 21 national strategic projects, and aims to promote not only participation of the private sector to ODA loan projects but also the promotion of PPP infrastructure projects including financing and O&M etc. as one package.

The framework of the new growth strategy and the example supports menu for expressway projects by the deployment of integrated infrastructure systems in Vietnam are shown in Figures 1-2 and 1-3 respectively.

4. Tourism-oriented nation & local revitalization: 4 projects

2. Health (Life Innovation): 2 projects

1. Environment (Green innovation): 3 projects

5. Science-and-technology IT oriented nation: 3 projects

6. Employment & human resources: 3 projects

7. Financial Sector: 1 project

7 Strategic Areas

21 National Strategic Projects

- Deployment of Integrated infrastructure Systems

- Reducing the effective corporate tax rate and promotion of Japan as an Asian industrial center- Fostering global talents and increasing acceptance of highly-skilled personnel- Strategies for intellectual property and standardization and exporting Cool Japan- Economic partnership strategy through Free Trade Area of the Asia-Pacific（FTAAP）

3. Asia: 5 projects

Opening New Frontiers

3. Asia

4. Tourism-oriented nation

& local revitalization

Manifesting Strengths

2. Helth

(Life Innovation)

1. Environment

(Green innovation)

Creating New Demand and

Platforms to Support Growth

5. Science-and-technologyIT oriented nation

7. Financial Sector

6. Employment &human resources

(Source: The New Growth Strategy dated on June 18, 2010)

FFiigguurree 11--22 FFrraammeewwoorrkk ooff tthhee NNeeww GGrroowwtthh SSttrraatteeggyy


PPaaggee 11--44

Policy Dialogue

Promotion of "Infrastructure-Package Export Stimulation"by Policy Dialogue betweenMLIT and Vietnamese MOT

Loan Assistance

Project Formation for STEP

Loan incl. O&M during init ialperiod

Expressway(Bridge, Tunneletc.)

Public Fund Private FundCase of "Vertical Separation Structure"

Technical

Preparatory Survey Schemefor PPP Infrastructure,Projects Capacity Building

Private Company'sExpertise and Fund

Japanese Technology,experience and knowledge,Investment from Private

Guarantee and Insurance Menufrom JBIC, NEXI etc.

O&M

Preparation of O&M Manual,Assignment of Experts

JICA's Private SectorInvestment Finance (underconsideration)

Expand Support Menu forrelated system, planning,development and O&M

Construction

SA/PA

TrafficControl

ETC

(Source: Material of PPP Workshop, Ministry of Land, Infrastructure, Transport and Tourism, Japan)

FFiigguurree 11--33 EExxaammppllee SSuuppppoorrttss MMeennuu ffoorr EExxpprreesssswwaayy PPrroojjeeccttss bbyy tthhee DDeeppllooyymmeenntt ooff IInntteeggrraatteedd IInnffrraassttrruuccttuurree SSyysstteemmss iinn VViieettnnaamm

11..44 OObbjjeeccttiivvee ooff tthhee SSttuuddyy

The objective of the Study is to promote the Trung Luong - My Thuan and My Thuan - Can Tho Expressway Construction Projects applying PPP scheme as potential projects for the Deployment of Integrated Infrastructure Systems.

CChhaapptteerr 22 OOuuttlliinnee ooff tthhee SSttuuddyy


PPaaggee 22--11

22 OOuuttlliinnee ooff tthhee SSttuuddyy

22..11 SSccooppee ooff tthhee SSttuuddyy The scope of the Study is shown in Table 2-1.

TTaabbllee 22--11 SSccooppee ooff tthhee SSttuuddyy Item Contents

(1) Confirmation of the Background and

Current Situation of the Project

+ Related policies and development plan

+ Related strategy and policy of Japanese Government

+ Existing Project documents

+ Site survey

(2) Confirmation and Examination of

PPP Scheme of the Project

+ Confirmation of laws relating private investment on expressway projects in Vietnam

+ Confirmation of PPP scheme proposed by PMU My Thuan and BEDC, especially

Project implementation structure

+ Examination of applicable PPP scheme of the Project

+ Confirmation of intentions of the Project owner and donor

+ Confirmation of issues of the Project and preparation of the draft TOR to the next step

(3) Preparation of the Study report + Preparation and submission of the Study report


22..22 SSttuuddyy AArreeaa The Study area covers the Trung Luong - My Thuan and My Thuan - Can Tho Expressways,

and the city/provinces along the Expressways including Long An, Dong Thap, Tien Giang, Vinh Long Provinces and Can Tho City as shown in Figure 2-1.

: Provincial Border

: Mekong River Delta Area

: North-South Expressway (Eastern, under Operation)

: North-South Expressway (Eastern, before Operation)

: Southern Regional Expressway (before Operation)

: Southern Regional Expressway (after 2020)

:

:

:

10. Hau Giang

11. Soc Trang

12. Bac Lieu

13. Ca Mau

04. Ben Tre

03. Tien Giang

02. Dong Thap

01. Long An

09. Kien Giang

08. Can Tho

07. An Giang

06. Tra Vinh

HCMC Ring Road No.4 (before Operation)

Population (000) GDP (Mil.USD) GDP/Capita (USD)

1,439

1,668

1,674

1,098

985

1,134

1,256

1,030

1,004

2,149

1,190

1,688

758

1,293

858

1,207

17,214

794

710

569

1,668

1,334

1,452

439

584

664

536

741

831

1,139

840

543

638

674

982

813

785

HCMC Ring Road No.3 (before Operation)

National Highway No.1 (Existing)

12,670

763

585

651

714

05. Vinh Long

Total

Legend

Statistics in Mekong River Delta Area (General Statistical Office)Province/City

13. Ca Mau Province

9. Kien Giang Province

7. An Giang

5. Vinh Long Province

11. Soc Trang Province

12. Bac Lieu Province

6. Tra Vinh Province

4. Ben Tre Province

2. Dong Thap Province

3. Tien Giang Province

Cambodia

10. Hau Giang Province

8. Can Tho City

1. Long An Province

HCMC

Bien Hoa

Vung Tau

An Lac

Trung Luong

SecondMy Thuan Bridge

Can Tho Bridge

My Thuan Bridge

Second Can Tho Bridge


Trung Luong - My Thuan Expressway(Project Length = 54.3 km)

My Thuan - Can Tho Expressway(Project Length = 24.5 km)

Study Areaalong the Expressways


FFiigguurree 22--11 SSttuuddyy AArreeaa


PPaaggee 22--22

22..33 OOrrggaanniizzaattiioonn ooff tthhee SSttuuddyy ((11)) CCoouunntteerrppaarrtt iinn VViieettnnaamm

Vietnamese counterparts of the Study are shown in Table 2-2. TTaabbllee 22--22 VViieettnnaammeessee CCoouunntteerrppaarrttss ooff tthhee SSttuuddyy

Project Vietnamese Counterpart

Trung Luong - My Thuan Expressway Construction Project BIDV Expressway Development Company (BEDC)

My Thuan - Can Tho Expressway Construction Project My Thuan Projects Management Unit (PMU My Thuan) (Source: Study Team)

((22)) SSttuuddyy TTeeaamm

The members of the Study Team are shown in Table 2-3. TTaabbllee 22--33 MMeemmbbeerr ooff tthhee SSttuuddyy TTeeaamm

Position Name Company

Team Leader/Implementation Planner Tetsuya MAEDA Nippon Koei Co., Ltd.

Deputy Team Leader/Expressway Specialist Shimpei IMADA

Regional Development Planner Koji YAMADA

PPP Specialist Yoshimori KANDA Sojitz Co., Ltd. (Source: Study Team)

22..44 SSttuuddyy SScchheedduullee ((11)) OOvveerraallll SScchheedduullee

The Study period was approximately 3 months from December 1, 2010 to March 10, 2011, and divided into three phases with the following objectives:

1. Preparation Study in Japan: (Dec. 1, 2010 - Jan. 11, 2011)

To collect basic information regarding private investment on expressway projects in Vietnam, preliminary study on PPP scheme, and prepare site study plan

2. Site Study in Vietnam: (Jan. 12, 2011 - Jan. 20, 2011)

To explain the preliminary study results and exchange opinions with concerned agencies, and conduct site survey

3. Analysis and Reporting in Japan: (Jan. 21, 2011 - Mar. 11, 2011)

To examine PPP scheme on the project and reporting

The overall schedule of the Study is shown in Figure 2-2.

2010

December January February March Study Phase

1. Preparation Study in Japan2. Site Study in Vietnam 3. Analysis and Reporting in Japan

ReportSite Study ReportDraft Final ReportFinal Report

MeetingECFA

Counterparts

2011Schedule

PMU My ThuanBEDC

Site Study ReportExplanation of Site StudySchedule


FFiigguurree 22--22 OOvveerraallll SScchheedduullee ooff tthhee SSttuuddyy


PPaaggee 22--33

((22)) SSiittee SSttuuddyy iinn VViieettnnaamm The Study Team visited Vietnam and held a series of meetings with the concerned agencies.

The schedule of the site survey in Vietnam and the meeting memo are shown in Table 2-4 and Appendix B respectively.

TTaabbllee 22--44 SScchheedduullee ooff tthhee SSiittee SSuurrvveeyy iinn VViieettnnaamm Day Stay

1 12-Jan-11 Wed Hanoi All dayDeparture at Japan for VietnamNarita - Hanoi （Imada, Kanda）

09:00‐09:40 Embassy of Japan in Vietnam (EOJ)

11:00‐12:00 Central Nippon Expressway Company Limited (C-NEXCO)

15:00‐16:00 Ministry of Planning & Investment (MPI), Foreign Economic Relation Dept.09:00‐10:00 JICA Vietnam Office14:30‐16:30 Ministry of Transport (MOT), Planning & Investment Dept.

17:00‐18:00 Asia Development Bank, Transport & Investment Dept.

4 15-Jan-11 Sat HCMC All dayNarita - HCMC (Yamada)Hanoi - HCMC (Imada, Kanda)

5 16-Jan-11 Sun Can Tho All daySite Visit: HCMC-Trung Luong Expressway My Thuan - Can Tho Expressway Can Tho Bridge

08:30‐09:30 Hoa Phu Joint Stock Company

15:00‐16:00 BIDV Expressway Development Company (BEDC)

08:30‐10:30 PMU My Thuan, Economical & Technical Division

14:30-15:30 People's Committee of Vinh Long Province, Dept. of Planning & Investment

10:00-11:00 AceCook Vietnam JSC

14:00-15:00 JETRO HCMC Office

16:00-17:00 Hogan Lovells, Foreign Legal Consultant

Night HCMC - Narita (Yamada, Kanda)

9 20-Jan-11 Thu - -Arrive at Japan (Yamada, Kanda)Join to Second My ThuanBridge Study Team (Imada)

8 19-Jan-11 Wed NightFlight

HCMC

7 18-Jan-11 Tue HCMC

6 17-Jan-11 Mon

3 14-Jan-11 Fri Hanoi

Date Itinerary

2 13-Jan-11 Thu Hanoi


22..55 CCooooppeerraattiioonn wwiitthh RReellaatteedd SSttuuddiieess

The Study was conducted taking into consideration of consistency with the JICA Study on Measuring the Possibility of Private Investments in Expressway Project in Southern Vietnam, which has been conducting simultaneously with the Study. JICA agreed at the meeting on the site study report in attendance with ECFA, JICA and METI on February 10, 2011 that the interim report of the JICA Study could be referred to in this report.

CChhaapptteerr 33 RReellaatteedd PPoolliicciieess aanndd DDeevveellooppmmeenntt PPllaann


PPaaggee 33--11

33 RReellaatteedd PPoolliicciieess aanndd DDeevveellooppmmeenntt PPllaann

33..11 AAddmmiinniissttrraattiioonn aanndd PPllaannnniinngg SSyysstteemm iinn VViieettnnaamm

((11)) AAddmmiinniissttrraattiioonn SSyysstteemm Vietnam has a three-tiered government system comprising provinces (1st level in

administrative terms; provinces and centrally-controlled cities), districts (2nd level) and commune (3rd level), and Figure 3-1 gives a description about the number of cities, urban districts, towns, rural districts, communes etc. for every existing administrative unit in Vietnam.

commune town commune ward sub-urban commune ward ward commune town sub-urban commune ward

Rural District (519) Town (45) City (48) Urban Dist. (47) Rural District (37) Town (1)

Province (58) City under Direct Authority of Central Government (5)

Central GovernmentCentral Gov.

Local Gov.(1st Level)

Local Gov.(2nd Level)

Local Gov.(3rd Level) (Source: “Administrative Reform in Vietnam” by Council of Local Authorities for International Relations, the number of unit from General

Statistics Office Vietnam as of 2009)

FFiigguurree 33--11 AAddmmiinniissttrraattiivvee SSttrruuccttuurree iinn VViieettnnaamm

((22)) PPllaannnniinngg SSyysstteemm MPI and MOC are the two major ministries that play an important role in socio-economic

development plan and construction plan which are two main programs related to the use of land. Figure 3-2 gives an overview of the planning system in Vietnam and formulation of socio-economic plan, construction plan and other plans at national/regional, provincial, and local levels. It is to be noted that its ‘top to down’ approach being followed and three types of plan are practiced horizontally.

(Source: "Report on the 2008 National Spatial Policy Seminar" (2009), National and Regional Planning Bureau, MLIT, Japan)

FFiigguurree 33--22 PPllaannnniinngg SSyysstteemm iinn VViieettnnaamm

((aa)) HHiieerraarrcchhyy ooff SSoocciioo--eeccoonnoommiicc DDeevveellooppmmeenntt PPllaannnniinngg SSyysstteemm The two components of the centrally-planned Vietnam Socio-economic Development Plan

are the 10-year "Socio-economic Development Strategy" and the corresponding consecutive two "5-year Socio-economic Development Plans".

The 10-year Socio-economic Policy and Strategy document formulated by the Central government provides the overall development direction of the country. The said document defines the goals to be attained within the 10-year period and how these are to be achieved, prescribes the development approaches and strategies and serves as the basis for the formulation of sector and local development plans.

From this document, sector long-term strategies such as those for transportation, energy, telecommunication and tourism are developed and 5-year Socio-economic Development Plans are formulated.


PPaaggee 33--22

Both the 10-year Strategy and 5-year Plans fall under the jurisdiction of MPI. MPI is the primary government organization delegated with the responsibility of coordinating with the relevant agencies involved in the drafting of the plans and with producing the final documents. The proposal developed by MPI is finalized after official deliberations by the government and within the Communist Party.

Under the Vietnam Socio-economic Development Plan scheme, a bottom-up mechanism is employed whereby local governments (communes, districts, and provinces) issue proposals to the higher levels of government, which are then ultimately and eventually send to MPI, where they are incorporated into the country’s overall spatial/land development policies. ((bb)) HHiieerraarrcchhyy ooff CCoonnssttrruuccttiioonn PPllaannnniinngg SSyysstteemm

Construction Plans are prepared at four levels: orientation plans (national policy), regional plans (introduced in 2005), master plans (province or city), and detailed plans (ward, industrial zone, or project) on the basis of earlier approved plans including Socio-economic Development Plans, related sector plans, infrastructural structure planning for environmental protection, regional construction plan, general construction plan, construction plan for rural areas and other developments within planned area.

In terms of administrative responsibility, MOC, or subordinated departments of construction at the province and city level, undertakes spatial planning (i.e., master, or land use plans). Most plans are prepared by NIURP or its sister organization, which are subsidiaries of MOC. Only the three largest cities have their own planning institutes. 33..22 RReellaatteedd PPoolliicciieess aanndd DDeevveellooppmmeenntt PPllaann iinn VViieettnnaamm ((11)) SSoocciioo--eeccoonnoommiicc DDeevveellooppmmeenntt PPllaann

The objective of the 10-year Strategy (2001-2010) is "to accelerate national industrialization and modernization along the socialist line and to build the foundation for the country to basically become an industrialized nation by 2020”, and to achieve this goal, “infrastructure development” is emphasized in the 5-year Plan (2006-2010). In addition, the 5-year Plan specifies the development orientation for Mekong River Delta area as a national focal economic zone with high, effective and sustainable growth rates that to promote industrialization and modernization in agriculture and rural areas, to establish a large-scale and specialized commodity-producing region, to improve the socio-cultural conditions to be in line with the national average standards.

Furthermore, the next 10-year Strategy (2011-2020) specifies the strategy to reduce social inequalities through improving current poor infrastructure that hinder the competitiveness of Vietnam and encouraging enterprises to expand business to the local area and create jobs and generate higher incomes in the local area. From now on, therefore, it is expected to develop infrastructure and industrial zones in Mekong River Delta area. ((22)) RReeggiioonnaall DDeevveellooppmmeenntt PPllaann

Until the Planning Decree was issued in early 2005, no consideration was given to regional planning i.e. there was no coordination amongst neighboring provinces. The issued decree sets out a methodology for preparation, approval and management for regional plans. Utilizing this, regional development plans for Hanoi Metropolitan Capital region and Ho Chi Minh City Metropolitan region was initiated and approved by the Prime Minister.

And, on October 9, 2009, the Prime Minister ratified the plan for Mekong River Delta area to make the region as an agricultural hub and also aims to transform it into a cultural and tourist centre. With a vision towards 2050, a new plan will turn the Mekong River Delta area into a dynamically and sustainable developed economic region with favorable conditions for investment. The scheme aims to elevate the region’s profile and build on its potential and connect it with urban economic corridors, making Can Tho city the region’s nucleus. It will also seek to harmonize relations between urban and rural areas. This plan defines the prioritized development infrastructures for the region including upgrade Can Tho airport to international standards and upgrade National Highway No.1 and waterway system, and expressway connecting Ho Chi Minh City, Can Tho city and the southernmost province of Ca Mau. However, it shall be noted that the above plan for Mekong River Delta has not concretely formulated so far.


PPaaggee 33--33

((33)) RReeggiioonnaall IInndduussttrriiaall DDeevveellooppmmeenntt PPllaann

((aa)) RReeggiioonnaall IInndduussttrriiaall DDeevveellooppmmeenntt PPllaann iinn MMeekkoonngg RRiivveerr DDeellttaa AArreeaa Although policies relating to Industrial Development were presented in 10-year Strategy of

Socio-economic Development Plan and its 5-year Plan as described in Chapter 3.2(1) and (2), regional industrial development plan which covers multiple provinces have not been prepared.

On the other hand, it seems that each provincial government are eager in attracting investment to industrial and urban zones etc. in their provinces without harmonious with upper policies and plans, and independently of other related projects including expressway project that is major logistic infrastructure.

However, those industrial projects are not progressed well as expected because regional industrial plan has not been formulated and infrastructure is not sufficient conditions though Mekong River Delta area has development potential with supported by rich production of agricultural and fish products, human resources and reasonable land price.

((bb)) PPrreesseenntt SSiittuuaattiioonn ooff IInndduussttrriiaall EEssttaattee DDeevveellooppmmeenntt iinn MMeekkoonngg RRiivveerr DDeellttaa AArreeaa According to a survey by Tokyo Mitsubishi Bank, there area 20 major industrial parks/zones

around HCMC and Mekong River Delta area as shown in Table 3-1. Out of the 20 major Industrial Park (IP)/Industrial Zone (IZ) in and around HCMC, 10 are located in Dong Nai and Ba Ria - Vung Tau Provinces, where new developments are in progress. On the other hand, there are much fewer industrial zones in Mekong River Delta area as of 2006.

TTaabbllee 33--11 LLiisstt ooff MMaajjoorr IInndduussttrriiaall PPaarrkkss aarroouunndd HHCCMMCC aanndd MMeekkoonngg RRiivveerr DDeellttaa AArreeaa Name of IP/Area/Province Distance from

HCMC (km)

Total Area (ha) Lease Hold Price(USD/m2)

South East

Linh Trung III EPZ (19) Tay Ninh 44 203 27.5

Vietnam Singapore IP I (4) Binh Duong 17 500 45

Vietnam Singapore IP II - ditto - 32 152 28

My Phuoc IP - ditto - 42 1,200 17

Amata IP (7) Đong Nai 30 362 40

Long Binh Techno Park - ditto - 30 80 40

Bien Hoa I IP - ditto - 25 335 -

Bien Hoa II IP - ditto - 25 365 -

Long Thanh IP - ditto - 44 260 30

Nhon Trach III IP - ditto - 60 688 28 - 32

Phu My I IZ (13) Ba Rịa - Vung Tau 85 651 30

Dongxuyen IZ - ditto - 120 104 30

Cai Mep IZ - ditto - 70 449 35

My Xuan A IZ - ditto - 75 301 30

Saigon High Tech Park (1) HCMC 15 100 50

Tan Thuan EPZ - ditto - 5 195 108

Linh Trung I & II EPZ - ditto - 16 124 -

Mekong River Delta

Xuen A Industrial and Residential Park (20) Long An 22 300 35 - 52

Tra Noc I & II IP (17) Can Thơ 170 225 22.5

Hung Phu 1&2 IP - Ditto - 170 35 - Note; EPZ = Export Processing Zone; IP = Industrial Park; IZ = Industrial Zone

(Source: Tokyo Mitsubishi Bank, Area Report 114, 2006)


PPaaggee 33--44

((cc)) PPPPPP SScchheemmee wwiitthh DDeevveellooppmmeenntt RRiigghhttss iinn EExxpprreesssswwaayy PPrroojjeeccttss According to Chapter 4 and 5, it is difficult to profitably run the expressway projects both the

Trung Luong - My Thuan and My Thuan - Can Tho sections with PPP scheme because revenue from the traffic is not enough to recover high project cost.

In Vietnam, there are some cases of PPP projects with development right. For case study, in this Study, a possibility of application of PPP scheme with development right to the expressway projects in Mekong River Delta area in case of industrial estate for the purpose of improvement of profitability of the project is preliminary examined as follows.

The price for long term leasing tends to be as high as USD108/m2 in the vicinity of city center of HCMC, but tends to decrease generally in parallel with the distance from the city center of HCMC. For a radius of 5 to 30 km from the city center, the average price USD40.25/m2. Outside of 30 km radius where the Mekong River Delta area is located, the average price decreases typically to USD28.75/m2 as shown in Table 3-2.

TTaabbllee 33--22 PPrriiccee ooff LLoonngg TTeerrmm LLeeaassiinngg TTrreenndd ffoorr IInndduussttrriiaall PPaarrkkss Lease Hold Price Average

(USD/m2) (USD/m2)0- 5 km 5 km Tan Thuan EPZ 108.0 108.0

15 km Saigon High Tech Park (1) 50.017 km Vietnam Singapore IP I (4) 45.022 km Xuen A Industrial and Residential Park 43.530 km Amata IP (7) 40.030 km Long Binh Techno Park 40.032 km Vietnam Singapore IP II 28.042 km My Phuoc IP 17.044 km Linh Trung III EPZ (19) 27.544 km Long Thanh IP 30.060 km Nhon Trach III IP 30.070 km Cai Mep IZ 35.075 km My Xuan A IZ 30.085 km Phu My I IZ (13) 30.0

120 km Dongxuyen IZ 30.0170 km Tra Noc I & II IP (17) 22.5

28.0

43.7

Distance from HCMC

5-30 km

30-170 km

Name of Industrial Park

(Source: Tokyo Mitsubishi Bank, Area Report 114, 2006)

A model case of an industrial estate development is assumed as the following. The Model

Case presumes the development of a typical 100 ha industrial estate nearby the expressway. According to the information obtained during the site study, a typical plot in industrial estate in this region may have a one-time concession payment price around USD30/m2. Assuming the price of USD30/m2 and saleable area of 70% of the total area, and the net profit rate of 30%, rough estimate of the net profit from this industrial estate development may be approximately USD6 million or so far.

TTaabbllee 33--33 MMooddeell CCaassee AAsssseessssmmeenntt ooff 110000 hhaa IInndduussttrriiaall DDeevveellooppmmeenntt Item Description Q'ty Unit Remarks

1 Total Area of Industrial Estate 1,000,000 m2

2 Saleable Area of Industrial Estate 700,000 m2 Saleable rate of 70% assumed.3 Unit price of IE plot consession 30 USD/m2 Based on IE price range around HCM4 Total Revenue of IE development 21,000,000 USD Item 2 x Item 35 Total Net Profit from IE development 6,300,000 USD Net profit rate of 30% assumed.



PPaaggee 33--55

In case of the My Thuan - Can Tho Expressway Project, total investment cost is estimated at VND8,495 billion (approx. USD425 million). If the total construction cost of the expressway is to be exchanged for development rights of Industrial Estates along the expressway, this will equal to more than 70 sites of the model case Industrial Estates.

From the above examination, it can be said that; PPP scheme with a large scaled development right like BT scheme is deemed to be

impractical to be applied for such high cost expressway projects in Mekong River Delta area at the present because a large number of industrial estates to be developed and sold completely is impractical for the region, which is mainly agriculture and fishery based, and the demand of and the price for a plot in an industrial estate in the region is not as high as in large metropolitan such as HCMC and Hanoi.

However, it might be considerable to apply small scaled development right to PPP scheme for improvement of profitability of the project.

((44)) EExxpprreesssswwaayy NNeettwwoorrkk DDeevveellooppmmeenntt PPllaann

The latest expressway network development master plan prepared by MOT was submitted to the government on November 5, 2007 (No.7056/TTR-BGTVT) with a planned total length of expressway network of 5,873 km. The Prime Minister approved it on December 1, 2008 and issued “Vietnam Expressway Network Development and Planning until 2020 and the view for post-2020” (DecisionNo.1734/QD-TTg) as shown in Figure 3-3 and Table 3-4. The Trung Luong - My Thuan - Can Tho Expressway is listed as one of the priority sections.

FFiigguurree 33--33 EExxpprreesssswwaayy NNeettwwoorrkk DDeevveellooppmmeenntt PPllaann



PPaaggee 33--66

TTaabbllee 33--44 LLiisstt ooff EExxpprreesssswwaayy NNeettwwoorrkk PPrroojjeeccttss Region Length No. of Project Cost

No. Name No. Name (km) Lanes (Bil.VND)

North-South Expressway 1 Eastern North-South Expressway 1 Cau Gie - Ninh Binh 50 6 9,300

in the East 2 Ninh Binh - Thanh Hoa 75 6 12,380

3 Thanh Hoa - Vinh 140 6 22,120

4 Vinh - Ha Tinh 20 4‒6 2,580

5 Ha Tinh - Quang Tri 277 4 21,610

6 Quang Tri - Da Nang 178 4 18,160

7 Da Nang - Quang Ngai 131 4 17,820

8 Quang Ngai - Quy Nhon 150 4 23,700

9 Quy Nhon - Nha Trang 240 4 24,960

10 Nha Trang - Dau Giay 378 4‒6 55,940

11 HCMC - Long Thanh - Dau Giay 55 6‒8 18,880

12 Long Thanh - Nhon Trach - Ben Luc 45 6‒8 12,340

13 HCMC - Trung Luong 40 8 13,200

14 Trung Luong - My Thuan - Can Tho 92 6 26,250

1,871 279,240

North-South Expressway 2 Western North-South Expressway 15 Doan Hung - Hoa Lac - Pho Chau 457 4‒6 53,930

in the West 16 Ngoc Hoi - Chon Thanh - Rach Gia 864 4‒6 96,770

1,321 150,700

Northern Vietnam 3 Lang Son - Bac Giang - Bac Ninh 17 Lang Son - Bac Giang - Bac Ninh 130 4‒6 12,220

4 Ha Noi - Hai Phong 18 Ha Noi - Hai Phong 105 4‒6 16,800

5 Ha Noi - Lao Cai 19 Ha Noi - Lao Cai 264 4‒6 15,580

6 Ha Noi - Thai Nguyen - Cho Moi 20 Ha Noi - Thai Nguyen 62 4‒6 4,220

21 Thai Nguyen - Cho Moi 28 4‒6 2,940

7 Lang - Hoa Lac - Hoa Binh 22 Lang - Hoa Lac 30 6 7,650

23 Hoa Lac - Hoa Binh 26 4‒6 2,550

8 Noi Bai - Ha Long - Mong Cai 24 Bac Ninh - Ha Long 136 6 19,040

25 Ha Long - Mong Cai 128 4‒6 13,820

9 Ninh Binh - Hai Phong - Quang Ninh 26 Ninh Binh - Hai Phong - Quang Ninh 160 4 13,760

1,069 108,580

Central Vietnam 10 Hong Linh - Huong Son 27 Hong Linh - Huong Son 34 4 2,450

11 Cam Lo - Lao Bao 28 Cam Lo - Lao Bao 70 4 4,900

12 Quy Nhon - Pleiku 29 Quy Nhon - Pleiku 160 4 12,000

264 19,350

Southern VIetnam 13 Dau Giay - Da Lat 30 Dau Giay - Da Lat 189 4 19,280

14 Bien Hoa - Vung Tau 31 Bien Hoa - Vung Tau 76 6 12,160

15 HCMC - Thu Dau Mot - Chon Thanh 32 HCMC - Thu Dau Mot - Chon Thanh 69 6 20,010

16 Can Tho - Ca Mau 33 Can Tho - Ca Mau 150 4 24,750

17 HCMC - Moc Bai 34 HCMC - Moc Bai 55 4‒6 7,480

18 Soc Trang - Can Tho - Chau Doc 35 Soc Trang - Can Tho–Chau Doc 200 4 24,200

19 Ha Tien - Rach Gia - Bac Lieu 36 Ha Tien - Rach Gia - Bac Lieu 225 4 27,230

964 135,110

RR System in Hanoi 20 Ring Road No.3 37 Ring road No.3 56 4‒6 17,990

21 Ring Road No.4 38 Ring road No.4 125 6‒8 34,500

RR System in HCMC 22 Ring Road No.3 39 Ring road No.3 83 6‒8 20,750

264 73,240

5,753 766,220

Route Section

Sub-total

Sub-total

Sub-total

Sub-total

Total

Sub-total

Sub-total



PPaaggee 33--77

Regarding the North-South Expressway in the Expressway Network Development Master Plan, an implementation schedule from 2010 to 2020 for 16 sections along the Eastern North-South Expressway (1,811km) is presented in “Detailed Plan of North-South Expressway in the East, Expressway from Hanoi to Can Tho Province” approved by the Prime Minister’s Decision No. 140/QD-TTg dated on January 21, 2010. In the Decision, completion year of the Trung Luong - My Thuan - Can Tho Expressway is planned in 2015 as shown in Table 1-2.

33..33 RReeccoommmmeennddaattiioonnss

((11)) RReeggiioonnaall IInndduussttrriiaall DDeevveellooppmmeenntt PPllaann aalloonnggssiiddee EExxpprreesssswwaayy According to Socio-economic Development Plan, regional development in the Mekong River

Delta area is expected as potential area from now on, and the Trung Luong - My Thuan - Can Tho Expressway has an important role to facilitate socio-economic development in this region as economic belt between the commercial capital of HCMC and Can Tho city.

However, regional development is not progressed and it is concerned negative impact due to the expressway that the traffic will bypass the provinces alongside expressways between HCMC and Can Tho City.

Therefore, it is recommended to formulate Regional Industrial Development Plan for multiple provinces alongside the expressway taking into consideration the advantage of regional characteristics and promote the regional industrial development integrated with the expressway project.

((22)) PPPPPP SScchheemmee wwiitthh DDeevveellooppmmeenntt RRiigghhttss iinn EExxpprreesssswwaayy PPrroojjeeccttss

A possibility of development right to the expressway projects under PPP scheme in Mekong River Delta area is preliminary examined from viewpoint of profitability. As the result of the examination, it might be considerable to apply small scaled development right to PPP scheme for improvement of profitability of the project.

However, it can be understood that; There are two different businesses existed and several concerned parties involved in one

project, which will make cash flow complicated.

The feasibility of both projects shall be duly evaluated and planned.

Generally, the Development Assistant Agencies tends to avoid lending to the multiple businesses.

.

CChhaapptteerr 44 PPrreelliimmiinnaarryy SSttuuddyy oonn MMyy TThhuuaann -- CCaann TThhoo

EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt


PPaaggee 44--11

44 PPrreelliimmiinnaarryy SSttuuddyy oonn MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt

44..11 PPrreesseenntt SSiittuuaattiioonn ooff tthhee PPrroojjeecctt After the changing of administration and management mission of the My Thuan - Can Tho

Expressway Project to PMU My Thuan from BOT project as described in Chapter 1.2, PMU My Thuan intends to examine the possibility of application of PPP scheme to the Project with cooperation of ADB-PPTA.

44..22 OOuuttlliinnee ooff tthhee EExxiissttiinngg FFeeaassiibbiilliittyy SSttuuddyy After the changing of administration and management mission of the My Thuan - Can Tho

Expressway Project to PMU My Thuan, MOT carried out the F/S again to update financial efficiency evaluation taking into account of PPP form. This F/S (05-TEDI-013-H.D) was carried out by TEDI and submitted to MOT for approval in June 2010. At present, MOT has not yet approved this F/S.

The outline of the F/S, the typical cross section and the route plan are shown in Table 4-1, Figures 4-1 and 4-2 respectively.

TTaabbllee 44--11 OOuuttlliinnee ooff tthhee FF//SS Item Description

Road Class Expressway A Class 120 (Design Speed: 120km/hr)

Road Length Expressway: 24.5 km, Linking Road: 7.82 km

Forecasted Traffic Volume 37,432 pcu/day (2020), 42,722pcu/day (2025), 48,759pcu/day (2030)

Nos. of Lane 4 lanes at initial stage, 6 lanes at ultimate stage (after 2030)

Road Width 25.5m for Embankment, 24.5m for Bridge (see Figure 4-1)

Bridge River Bridge (on the Expressway): 12 bridges (3,192 m)

River Bridge (on the Linking Road): 5 bridges (620 m)

Interchange Bridge (Overpass): 3 bridges (964 m)

Interchange 3 Interchanges

Major Structures

Soft ground

Treatment

24.5 km (Whole the Section)

Toll Gate 2 Toll Barriers (on Thruway), 2 Toll Gate (on Interchange Ramp-way)

SA/PA 1 PA

Traffic

Management

Operation

Systems

Toll Collection System (ETC/Manual Modes, Closed System),

Vehicle Detection System, Emergency Telephone System

Environment/Land Acquisition Area to be acquired: 216 ha (residential land 25 ha, farm land 191 ha),

Houses to be resettled: 256 houses with 15,107 m2

* based on the RAP study by PMU My Thuan

Investment Cost VND8,495 billion

(Construction Cost: 5,507, Land Acquisition/Resettlement: 481, Consulting Service: 397, etc.)

O&M Cost Maintenance Cost: VND3,963 billion (30 years)

Operation & Management Cost: VND4,774 billion (30 years)

Economic Evaluation EIRR: 12.32%, NPV: VND290 billion, B/C: 1.03

Financial Evaluation FIRR: 9.04%, NPV: VND169,420 billion, B/C: 1.03

* Investment capital 30% from the state 70% from private sector

* Toll rate 1,000VND/km

* Subject to profit VND210 billion/year in 25 years from preferential projects

* Operation Period: 30 years (Source: MOT F/S)


PPaaggee 44--22

12.75

11.25

2X3.75=7.500.75

1.00

Excavation

3.00

1.00

1.00

Existing Ground

Finished Grade

3.00 2X3.75=7.50

11.25

25.50

12.75

1.00

1.00

Varies 0.75

Coheseve Capping Layer

ConcreteBlock Median

3.75

Final PhaseBoundary

3.75Guardrail

i) Embankment Section

1000

1220

7502x 3750=75003000500

12250

675 4x 2440=9760

t im t u y Õn

2%

1220

750 2x 3750=7500 3000 500

12250

6754x 2440=9760

2%

24440

9300

1000 3x 3000=9000 100011000 100

3500 4000 3500

100

d = 1mk h o an n h å i

10003x 3000=9000100011000100

350040003500

100

d = 1m

8 c ä c k h o a

2000

2000Bª t « n g ®Öm

d µy 100mmBª t « n g ®Öm

d µy 100mm

ii) Bridge Section

(Source: MOT F/S)

FFiigguurree 44--11 TTyyppiiccaall CCrroossss SSeeccttiioonn

Vinh Long CityCan ThoCity

Can Tho Bridge NH1

My Thuan Bridge

Hau River

Tien River

NH54

NH80

NH53

My Thuan - Can Tho Expressway24.5km

Beginning Point(KM107+170)

End Point(KM131+670)

Tan Phu IC(KM109+262.79)

Cha Va IC(KM131+670.71)

Hoa Phu IC(KM116+668)

Parking Area(KM112+800)

Trung Luong

(Source: Study Team based on MOT F/S)

FFiigguurree 44--22 RRoouuttee PPllaann ooff tthhee MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy

24500


PPaaggee 44--33

44..33 PPPPPP SScchheemmee pprrooppoosseedd bbyy MMOOTT Several entities would be established. Amongst them, one is Cuu Long CIPM Group,

including its own Units and Subsidiaries, established by MOT for development of transport infrastructure in Southern economic zone, pursuant to the proposal by PMU My Thuan. Another company is an SPC, which is to be established for implementation of the My Thuan - Can Tho Expressway Construction Project under PPP scheme. ((11)) EEssttaabblliisshhmmeenntt ooff CCuuuu LLoonngg CCIIPPMM GGrroouuppss

To fulfill development requirements of transport infrastructure approved by the Prime Minister, it is necessary to establish key enterprises for Management, Investment and Development, and Operation organization. With agreement by the Prime Minister, MOT established VEC to fulfill approved goals. After 5 years of operation, VEC has basically fulfilled the goals set by the Prime Minister and MOT.

For the Southern economic zone, there have not been any enterprises that are capable of mobilizing investment capital for transport infrastructure. Therefore, MOT ordered PMU My Thuan to study and formulate a plan for restructuring PMU My Thuan and some units in the South of MOT to form an enterprise that is capable of mobilizing investment capital for transport infrastructure, and consider proposals for each specific project for implementation organization.

Given the proposal by PMU My Thuan, MOT submitted Statement No.3183/BGTVT-TCCB to the Prime Minister in May 19, 2010 for establishing a Corporation named Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure (Cuu Long CIPM). The Prime Minister approved restructuring of PMU My Thuan into a corporation, and a decision on establishment of Cuu Long CIPM will be issued in 1st Quarter of 2011.

The charter capital of Cuu Long CIPM is VND2,580 billion, formed by following sources: existing assets of merger companies; assets in the Can Tho Bridge, the HCMC - Trung Luong Expressway (including all assets which GOV has invested in office building projects, land, workshops, transport vehicles, laboratories, but not including value of the work); revenue from the Can Tho bridge toll.

After its establishment, Cuu Long CIPM will have 3 main duties as follows: Project Management Investment and Development Operation

Charter Capital(2,580 bil VND; 100% share)( = 135 mil USD)

but should be a leader of consortiums)

Capital ( 100% share) Capital ( over 50% share)

Capital( less than 50% share,

Cuu Long CIPM(Trasfer form existing

PMU My Thuan)

2. New Subsidiary Company - SPC for My Thuan-Can Tho Ewpressway project - Other SPC for Expressway projects in Southern Vietnam

MOT

1. Subsidiary Company (Merging Exsisting Company) - Can Tho Bridge O&M co. - Road & Bridge Reparing & Maintenance No.715

The Units under Cuu Long CIPM - Vam Cong PMU - SCCP PMU - Ha Noi office representative - Can Tho office represntative

3. New Subsidiary Company - Real Estate Business, Advertisement etc,

(Source: Statement No.3183/BGTVT-TCCB, Interview with My Thuan PMU)

FFiigguurree 44--33 OOrrggaanniizzaattiioonn ooff CCuuuu LLoonngg CCIIPPMM GGrroouupp


PPaaggee 44--44

((22)) OOuuttlliinnee ooff tthhee PPPPPP SScchheemmee pprrooppoosseedd bbyy MMOOTT MOT submitted Statement No.3183/BGTVT-TCCB dated on May 19, 2010 to request the

Prime Minister to consider and allow the implementation of the project in the PPP form.

Outline of the statement is as follows:

((aa)) PPllaann ooff MMoobbiilliizziinngg RReessoouurrcceess ffoorr CCaappiittaall aanndd LLooaann

((ii)) CCaappiittaall aanndd AAsssseettss ooff CCuuuu LLoonngg CCIIPPMM MOT has applied for VND2,580 billion (about USD135 million) for Charter Capital of

Cuu Long CIMP (Source: PMU My Thuan)

Merging all assets which are currently managed by PMU My Thuan (not including value of works which the government is assigning to PMU), construction site, operation office of Can Tho bridge project; this is inscribed in charter capital

((iiii)) SSuuppppoorrtt ffoorr CCaappiittaall MMoobbiilliizzaattiioonn Applying re-lending mechanism from ODA source of the Government, from normal loans

or commercial loans of Governments, international credit organizations; from long term international bonds of the Government

Issuing domestic and international work bonds guaranteed by the Government

Accessing development credit fund of the Government for transport infrastructure projects in accordance with current regulations

ADB committed to provide an OCR loan of USD175 million (MOU signed between MPI and ADB on July 19, 2010, Source: PMU My Thuan)

((bb)) MMaajjoorr BBuussiinneessss FFiieellddss ooff CCuuuu LLoonngg CCIIPPMM GGrroouuppss Manage investment capital for transport infrastructure

Operate, accumulate and call fore investment capital sources for transport infrastructure development

Manage, operate, maintain transport infrastructures to return construction capital

Invest, manage transport infrastructure projects, natural resources exploitation and conservation projects to develop transport, social infrastructures

Organize and manage construction of transport infrastructures; financial investment

Buy, sell, transfer capital in investment projects in order to enhance efficiency of capital utilization and other investment projects

((cc)) GGrraanntt ooff RRiigghhttss ffoorr CCuuuu LLoonngg CCIIPPMM Real estate business

Advertisement business

Services on expressways

Toll collection right at the Can Tho bridge

Be a leader of investor consortium to establish a PPP enterprise for project implementation, and to coordinate in selection of investors.


PPaaggee 44--55

((dd)) RReeqquueesstt ttoo ggiivvee AAssssiiggnnmmeenntt ttoo RReelleevvaanntt AAggeenncciieess

((ii)) MMiinniissttrryy ooff FFiinnaannccee Guarantee, on behalf of the Government, foreign loans of Cuu Long CIPM (if any) for

project implementation

Guarantee payment of domestic and foreign bonds issued by Cuu Long CIPM

((iiii)) MMiinniissttrryy ooff PPllaannnniinngg aanndd IInnvveessttmmeenntt Prepare procedures to arrange ODA capital (if any) to provide re-loan for Cuu Long CIPM

in accordance with current regulations

Provide guidance, create convenient conditions in terms of procedures for foreign investors (if any) to contribute capital to the Enterprise established by Cuu Long CIPM

Coordinate in providing guidance to Cuu Long CIPM regarding implementation sequences, procedures for pilot investment project in form of PPP

((iiiiii)) MMiinniissttrryy ooff NNaattuurraall RReessoouurrcceess aanndd EEnnvviirroonnmmeenntt Provide guidance and inspection on the implementation of compensation, support for

resettlement, land clearance to make a basis for implementing site clearance and favorable conditions for Cuu Long CIPM

((iivv)) TThhee SSttaattee BBaannkk ooff VViieettnnaamm,, TThhee VViieettnnaamm DDeevveellooppmmeenntt BBaannkk Domestic commercial banks are allowed to lend excessive loans more than the prescribed

limit to Cuu Long CIPM to ensure capital for the project

Cuu Long CIPM is allowed to access development credit loans of the Government

((vv)) PPeeooppllee’’ss CCoommmmiitttteeeess ooff PPrroovviinncceess,, CCiittiieess wwhhiicchh hhaavvee tthhee PPrroojjeecctt Be in charge of land clearance for projects

Give priority of land reserve for Cuu Long CIPM or the enterprise established by Cuu Long CIPM to invest in infrastructures in urban areas, industrial parks, service areas to recover capital for the project

Create condition for Cuu Long CIPM or the enterprise established by Cuu Long CIPM to operate services along the expressway within their provinces’/cities’ boundary

((vvii)) MMiinniissttrryy ooff TTrraannssppoorrtt Be an owner of Cuu Long CIPM; responsible for establishing, appraising and negotiate

with Ministry of Finance in terms of assets; approve charters of the Corporation. Provide guidance, instruction for PMU My Thuan and relevant units to restructure into a Corporation in line with the plan approved by the PM

Take the role of a governmental competent agency which is responsible for signing and implementing transport infrastructure development contracts


PPaaggee 44--66

((ee)) IImmpplleemmeennttaattiioonn SSttrruuccttuurree ffoorr MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy PPrroojjeecctt ((AAssssuummppttiioonn)) According to “Interview with PMU My Thuan”, “Statement No.3183/BGTVT- TCCB from

MOT to the Prime Minister”, the Study Team assumes Implementation Structure as below; ((ii)) CCaappiittaall RReessoouurrcceess ooff SSPPCC ffoorr MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy PPrroojjeecctt

PMU My Thuan expects the State to participate in the equity portion by 30% of the total investment (about USD135 million). The budget of State portion is expected to be financed by ADB under OCR loan with an amount of USD175 million.

Cuu Long CIPM will contribute 30% of the total investment from its own charter capital, as well as, re-lending by the State from unused portion of OCR loan, and mortgage loan from lenders.

The remainder is expected to be financed by the other investors. ((iiii)) IImmpplleemmeennttaattiioonn SSttrruuccttuurree ffoorr MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy PPrroojjeecctt ((AAssssuummppttiioonn))

The implementation structure of the My Thuan - Can Tho Expressway Construction Project is shown in Figure 4-4. Cuu Long CIPM establishes SPC for the Project and makes a PPP Contract with MOT. SPC implements the Project with outsourcing contract for D/D, construction supervision, construction work and O&M under management of authorized state agency.

Regarding financing of the Project, the capital is provided by Cuu Long CIPM and other investors and the loan is provided from GOV and lenders.

Opinion Opinion Opinion OpinionProject Proposal Approval for Investment

(Prepare Procedure (Support for to arrenge ODA,OCR loan) Delegation land clearance)

Charter Capital

The State participationPPP Contract

Management Guarantee

Capital(100% share) & Loan

Capital Mortgage Loan OCR Loan

O & M Contract

Cosulting Contract Capital

Construction Contract

MOC

Vietnamese Government

Cuu Long CIPM

Prime Minister

My Thuan - Can Tho Expressway Construction Project

Consultants

ADB

SPC for MT-CTExpressway

Lenderz

MPI MOT MONRE MOF

Investers(Private Companies, State Companies)

Contractors

Can Tho Bridge O&M co.Road & Bridge Reparing &

Maintenance No.715

Authorized State Agency(Project management Unitunder Cuu Long CIPM)

Or other O&M provider

(Source: PMU My Thuan, State No.3183/BGTVT-TCCB, and Study Team)

FFiigguurree 44--44 IImmpplleemmeennttaattiioonn SSttrruuccttuurree ooff tthhee MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt

((33)) IInntteennttiioonn ooff AAssiiaann DDeevveellooppmmeenntt BBaannkk

ADB proposed PPTA for the My Thuan - Can Tho Expressway Project, which will improve transport efficiency in the arterial transport link in the Mekong River Delta area, and signed MOU with MPI to commit to provide OCR loan of USD175 million.


PPaaggee 44--77

((aa)) PPllaann ooff tthhee PPPPTTAA ADB will examine whether the My Thuan - Can Tho Expressway Construction Project can

apply for PPP scheme. If it is viable in PPP scheme, ADB will propose PPTA for the Project in PPP scheme. If not, ADB will propose PPTA in an ordinary way.

((bb)) AADDBB’’ss CCoonncceerrnn BEDC has not secured sufficient funding yet to pursue the Trung Luong - My Thuan section

under BOT scheme, which is the front-end section of the Project. ADB then concerns that the Project would not be carried out in a timely manner, and says it will not provide with financing unless the Trung Luong - My Thuan will be opened. ADB comments on the rescue package, that is expanding the Project scope to the section before My Thuan - Can Tho and 2nd My Thuan bridge.

44..44 PPPPPP SScchheemmee eexxaammiinneedd bbyy tthhee SSttuuddyy TTeeaamm It is a positive outlook to establish Cuu Long CIPM for collecting a big portion of project

cost by itself and to plan to construct a comprehensive framework of implementation. But payback period of over-25 years will not attract investors and there are still some big issues to introduce private funds for infrastructure projects, which may need huge amount and take a long time to recover investments. Some of key issues on the My Thuan - Can Tho Expressway Construction Project are as follows;

((11)) NNeettwwoorrkk RRiisskk Trung Luong - My Thuan section that is preceding section of the Project is delayed due to

shortage of finance. Though BEDC, the owner of the Trung Luong - My Thuan Expressway Construction Project, is collecting fund twice the amount of the Project, it does not stay on track.

((22)) SSeeccuurriittyy PPaacckkaaggee According to PMU My Thuan, Cuu Long CIPM would establish “Real Estate Business

Company” and “Advertisement Company” for enhancement of the revenue of SPC. However, the Study Team could not verify whether SPC is well structured to collect revenue from real estate business and adverting business. It is necessary for Cuu Long CIPM to structure viable SPC and make it structure bankable, so as to secure project finance with limited-recourse to sponsors.

Additionally, it is important for SPC to obtain incentives and support from the Government sufficient enough to make the structure bankable, such as;

Buy-out clause

Tax exemption; Tax reduction

Land use fee exemption

Trading fuel, services of advertising, and parking along the expressway and etc

Provision of infrastructure facilities

((33)) PPrrooffiittaabbiilliittyy Firstly, the Study Team could not verify the toll rate as precondition for the traffic demand

forecast cited in the F/S Report (05-TEDI-013-H.D) though 1,000VND/km is applied for financial efficiency evaluation. And, the Study Team confirmed that the cost of widening work which is planned after 2030 was not considered evaluation of economical and financial efficiency in the above F/S Report. Additionally, payback period of 25 years is far from attractive for investors, even though VND210 billion per year is added on SPC’s revenue. It is necessary for SPC to obtain further incentives and support as described above.

It is to be noted that several financiers like as “Development Assistance Agencies” would not accept SPC to operate a high risk project such as industrial and urban development. SPC had better to promote other type of business for enhancement of the revenue from expressway, such as advertising business along expressway and/or gas station business on the parking area, on the other hand, the real estate business is to be pursued by another SPC.


PPaaggee 44--88

((44)) GGoovveerrnnmmeenntt GGuuaarraanntteeee From general aspects, it is indispensable for the Government to assume unmanageable risks,

and it is necessary for private sector to obtain the Government support to mitigate the risks of private sector in view of the feature of infrastructure project, which may need huge amount and take a long time to recover investments.

The risk allocation of the Project examined by the Study Team is shown in Table 4-2.

TTaabbllee 44--22 RRiisskk AAllllooccaattiioonn ooff tthhee PPrroojjeecctt eexxaammiinneedd bbyy tthhee SSttuuddyy TTeeaamm ((AAssssuummppttiioonn)) Category Risk Risk Profile Public Private

EPC/O&M Land Acquisition Risk Delays in obtaining approvals or permits ○ -

Cost overrun ○ -

Environmental Risk Social Risk Harmful effect on natural/social environment of Vietnam - ○

Technical Risk Inadequate technology affecting good operation - ○

Completion Risk Delay in completion - ○

Cost overrun - ○

O&M Risk Poor performance/experience of sponsors/O&M company - ○

Finance Sponsor Risk Sponsors' default in equity infusion - ○

Inability of assigning alternate O&M company - ○

Funding Risk Inability of funding from appropriate lenders - ○

Insufficiency in funding amount - ○

Market Traffic Risk Less traffic volume than forecasted ○ -

Toll Risk Insufficient toll increase comparing with actual inflation ○ -

Network Risk Poor junction between existing and newly constructed roads ○ -

External Exchange Risk Decrease in income due to fluctuation of exchange rate/devaluation of VND ○ -

Factors Inability for repayment of loans in foreign currency due to exchange rate fluctuation ○ -

Interest Risk Inability for repayment of loans in foreign currency due to interest rate fluctuation ○ -

Money Conversion & Transfer Risk Potential loss due to inability of money conversion/transfer to overseas ○ -

Change-in-Law Risk Potential alteration or cancellation of established interests/permit ○ -

Political Risk Limitation in money transfer ○ -

Harmful effect due to strike, terrorism, riot etc. ○ -

Accident & Disaster Risk Closedown/Difficulty in restart of operation due to accident or natural disaster ○ - (Source: Study Team)

44..55 RReeccoommmmeennddaattiioonnss

It is a positive outlook to establish Cuu Long CIPM for collecting a big portion of project cost by itself and plan to construct a comprehensive framework of implementation. There are some recommendations yet, in order to promote the Project;

Recommend to accept PPTA which ADB proposed

ADB concerns unclear situation in Trung Luong - My Thuan Expressway Construction Project. The Study Team thence reports about outline of the Trung Luong - My Thuan Expressway Construction Project in Chapter 5, based on the meeting with BEDC

Recommend to obtain the Government guarantee for risks which private company can not manage nor assume

Recommend to update a traffic demand forecast based on clear preconditions such as toll fee, as well as based on sensitivity analysis, in order to attract financiers’ appetite to achieve good financing

Because expressway projects would be the first PPP project for Vietnam, it is important for the Government to engage the Project and offer substantial support menus positively to accelerate forthcoming infrastructure projects.

CChhaapptteerr 55 PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann

EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt


PPaaggee 55--11

55 PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt

55..11 PPrreesseenntt SSiittuuaattiioonn ooff tthhee PPrroojjeecctt Although BEDC has been carrying out the D/D which will be completed in May 2011,

detailed construction schedule has not been prepared yet because BEDC is seeking a project financing for further implementation of the Project under BOT form.

55..22 OOuuttlliinnee ooff tthhee EExxiissttiinngg FFeeaassiibbiilliittyy SSttuuddyy BIDV obtained the right to the development of the Trung Luong - My Thuan - Can Tho

Expressway Construction Project including the Trung Luong - My Thuan section and Second My Thuan Bridge. BEDC, as SPC, was established to implement the project under BOT scheme in November 24, 2007. The F/S (05-TEDI-013-H) was carried out by TEDI under BOT scheme and was approved through MOT’s Decision No.343/QD-BGTVT dated on February 4, 2008.

The outline of the F/S, the typical cross section and the route plan are shown in Table 5-1, Figures 5-1 and 5-2 respectively..

TTaabbllee 55--11 OOuuttlliinnee ooff tthhee FF//SS Item Description

Road Class Expressway A Class 120 (Design Speed: 120km/hr)

Road Length Expressway: 54.3km, Linking Road: 8.35km

Forecasted Traffic Volume 58,088 pcu/day (2020), 73,654 pcu/day (2025), 93,392 pcu/day (2030)

Nos. of Lane 4 lanes at initial stage, 6 lanes at ultimate stage (after 2020)

Road Width 25.5m for Embankment, 24.5m for Bridge (see Figure 5-1)

Bridge River Bridge (on the Expressway): 43 bridges (11,158 m)

River Bridge (on the Linking Road): 2 bridges (87 m)

Flyover (on Crossing Road): 11 bridges (2,720 m)

Interchange Bridge (Overpass): 4 bridges (915 m)

Interchange 4 Interchanges

Major Structures

Soft ground

Treatment

54.3 km (Whole the Section)

Toll Gate 1 Toll Barrier (on Thruway), 3 Toll Gates (on Interchange Ramp-way)

SA/PA 1 SA, 1 PA

Traffic

Management

Operation

Systems

Toll Collection System (ETC/Manual Modes, Closed System),

Vehicle Detection System, Emergency Telephone System

Environment/Land Acquisition Houses to be resettled: 567 houses (Source: EIA in BOT F/S)

Investment Cost VND19,476 billion

(Construction Cost: 11,160, Improvement Cost of Than Cuu Nghia IC: 588,

Land Acquisition & Resettlement: 786, Consulting Services: 678, etc.)

O&M Cost Maintenance Cost: VND7,649 billion (35 years)

Operation & Management Cost: VND8,146 billion (35 years)

Economic Evaluation EIRR: 12.15%, NPV: VND 332 billion, B/C: 1.02

Financial Evaluation FIRR: 12.33%, NPV: VND 1,778 billion, B/C: 1.09

* Investment capital 3% from the state and 97% from private sector

* Toll rate 1,000VND/km with 30% increase per 5 years

* Toll collection at NH1 (39years: ‘10-‘48) and HCMC-TL Expressway (14 years: ‘35-‘48)

* Subject to profit VND430 billion /year in 25 years from preferential projects

* Operation Period: 35 years (Source: BOT F/S)


PPaaggee 55--22

12.75

11.25

2X3.75=7.500.75

1.00

Excavation

3.00

1.00

1.00

Existing Ground

Finished Grade

3.00 2X3.75=7.50

11.25

25.50

12.75

1.00

1.00

Varies 0.75

Coheseve Capping Layer

ConcreteBlock Median

3.75

Final PhaseBoundary

3.75Guardrail

i) Embankment Section

1000

1220

7502x 3750=75003000500

12250

675 4x 2440=9760

t im t u y Õn

2%

1220

750 2x 3750=7500 3000 500

12250

6754x 2440=9760

2%

24440

9300

1000 3x 3000=9000 100011000 100

3500 4000 3500

100

d = 1mk h o an n h å i

10003x 3000=9000100011000100

350040003500

100

d = 1m

8 c ä c k h o a

2000

2000Bª t « n g ®Öm

d µy 100mmBª t « n g ®Öm

d µy 100mm

ii) Bridge Section

(Source: BOT F/S)

FFiigguurree 55--11 TTyyppiiccaall CCrroossss SSeeccttiioonn

Vinh Long City

Trung Luong

NH1

My Thuan Bridge

Tien River

Trung Luong - My Thuan Expressway54.3km

Beginning Point(KM49+620)

End Point(KM103+933)

Than Cuu Nghia IC(KM50+380)

Cai Lay IC(KM68+850)Cai Be IC

(KM81+500)

Parking Area(KM56+150)

Can Tho City

My ThoCity

NH1

Service Area(KM88+000)

An Thai Trung IC(KM100+956)NH30

HCMC

(Source: Study Team based on BOT F/S)

FFiigguurree 55--22 RRoouuttee PPllaann ooff tthhee TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy

24500


PPaaggee 55--33

55..33 OOuuttlliinnee ooff tthhee EExxiissttiinngg BBOOTT SScchheemmee

((11)) OOuuttlliinnee ooff BBIIDDVV EExxpprreesssswwaayy DDeevveellooppmmeenntt CCoommppaannyy ((BBEEDDCC))

((aa)) EEssttaabblliisshhmmeenntt ooff BBEEDDCC BEDC was established on November 24, 2007, under the initiative of BIDV. BEDC

originally obtained the BOT concession of the Trung Luong - My Thuan - Can Tho Expressway Construction Project, however, lack of the investment funds, the the My Thuan - Can Tho section and Second My Thuan Bridge were transferred to PMU My Thuan in May 2009 (Announcement No.137/TB-VPCP and Decision No.1318/QD-BGTVT).

On the other hand, BEDC was approved to obtain the O&M concession of the HCMC - Trung Luong Expressway (25 years) by the Prime Minister in his letter No.1625/TTg-KTN dated on September, 2009.

((bb)) CChhaarrtteerr CCaappiittaall ooff BBEEDDCC Based on the Business Registration Certificate (No.4103008500) issued by DPI in HCMC,

the charter capital was registered as VND1,500 billion. The current shareholders and each contributed capitals as of January 2011 are as follows;

Bank for Investment and Development of Vietnam VND375 billion

Vietnam Urban and IZ Development Investment Corporation VND150 billion

Petro Vietnam Finance Corporation VND105 billion

Vietnam Ship Building Industry Group VND105 billion

Vietnam National Coal - Mineral Industries Group VND105 billion

Tan Hoang Minh Limited Company VND045 billion

Becamex Industrial and Investment Development Corporation VND360 billion

Company 508 VND105 billion

((cc)) RReeggiisstteerreedd BBuussiinneessss FFiieellddss ooff BBEEDDCC According to the above Certificate, BEDC is allowed to pursue some business fields other

than proper Expressway business as below;

Construct and provide services in industrial zone, processing zone and urban zone

Exploit, produce, and trade construction materials, minerals (excluding exploitation and production at head office)

Provide consultancy service and trade real estate

Produce and trade power energy

The organization chart of BEDC is shown in Figure 5-3 in the next page.


PPaaggee 55--44

(Source: BEDC)

(Note: The role of “Infrastructure investment company” is to seek good business opportunities not only along the HCMC - My Thuan expressway but also in domestic and neighborhood countries so as to improve revenue of the 2 projects as described herein below.)

FFiigguurree 55--33 OOrrggaanniizzaattiioonn CChhaarrtt ooff BBEEDDCC


PPaaggee 55--55

((22)) OOuuttlliinnee ooff tthhee EExxiissttiinngg BBOOTT SScchheemmee

((aa)) AAssssiiggnnmmeenntt ooff BBEEDDCC BEDC is assigned to play the roles in terms of Investment, exploitation and management of

section the HCMC - Trung Luong and – Trung Luong - My Thuan Expressways with total length of 93.8 km, including 2 compositions as below:

Composition 1: BOT concession of the Trung Luong - My Thuan Expressway in accordance with Decree No.78 (Prime Minister’s Decision No.29/QD-TTg dated on February 8 , 2010)

Composition 2: O&M concession of the HCMC - Trung Luong Expressway (Prime Minister’s Letter No.1625/TTg-KTN dated on September 11, 2009)

((bb)) PPrroojjeecctt ccoosstt aanndd ssoouurrccee ooff ffiinnaannccee

((ii)) PPrroojjeecctt ccoosstt Composition 1: Total project cost was estimated about VND18,888 billion, including

construction cost, equipment, site clearance and resettlement, project management, consultancy, interest during construction and contingency

Composition 2: Price for the O&M concession (25 years) is about VND10,000 billion, and BEDC will repay it in 3 years

((iiii)) SSoouurrccee ooff ffiinnaannccee BEDC intends to secure charter capital by 10% of total project cost (VND28,888 billion).

BEDC then is planning to raise the remaining 90% through ODA, OCR, and bond etc. And, BEDC is seeking more partners and financiers.

((cc)) TThhee GGoovveerrnnmmeenntt SSuuppppoorrttss The Government will guarantee repayment by BIDV of the loans (including ODA, if any),

that BIDV borrows from the lenders for re-lending to BEDC BEDC is permitted to take over the toll collection right, facilities and labor of the existing

My Thuan Bridge toll station in order to improve revenue of the Trung Luong - My thuan Expressway Construction Project

BEDC is allowed to take over the toll collection right on NH1A section from Binh Binh Chanh - Trung Luong

BEDC has the exclusive right to exploit the services and infrastructure within the road scope (including underground works) and advertising sales along the HCMC - My Thuan section

BEDC is exempted from all land use fees during the implementation period

((33)) IInntteennttiioonn ooff BBEEDDCC Due to shortage of fund, BEDC expects support from JICA as follows;

Study to realize the Trung Luong - My Thuan Expressway project under PPP scheme Support funding arrangement to the Project Support training of BEDC’s staff to achieve skills of O&M activities

According to “Invitation for financing of Trung Luong - My Thuan Expressway project”, BEDC is inviting financiers under the following conditions;

Tenor: Minimum 12 years, plus a grace period of 3 years Interest rate: Competitive rate described in a specific term sheet Loans will be guaranteed by GOV


PPaaggee 55--66

55..44 CCoonnssiiddeerraattiioonn ttoo tthhee EExxiissttiinngg BBOOTT SScchheemmee aanndd PPoossssiibbiilliittyy ooff PPPPPP SScchheemmee

((11)) CCoonnssiiddeerraattiioonn ttoo tthhee EExxiissttiinngg BBOOTT SScchheemmee Main issues on the existing BOT scheme were recognized by the Study team, pursuant to the

interview with BEDC and with reference to the Study result of the JICA Study;

((aa)) EEqquuiittyy rraattiioo From general aspects, 10% of equity ratio is not sufficient to relieve private sectors for the

infrastructure development projects.

((bb)) BBuussiinneessss ssccooppee aanndd ttoottaall pprroojjeecctt ccoosstt Size of the Project, amounting approx. VND28,888 billion, is so huge to implement by

private investment. Above all, VND10,000 billion of the Composition 2 is too big for BEDC to repay in only 3 years.

The Study Team could not verify clearly organization structure of BEDC, such as; capital ties of BEDC group; adequacy if each section is properly organized to manage the HCMC - Trung Luong Expressway and to implement the Trung Luong - My Thuan Expressway Construction Project.

((cc)) PPrrooffiittaabbiilliittyy The Study Team could not verify the toll rate as precondition for the traffic demand forecast

cited in the F/S Report (05-TEDI-013-H) though VND1,000/km is applied for financial efficiency evaluation. Specific value of government supports is not verified, which should be necessary for BEDC to quantify value of government supports in order to make reliable cash flow.

In addition, the cost of widening work which is planed after 2020 in the F/S Report (05-TEDI-013-H) is not verified. Moreover, pay-back period over 25 years, according to the F/S Report, is far from attractive term for investors.

((22)) PPoossssiibbiilliittyy ooff PPPPPP SScchheemmee eexxaammiinneedd tthhee SSttuuddyy TTeeaamm There are some recommendations to attract financiers’ appetite to achieve good financing.

From general aspects, 10% of equity ratio is not sufficient to develop infrastructure projects. It is better to increase the registered charter capital to more than 30% of total project cost. Study Team would recommend to raise capital from private fund as well as financing agencies like as JICA, and to apply the state participation in PPP scheme.

Because of the large investment cost and short time remained till 2015 when the My Thuan - Can Tho section would be open, The Study Team would recommend BEDC to establish 2 SPCs for each composition and to make reliable cash flow to verify viable plan for each SPC. As far as the Trung Luong - My Thuan section is concerned, one of the options is to apply O&M concession in the same manner with the HCMC - Trung Luong section, which was constructed by the GOV.

55..55 RReeccoommmmeennddaattiioonnss For the solution of main issues as described in Chapter5.4 and attracting financiers’ appetite

to achieve good financing, the Trung Luong - My Thuan Expressway Construction Project would be recommended to utilize the JICA PPP-F/S1 to study the possibility and suitable type of PPP scheme.

1 JICA PPP-F/S is subject to JICA’s adoption for proposal of applicants who is interested in investment to PPP project.

CChhaapptteerr 66 OOvveerraallll RReeccoommmmeennddaattiioonnss


PPaaggee 66--11

66 OOvveerraallll RReeccoommmmeennddaattiioonnss As the result of confirmation of the Project situation, PPP schemes presently proposed by

MOT and BEDC and also intentions of the Project owner and donors, the Study team would like to recommend as follows:

((11)) MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt It is recommended to implement this section by PPP scheme proposed by MOT taking into

considerations of following conditions:

MOT is establishing Cuu Long CIPM who is capable of mobilizing investment capital for transport infrastructures, and intends to invest in the Project as prioritized project.

ADB is preparing PPTA for examination of possibility of PPP scheme

((22)) TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt It is recommended to apply PPP-F/S of JICA to study the possibility and suitable type of PPP

scheme for the purpose of;

To establish practical PPP scheme in order to attract financiers’ appetite and achieve good financing for further implementation of the Project,

To solve several issues on the existing BOT scheme,

To facilitate the implementation of the Project in order to prevent from affecting implementation schedule of the following sections, namely the Second My Thuan Bridge and My Thuan - Can Tho Expressway Construction Projects because completion of the Project is prerequisite condition to develop these following projects,

For BEDC’s reference and consideration, draft TOR for JICA PPP-F/S is enclosed in this Study Report.

((33)) RReeggiioonnaall IInndduussttrriiaall DDeevveellooppmmeenntt PPllaann aalloonnggssiiddee TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy It is recommended to formulate the Regional Industrial Development Plan for the multiple

provinces alongside Trung Luong - My Thuan - Can Tho Expressway taking into consideration of regional characteristics for the purpose of;

To prevent depopulation of provinces alongside expressways due to bypass of traffic, it is necessary to increase potential of the area through implementation of Regional Industrial Development Plan. As the result, it might generate traffic volume using the expressway and finally contribute to improve profitability of the Project,

In order that the investor is able to select development right from industrial estates planned in the Regional Industrial Development Plan as one of options for improvement profitability,

For reference to Vietnamese relevant authorities, the draft TOR on Regional Industrial Development Plan alongside Trung Luong - My Thuan - Can Tho Expressway is enclosed in this Study Report.

AAppppeennddiixx

AAppppeennddiixx AA:: RReeffeerreennccee MMaatteerriiaallss

No. Name of Materials/Documents

Appendix A.1 Decision No.3138/BGTVT-TCCB

Appendix A.2 Business Registration Certificate No.4103008500

Appendix A.3 Decision No.229/QD-TTg

Appendix A.4 Prime Minister’s Letter No.1625/TTg-KTN

Appendix A.5 Invitation for Financing of Trung Luong - My Thuan Expressway Construction Investment Projects

AAppppeennddiixx BB:: MMeeeettiinngg MMeemmoo

AAppppeennddiixx CC:: DDrraafftt TTeerrmmss ooff RReeffeerreennccee

No. Name of Materials/Documents

Appendix C.1 Draft Terms of Reference for JICA PPP-F/S

(Trung Luong - My Thuan Expressway Construction Project)

Appendix C.2 Draft Application for JICA M/P Study

(Regional Development M/P alongside Trung Luong - My Thuan - Can Tho Expressway)

AAppppeennddiixx AA:: RReeffeerreennccee MMaatteerriiaallss

AAppppeennddiixx AA..11:: DDeecciissiioonn NNoo..33113388//BBGGTTVVTT--TTCCCCBB

PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt AAppppeennddiixx AA..11

PPaaggee AA..11--11

MINISTRY OF TRANSPORT SOCIALIST REPUBLIC OF VIETNAM

Independence – Freedom – Happiness

No.: 3183/BGTVT-TCCB Hanoi, May 19th 2010

STATEMENT

Regarding establishment of Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure and method to mobilize investment capital,

organize management and operation of My Thuan – Can Tho expressway project

To: The Prime Minister

Road infrastructure is an important part in social infrastructure in general and in transport infrastructure in particular. It needs to be developed one step ahead to motivate socio-economic development to serve the cause of industrialization and modernization of the Party and State, catching up with regional and international integration progress, ensuring national security and defense of the country.

A. DEVELOPMENT ORIENTATION AND METHOD TO MOBILIZE RESOURCES FOR ROAD TRANSPORT INFRASTRUCTURE DEVELOPMENT

1. Development Orientation

According to Decision No.1327/QD-TTg dated August 24th 2009 of the Prime Minister on approving Road Transport Development Plan by 2020 and vision by 2030, Decision 1734/QD-TTg dated December 01st 2008 of the Prime Minister approving Vietnam expressway network development plan by 2020 and vision after 2020, estimated investment capital for critical transport projects in period 2010-2025 is about 75 billion USD (about 5 billion USD/year, equal to 90,000 billion VND/year). Meanwhile, each year’s average state budget for transport sector is about 20,000 billion VND. Therefore, in above Decision, the Prime Minister provided guidance for Ministry of Transport: “To study and establish proper organizational models in management over investment, construction and operation of expressway systems” and “To mobilize all domestic and foreign resources, from economic sectors, in different forms such as build – operation – transfer (BOT), Build – Transfer – Operation (BTO), Public – Private Partnership (PPP), issuance of work bonds, etc.”

2. Method to mobilize resources for investment and development of road transport infrastructure

In order to meet development requirements of transport infrastructure, the Government has called for organizations, individuals to participate in investment, operation of road transport infrastructure (investors could be state-owned companies, joint stock companies, domestic and foreign joint venture companies and private sectors).

However, investment capital sources are limited despite many solutions provided by the Government, such as increase in investment from budget, governmental bonds, ODA, stimulus to establish enterprises operating in road transport development and application of some specialized mechanism and policies to mobilize commercial capital; announcement of lists of projects which are calling for BOT investment capital and application of specialized mechanisms and policies for each project to facilitate BOT investor.


PPaaggee AA..11--22

As state budget is limited and ODA is getting decreased, it is necessary to establish state-owned enterprises to receive commercial loans (OCR); representatives to state-owned capital in PPP projects; mobilize investment capital from all economic sectors to socialize transport infrastructure development, on the other hand, still ensure national security and defense and promote leading role of state-owned enterprises in investment orientation.

B. SOLUTIONS TO IMPLEMENTATION ORGANIZATION

To fulfill the goals approved by the Prime Minister, it is necessary to establish key enterprises for implementation organization. With agreement by the Prime Minister, Ministry of Transport established Vietnam Expressway Development Company (VEC) to fulfill approved goals. After 5 years of operation, VEC has basically fulfilled the goals set by the Prime Minister and Minister of Transport.

For the Southern focal economic zone, there have not been any enterprises that are capable of mobilizing investment capital for transport infrastructure. Therefore, MOT assigned My Thuan Project Management Unit (PMU) to study and formulate a plan for restructuring My Thuan PMU and some units in the South of MOT to form an enterprise that is capable of mobilizing investment capital for transport infrastructure, and consider proposals for each specific project for implementation organization. Given the proposal by My Thuan PMU, MOT would like to make a report to the Prime Minister with following points:

I. Regarding establishment of enterprises

With agreement by the Prime Minister (in letter No.3964/VPCP-DMND dated July 17th 2007 of the Governmental Office), MOT requested My Thuan PMU to formulate a pilot plan for conversing into a single-member liability limited company which is major in project management consultation and developer. The plan is advocated by Ministries of Finance, Planning and Investment, and Construction.

However, in the face of transport infrastructure development demand in the South and capacity of My Thuan PMU (currently, My Thuan PMU is assigned to be the investor of 06 projects with total investment capital of over 120,000 billion VND), after studying, MOT realized that it is necessary to establish a Corporation in charge of investment, project management and operation of transport infrastructure. The Corporation is established by rearranging and restructuring My Thuan PMU and merging some enterprises under MOT in the South, including Can Tho Bridge management and operation single-member ltd. company, Road and Bridge Repairing and Management single-member ltd. company No.715. At the same time, some enterprises (members of the Corporation) will be established to undertake investment in expressways in the South Central Region, South Region in form of PPP and real estate business, advertisement business and services on expressways under management of the Corporation.

The Corporation, according to the plan, will be established in form of holding company – subsidiary, in which the Holding company (converted from My Thuan PMU and units under the PMU) is a single liability limited company with 100% of state capital, directly involving in business and investment in other enterprises, controlling subsidiaries by capital ownership, state assets which are assigned to manage; technology, trademark and market. The holding company has a legal status, its own stamp and logo, an account in State Treasury and domestic and foreign banks, tax code, business registration by business lines, functions and duties which are prescribed in the establishment decision, operating in line with the laws and organization and operation rules approved by competent agencies.


PPaaggee AA..11--33

1. Name and head office

- Vietnamese name: Tổng công ty Đầu tư Phát triển và Quản lý dự án hạ tầng giao thông Cửu Long.

- International transaction name in English: Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure.

- Short name: CUU LONG CIPM.

- Head office at 127B Dinh Tien Hoang, ward 3, Binh Thanh district, Ho Chi Minh City.

- Telephone:84-8-8410088; Fax: 84-8-8411872.

2. Owner is Ministry of Transport

3. Major business fields

Manage investment capital for transport infrastructure; operate, accumulate and call for investment capital sources for transport infrastructure development; manage, operate, maintain transport infrastructures to return construction capital; invest, manage transport infrastructure projects, natural resources exploitation and conservation projects to develop transport, social infrastructures; organize and manage construction of transport infrastructures; financial investment; buy, sell, transfer capital in investment projects in order to enhance efficiency of capital utilization and other investment projects.

4. Charter Capital: about 833,5 billion VND, formed by following sources: existing assets of merger companies; assets in Can Tho bridge project, HCMC-Trung Luong expressway project (including all assets which the Government has invested in Office building projects, land, workshops, transport vehicles, laboratories, but not including value of the work); revenue from Can Tho bridge toll.

5. Organization apparatus

a) Structure of the Holding Company – Corporation consists of membership assembly, general director, controllers and supporting apparatus.

- Subsidiaries consist of: PMUs of Vam Cong bridge, Cao Lanh bridge, Southern coastal corridor, representative offices in Hanoi and Can Tho, centers, etc. who facilitate the implementation of the Corporation’s projects.

b) Member units

- Companies that CUU LONG CIPM holds 100% of charter capital:

It is proposed that the Prime Minister should allow following enterprises, which MOT is being authorized to implement rights and obligations of owner, to become member units of the Corporation:

• Can Tho Bridge O&M single-member ltd. Company

• Road and Bridge Repairing and Management single-member ltd. Company, No.715

- Companies that CUU LONG CIPM holds over 50% of charter capital, including:

Companies involving in real estate business, advertisement and services on expressways implemented and managed by CUU LONG CIPM (to be established by the Corporation when implementing projects).


PPaaggee AA..11--44

- Companies that CUU LONG CIPM holds less than 50% of charter capital, including:

My Thuan – Can Tho expressway investment company (PPP), joint stock companies investing in expressways in the South Central Region, South Region (to be established for project implementation).

With conditions of capital, asset, business fields, existing management capacity, the establishment of the Corporation satisfies socio-economic development plan and strategy of the Government, transport infrastructure development plan – strategy and legal regulations.

II. Method to mobilize investment capital and organize management and operation of My Thuan – Can Tho expressway project

My Thuan – Can Tho expressway is a part of Ho Chi Minh – Can Tho expressway which is approved by Prime Minister for feasibility study in letter No.399/CP-CN dated May 14th 2001, in which:

- Ho Chi Minh city – Trung Luong expressway section invested by state budget was opened to traffic on February 3rd 2010.

- Trung Luong – My Thuan expressway section invested by Bank for Investment Development of Vietnam (BIDV) in form of BOT was commenced in November 2009 and is planned to be completed in 2012.

- My Thuan – Can Tho expressway section implemented by the Ministry of Transport is in capital arrangement stage.

Above expressway connects two big cities, i.e. Ho Chi Minh city and Can Tho as well as My Tho city, Vinh Long city, etc. and industrial parks along the expressway. The expressway is constructed to meet economic development demand of Mekong River Delta and relieve overloaded traffic volume on NH1. By 2013, section My Thuan – Can Tho of NH1 will be probably suffered from congestion at bottlenecks due to completion of expressway section from Ho Chi Minh City to My Thuan. However, capital sources for My Thuan – Can Tho section is now facing difficulties as follows:

- State budget and governmental bonds are limited;

- Official comments of ODA and preferable loans have not been given by JICA and ADB.

- OCR loans: currently, only ADB is interested in. On September 17th 2009, ADB dispatched an inspection delegation to the field; on November 24th 2009, MOT met with DAB delegation to arrange capital for projects. Result (Announcement No.564/TB-BGTVT dated December 04th 2009): if all conditions proposed by sponsors are satisfied, at least by 2012 these projects can start.

Therefore, without effective solutions, there will be congestion in bottlenecks on NH1 from My Thuan to Can Tho and the entire expressway from HCMC-Can Tho will not be opened to traffic by 2013.

With proposal of new organization, My Thuan PMU proposed competent agencies to implement My Thuan – Can Tho expressway development project in form of PPP (public-private partnership). Main content of “Method to mobilize investment capital and organize management and operation of My Thuan – Can Tho expressway project” is as follows:


PPaaggee AA..11--55

- Total length: 32.3km.

- Total investment: 6,084 billion VND, equal to 338 million USD (calculated on basis of project document prepared by TEDI and updated inspection results of My Thuan PMU; excluding management cost and loan interests during operation period, these costs will be calculated in the toll collection-capital return puzzle).

- Location of project: it is an ending section of Ho Chi Minh City – Can Tho expressway, linking to Can Tho city – a rapid-growth center of Mekong River Delta.

- Connection to big cities: it is a link between two (02) cities with outstanding economic development speed in the Mekong River Delta, which are Vinh Long and Can Tho city.

- Orientation for plan: The Prime Minister approved Mekong River Delta Development Plan by 2020 and vision by 2050, which considers Can Tho City a core city of Mekong River Delta. Therefore, commodity will target export and import to Can Tho city, and then they are distributed to cities and provinces in the region. After completion, My Thuan – Can Tho expressway section will link Vinh Long city to Can Tho city and link to South Hau River road to form a regional integration road between Vinh Long city and Can Tho city and Hau Giang, Soc Trang, Bac Lieu and Ca Mau province.

- Reasonable construction quantity: with the project’s total length of 32.3km, in which the expressway section is only 24.5km, quantity of land clearance (houses and works) is minor; so initial investment cost is not so high.

With such outstanding characteristics, this can be an attractive project. According to figures of consultant, there are about 40,000 trips / day & night (in 2015). If increment of “opportunity” of recent economic development, urbanization, industrial park development of Vinh Long and Can Tho city is considered, there will be certainly a big volume of traffic on the road to ensure investment capital return.

C. PROPOSALS AND RECOMMENDATIONS

The conversion of My Thuan PMU from a non-profitable unit into a company operating in line with law on enterprises has been agreed by the Prime Minister in principle. Based on socialization policy, diversity of capital sources to satisfy demand for transport infrastructure development in the South, MOT realizes that the plan for establishing Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure on basis of My Thuan PMU conversion and merge of some units in the region is necessary, suitable with current regulations of Law on Enterprises, enhancing their performance. Besides, the method to mobilize investment capital, organize management and operation of My Thuan – Can Tho expressway project in form of PPP is highly feasible. This should be promoted and supported to pave the way for other projects.

Therefore, to facilitate the implementation organization, MOT would like to request the Prime Minister to consider and allow:


PPaaggee AA..11--66

I. For establishment, organization and operation of the Corporation:

1. To allow to establish Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure (CUU LONG CIPM) on the basis of My Thuan PMU conversion and merge with some units under MOT in the southern area. The Corporation will operate in form of holding company – subsidiaries, in which the holding company is a single-member limited liability company with 100% of state holdings.

2. MOT shall take the role of owner of the single-member limited liability company – Holding company of CUU LONG CIPM.

3. Capital and assets:

- To allow CUU LONG CIPM to receive, manage and operate all assets which are currently managed by My Thuan PMU (exclusive of value works which the Government is assigning to the PMU), construction sites, operation office of Can Tho bridge project; this is noted in charter capital.

- To assign CUU LONG CIPM to use entire revenue from toll of Can Tho bridge to invest in projects; these revenues are included in charter capital of the Enterprise.

4. Capital mobilization support for transport infrastructure investment

- It is allowed to apply re-loan mechanism from ODA source of the Government, from normal loans or commercial loans of Governments, international credit organizations; from long-term international bonds of the Government.

- It is allowed to issue domestic and international work bonds guaranteed by the Government.

- It is allowed to access development credit fund of the Government for transport infrastructure projects in accordance with current regulations.

II. For My Thuan – Can Tho expressway project

1. It is allowed to implement My Thuan – Can Tho expressway project in form of PPP. CUU LONG CIPM is assigned to coordinate in selection of investors, be a leader of investor consortiums to establish a PPP enterprise for project implementation.

2. CUU LONG CIPM is allowed to use charter capital, mortgage assets, sell or mortgage the right to collect Can Tho bridge toll to mobilize sufficient 30% of capital contribution of the Corporation in the project.

3. The Government shall consider supporting a part from state budget for compensation, land clearance and resettlement.

4. Based on real situation, CUU LONG CIPM shall study and submit a PPP investment policy outline for the project.

III. The Prime Minister is requested to consider, give assignments to relevant agencies during the project implementation organization process

1. Ministry of Finance

- Guarantee, on behalf of the Government, foreign loans of CUU LONG CIPM (if any) for project implementation.

- Guarantee payment of domestic and foreign bonds issued by CUU LONG CIPM.


PPaaggee AA..11--77

2. Ministry of Planning and Investment

- Prepare procedures to arrange ODA capital (if any) to provide re-loan for CUU LONG CIPM in accordance with current regulations.

- Provide guidance, create convenient conditions in terms of procedures for foreign investors (if any) to contribute capital to the Enterprise established by CUU LONG CIPM.

- Coordinate in providing guidance to CUU LONG CIPM regarding implementation sequences, procedures for pilot investment project in form of PPP.

3. Ministry of Natural Resources and Environment

Provide guidance and inspection on the implementation of compensation, support for resettlement, land clearance to make a basis for implementing site clearance and favorable conditions for CUU LONG CIPM.

4. Bank of Vietnam, Development Bank of Vietnam

- Domestic commercial banks are allowed to lend excessive loans more than the prescribed limit to CUU LONG CIPM to ensure capital for the project.

- CUU LONG CIPM is allowed to access development credit loans of the Government.

5. People’s Committees of provinces, cities which have the project

- Be in charge of land clearance for projects.

- Give priority of land reserve for CUU LONG CIPM or the Enterprise established by CUU LONG CIPM to invest in infrastructures in urban areas, industrial parks, service areas to recover capital for the project.

- Create condition for CUU LONG CIPM or Enterprise established by CUU LONG CIPM to operate services along the expressway within their provinces’/cities’ boundary.

6. Ministry of Transport

- Be an owner of CUU LONG CIPM; responsible for establishing, appraising and negotiate with Ministry of Finance in terms of assets; approve charters of the Corporation. Provide guidance, instruction for My Thuan PMU and relevant units to restructure into a Corporation in line with the plan approved by the Prime Minister.

- Take the role of a governmental competent agency which is responsible for signing and implementing transport infrastructure development contracts.

7. CUU LONG CIPM

Assembly of Members, General Director of CUU LONG CIPM shall take legal responsibility for their decisions, ensuring that infrastructure development projects are implemented in accordance with regulations in order to put the project into use with due progress, work quality and investment effectiveness.

Ministry of Transport would like to submit this to the Prime Minister for consideration and decision (enclosed with a plan for establishing Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure and method to mobilize investment capital, organize management and operation of My Thuan – Can Tho expressway project).


PPaaggee AA..11--88

CC: MINISTER

- As mentioned above

- Deputy Prime Minister Nguyen Sinh Hung (for report)

- Deputy Prime Minister Hoang Trung Hai (for report)

- Steering Committee

- Governmental Office

- Ministries of Planning and Investment, Finance, Construction

- Deputy Ministers of Transport

- My Thuan PMU

- For archival

Ho Nghia Dung

AAppppeennddiixx AA..22:: BBuussiinneessss RReeggiissttrraattiioonn CCeerrttiiffiiccaattee NNoo..44110033000088550000


PPaaggee AA..22--11

HO CHI MINH CITY DEPARTMENT OF SOCIALIST REPUBLIC OF VIETNAM PLANNING & INVESTMENT Independence - Freedom - Happiness

BUSINESS REGISTRATION SECTION -------------------------------------------

BUSINESS REGISTRATION CERTIFICATE

OF JOINT-STOCK COMPANY

NNoo.. 44110033000088550000

First registration on November 21, 2007 1st change registration on April 14, 2009

1. Name of the company in Vietnamese:

CÔNG TY CỔ PHẦN PHÁT TRIỂN ĐƯỜNG CAO TỐC BIDV Name of the company in Foreign language:

BIDV EXPRESSWAY DEVELOPMENT JOINT STOCK COMPANY

Abbreviated name: BEDC

2. Head Office: No. 16 Ton That Nghiep, Ben Nghe ward, District 1

3. Scope of business: Constructing road work. Constructing technical infrastructure in industrial zone, processing zone and urban zone. Services of industrial hygiene, management, industrial ration supply. Services of managing industrial zone, processing zone and urban zone. Constructing housing work, civil technical work. Exploiting, producing, and trading in construction materials, mineral (excluding exploitation and production at head office). Trading in real estate. Providing consultancy in real estate. Services of assets auction sale. Trading in good transportation by car, domestic waterway. Producing and trading in power energy. Providing consultancy in preparing verification of investment project.

(The enterprise has to comply well with current regulations the Law).

4. Charter capital: VND 1,500,000,000,000 (One thousand five hundred billion VN dong).

5. Legal capital: ./.

6. List of founding shareholders:


PPaaggee AA..22--22

Order Full name Address Type of share

Number of share

Share value (thousand VND)

Percentage of capital

contribution (%)

ID card No.

1 Bank for Investment and Development of Vietnam

191 Ba Trieu, Hai Ba Trung district, Hanoi city. Common 37,500,000 375,000,000 25.00 0106000439

2

Vietnam Urban and Industrial Zone Development Investment Corporation

151 Ter Nguyen Dinh Chieu, Ward No. 6, District No.3 Common 15,000,000 15,000,000 10.00 4106000335

3 Petrovietnam Finance Corporation

No. 72 Tran Hung Dao, Hoan Kiem district, Hanoi city.

Common 10,500,000 105,000,000 7.00 0106000273

4 Song Da Corporation Building G10, Thanh

Xuan Nam ward, Thanh Xuan district, Hanoi city.

Common 10,500,000 105,000,000 7.00 0106000898

5 Vietnam Shipbuilding Industry Corporation

No. 109 Quan Thanh, Quan Thanh ward, Ba Dinh district, Hanoi city.

Common 10,500,000 105,000,000 7.00 0106000739

6 Vietnam National Coal - Mineral Industries Group

No. 226 Le Duan, Trung Phung ward, Dong Da district, Hanoi city.

Common 10,500,000 105,000,000 7.00 0106000574

7 Tan Hoang Minh Hotel Service Trade Company Limited

96 Vo Thi Sau, Tan Dinh ward, District No. 1. Common 4,500,000 45,000,000 3.00 052959

7. Legal representative of the Company Job title : General Director Full name : PHAN HONG QUANG Sex: Male Date of birth : October 01, 1963 Ethnic group : Kinh Nationality: Vietnamese ID Card (or Passport) No. 011643252 Date of issue : May 30, 2007 Place of issue : Hanoi Public Security Permanent resident:

Building B3, Residential Area of Institute of Laser Technology, O Cho Dua ward, Dong Da district, Hanoi city.

Present residence: Building B3, Residential Area of Institute of Laser Technology, O Cho Dua ward, Dong Da district, Hanoi city.

Signature: (Signed)

LE DAI HANH WARD PEOPLE COMMITTEE

CERTIFIES TRUE COPY FROM ITS ORIGINAL June 23, 2009

No.: 253 Book No.: 14 SCT/BS CHAIRMAN

Hoang Thanh Thuy

For the Head of Business Registration Section

Vice head

(Signed and sealed)

Lam Thi Thu Cuc

AAppppeennddiixx AA..33:: DDeecciissiioonn NNoo..222299//QQDD--TTTTgg


PPaaggee AA..33--11

GOVERNMENT PRIME MINISTER SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness

------------------------------ ------------------------------------------ No. 229/QD-TTg

Hanoi, January 08, 2010

DECISION Promulgating several investment supporting policies For Trung Luong - My Thuan Expressway Project

THE PRIME MINISTER

Pursuant to the Law on Organization of Government dated December 25, 2001;

Based on Decision No. 412/QD-TTg dated Apr 11, 2007 Approving List of investment in several transport infrastructure construction projects playing important roles until the year of 2020;

Considering proposal of Minister of the Ministry of Planning and Investment;

DECIDES:

Article 1. Assign BIDV Expressway Development Company (BEDC) as a BOT

Enterprise to implement Trung Luong - My Thuan Expressway Project under form of BOT contract.

Article 2. Trung Luong - My Thuan Expressway Project shall be implemented with several investment supporting policies as follows:

1. Regarding site clearance:

a) Assign Tien Giang Provincial People’s Committee to be investor of sub-projects for site clearance and resettlement. Tien Giang Provincial People’s Committee shall be responsible for establishment and implementation of resettlement projects so as to ensure resettlement for the people whose land is recovered under the Project that they must be relocated; decision of land recovery, land transfer, approval of estimate, statement of resettlement areas in accordance with current regulations. In case value of living land in the resettlement area is higher than compensation value when their former residence is recovered, the Investor shall support such gap. Value of living land in resettlement area for purpose of calculating compensation shall include cost for site clearance and cost for infrastructure construction;

Tien Giang Provincial People’s Committee has responsibility to hand over timely to BEDC to ensure the Project progress.


PPaaggee AA..33--22

b) Based on basic design appraised by the Ministry of Tranport, BEDC nominated consultant to execute land acquisition boundary land-marking so as to hand over to Tien Giang Provincial People’s Committee for implementation of site clearance and resettlement work. With respect to public works to be relocated for purpose of site clearance (such as health, education, hydraulic, power, telecommunication, transport works, etc.), in order to speed up site clearance progress, Investor of site clearance, resettlement sub-project is allowed to prepare only economic - technical construction works report, one-step design and permitted to nominate qualified and eligible unit to implement contract of consultancy, construction, installation and equipment purchasing.

2. Regarding Project implementation:

a) Loans for Project implementation

- Bank for Investment and Development of Vietnam (BIDV) is permitted to raise domestic and foreign capital in according to Law on Credit Institutions (including ODA, if any) for relending to BEDC. The Government will gurantee these foreign loans if there is request from the foreign partner;

- BIDV is exempted from appraising BEDC’s loan dossier.

b) Form of contractor selection

At its discretion, BEDC decides on contractor selection ensuring requirement of the Project’s progress, effect.

c) Support on Project implementation

BEDC is permitted to take over the status quo (facilities, labor) of My Thuan Bridge toll station to organize toll collection since April 1, 2010, creating resources to support the implementation of BOT projects. The revenues of this fee was included in the financial plan of the Trung Luong - My Thuan Expressway Project.

d) Operation of services along route

BEDC has the exclusive right to exploit the services and infrastructure within the road scope (including underground works) and exclusive right to do advertising sales along the Ho Chi Minh city - Trung Luong Expressway and Trung Luong - My Thuan Expressway within operation period in accordance with legal stipulations.

e) Other supporting policies:

- BEDC is exempted from the obligation to ensure the implementation of the BOT contract;

- BEDC is exempted from all land use fees in the process of exploitation of functional areas for expressway management and operation, including Management Center, service area, and logistics area for expressway.


PPaaggee AA..33--33

3. Assignment:

a) Ministry of Transport

- Perform duties of state agencies authorized to sign and implement the project contract;

- Coordinate with relevant ministries to determine norm, cost for the work of expressway organization, management and operation;

- Decide to hand over the My Thuan bridge toll station to BEDC according to paragraph c, Clause 2 of this Article.

b) Ministry of Finance

- On behalf of the Government, guarantee foreign loans of BIDV (if any) to implement the Project;

- Lead and coordinate with the Ministry of Natural Resources and Environment and People's Committees of provinces and cities involved in determining forms of preferential treatment for BEDC on the costs of land use right transfer, land renting ... when BEDC plays as investor of supporting projects.

c) Ministry of Planning and Investment

- Coordinate with BIDV to fulfill procedures for ODA loan arrangement (if any) to re-lend BEDC under current regulations;

- Guide and create favorable conditions on procedures for foreign investors contributing capital to the BEDC.

d) Ministry of Natural Resources and Environment

Guide and supervise the implementation of compensation, resettlement assistance, site clearance as a basis for implementing the plan of site clearance and land incentives for BEDC.

e) Tien Giang Provincial People’s Committee

- Perform site clearance work as stipulated in Clause 1 of this Article;

- Priority for land allocation for the BEDC to invest in urban areas infrastructure construction, industrial zones, service areas to recover capital sources for Expressway investment project, in accordance with planning approved by competent authorities.

Article 4. This Decision takes effect from the date of signing.

The Ministers, Heads of Ministerial-level agencies, Heads of agencies under the Government, Chairman of Tien Giang Provincial People's Committee of, General Director of the Bank for Investment and Development of Vietnam, General Director of BIDV Expressway Development Company and the relevant agencies are responsible for implementation of this Decision./.


PPaaggee AA..33--44

Received by: - Prime Minister, Deputy Prime Ministers; - The Ministries, Ministerial-level agencies, agencies under the Government; - Office of the Central Steering Committee on the prevention of corruption; - People's Committees of provinces and cities: Ho Chi Minh City, Long An, Tien Giang, Dong Thap, Vinh Long, Can Tho; - Central Office and Departments of the Party; - Office of the President; - Ethnic Council and the Committees of the National Assembly; - National Assembly Office; - People's Supreme Court; - People's Supreme Procuracy; - State Auditor; - Vietnam Development Bank; - Bank for Investment and Development of Vietnam; - State Council for the construction works acceptance; - BIDV Expressway Development Company; - State Steering Committee for key projects, construction works in transport sector; - Government Office: Chairman, Deputy Chairmen, Electronic Communication Port, the Departments: KTTH, DP, International Relations, DMDN, TH; - File: Office, KTN (5b)

PRIME MINISTER

(signed and sealed)

Nguyen Tan Dung

AAppppeennddiixx AA..44:: PPrriimmee MMiinniisstteerr’’ss LLeetttteerr NNoo..11662255//TTTTgg--KKTTNN


PPaaggee AA..44--11

GOVERNMENT PRIME MINISTER SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness

------------------------------ ------------------------------------------ No. 1625/TTg-KTN

Re: Transfer of toll collection right on Ho Chi Minh city - Trung Luong

Hanoi, September 11, 2009

To: Ministries: Finance, Transport; Bank for Investment and Development of Vietnam; BIDV Expressway Development Company (BEDC);

In consideration of proposal from Ministry of Finance (Document No.

77/BC-BTC dated July 28, 2009) and Bank for Investment and Development of Vietnam (Document No. 818/CV-BIDV dated August 12, 2009); Pursuant to conclusion of Government Standing Meeting dated September 9, 2009 on transfer toll collection right on Ho Chi Minh city - Trung Luong Expressway, following are Prime Minister's guidance:

1. In principle, approve the transfer of right to collect toll fee on Ho Chi Minh city - Trung Luong Section as proposed by Finance Ministry in above said Document with transfer period as 25 years, and payment to be made in the first 3 years (VND 2,000 billions in the 1st year, VND 3,000 billions in the 2nd year and VND 4,156,853 billion in the 3rd year).

2. Assign the Ministry of Transport to lead the coordination with Finance Ministry and BIDV in establishing the contract for transfer of toll collection right upon foresaid principle, and re-calculate the toll rate so to be appropriate, and sign the contract with BIDV Expressway Development Company (BEDC)

3. The Implementation of item Management Center and Toll Plazas shall be realized as instructed by Government Prime Minister under Document No. 837/TTg-KTN dated May 29, 2009.

4. Allow BIDV Expressway Development Company (BEDC) to apply contract nomination for bidding packages for consultancy, construction and supply of toll collection system equipment (including toll plazas on National Road 1A, Section Binh Chanh - Trung Luong.

5. The Ministry of Transport shall soon assess design documents and hand-over the site to BEDC for investing in toll plazas and other operation items.

6. Assign the Ministry of Transport to speed up the preparation works of investment in Ninh Binh - Ha Tinh Expressway section; lead the coordination with Ministry of Finance and Ministry of Planning and Investment in assessment of using amount obtained from sell above mentioned toll collection right for assisting BOT or PPP investment and submit for approval of Prime Minister.


PPaaggee AA..44--22

Received by: - As above; - Prime Minister, Vice Prime Minister; - Ministries: Planning and Investment, Construction' - State Bank of Vietnam; - My Thuan PMU; - Government Office, Chairman and Vice Chairmen (Van Trong Ly, Pham Van Phuong); - Electro-Exc.Gate; Departments: KTTK, TH; Archive: VT, KTN (4 copies), HH 26

PRIME MINISTER

(Signed and sealed)

Nguyen Tan Dung

AAppppeennddiixx AA..55:: IInnvviittaattiioonn ffoorr FFiinnaanncciinngg ooff TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy CCoonnssttrruuccttiioonn IInnvveessttmmeenntt PPrroojjeeccttss


PPaaggee AA..55--11


PPaaggee AA..55--22

AAppppeennddiixx BB:: MMeeeettiinngg MMeemmoo

PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt AAppppeennddiixx BB

PPaaggee BB--11

11.. EEmmbbaassssyy ooff JJaappaann iinn VViieettnnaamm ((EEOOJJ))

EOJ welcomed BT scheme of one idea of PPP scheme for the expressway projects in Vietnam, counting on limitation in ODA budget. While EOJ raised three (3) concerns in terms of BT scheme.

- It may be difficult to allocate “valuable projects” in Vinh Long Province which could accord and satisfy the My Thuan - Can Tho Expressway Construction Project.

- It may be difficult to secure “valuable projects” before finance closing.

- It may be difficult to negotiate with PC because PC is not a direct beneficiary of the contract of expressway projects in terms of provision land for expressway projects.

22.. CCeennttrraall NNiippppoonn EExxpprreesssswwaayy CCoommppaannyy LLiimmiitteedd VViieettnnaamm OOffffiiccee ((NNEEXXCCOO--CCeennttrraall))

NEXCO-Central continues strengthening relations with PMU My Thuan.

NEXCO-Central is to be permitted to develop the 30 km length expressway.

NEXCO-Central’s possible scope shall be investment, design, and construction of expressway in Vietnam.

O&M contract style would fit NEXCO-Central more than O&M concession in terms of profitability, because of high labor cost of Japanese expressway company.

NEXCO-Central thinks it difficult to develop expressway project under BT scheme by itself and needs a partner with expertise of property development.

There is not enough information about BT scheme in Vietnam, such as land cost for accord and satisfaction, as well as final earnings from the BT scheme.

There are not sufficient fire-fighting and ambulance cars in Vietnam. O&M provider should take measures on its own for the car accidents.

33.. BBIIDDVV EExxpprreesssswwaayy DDeevveellooppmmeenntt CCoommppaannyy ((BBEEDDCC))

BEDC was initially established for investment to the Trung Luong - My Thuan - Can Tho Expressway Construction Project.

BEDC made BOT contract with MOT for 35 years operation period.

BEDC is looking for finance from lenders such as ADB and JICA.

As additional development right, BEDC takes over toll collection right on NH1A, and My Thuan Bridge, moreover, BEDC is permitted to exploit services and infrastructure within the road scope (including underground works) and advertising sales along the HCMC - My Thuan section.

44.. JJaappaann EExxtteerrnnaall TTrraaddee OOrrggaanniizzaattiioonn HHCCMMCC OOffffiiccee ((JJEETTRROO))

Nissui, Acecook, Furukawa electric and Trion have subsidiary in the Mekong River Delta area.

Japanese company tends to build an office in HCMC rather than in the Mekong River Delta area, because it is thought that HCMC has good access to transportation and employees in HCMC work harder than those who live in the Mekong River Delta area.

There is an abundant labor force in the Mekong River Delta area.

In general, it is difficult to forecast motorization and to make accurate transport demand forecasting. So it is indispensable for the government to assume traffic risk to attract investors.


PPaaggee BB--22

55.. HHooggaann LLoovveellllss ((LLaaww FFiirrmm))

About PPP scheme

PPP task force leader will be selected and notified after the TET holidays.

State may not take any direct equity in project companies. There is some discussion about convertible loan (which can be converted to equity later), whether it is counted as equity or loan.

The lawyer proposed to use the English Law as the governing law, as hundreds of PPP projects have been carried out in UK under the English Law.

There have been lots of disputes about VGF, and the government may need a donor to create such funding. However, no specific instruction is given in the PPP Framework.

With regard to money conversion & transfer risk, the government is not willing to guarantee over than 30% of profit. It would be better for sponsor to push the Prime Minister to guarantee 100% of profit.

With regard to implementation program, MOF, MOJ, etc. may give opinion about PPP project. MOF has big power as for VGF.

Relationship between BOT and PPP scheme in Vietnam is as follows.

i) Basically all infrastructure projects (with BOT arrangement) will be governed by BOT Law.

ii) PPP framework applies to the selected projects as shown in the figure, in which there are some benefits such as maximum 30% state contribution, etc.

iii) Some other projects instructed by the Prime Minister may have a different category.

All Infrastructures

(BOT) Projects

PM’s SpecialProjects

PPP

About BT scheme

This type of scheme may not be viable for less developed areas outside of metropolis where the land value is generally low.

66.. TThhee PPeeooppllee’’ss CCoommmmiitttteeee ooff VViinnhh LLoonngg PPrroovviinnccee ((VViinnhh LLoonngg PPCC))

General Development Plan in the 2nd phase from 2011 to 2015 was drafted, which could not be provided to the Study Team.

Priority of the project in this region is: development of urban areas is planned at three locations at east side of expressway and agriculture development is planned at west side of expressway.

Main natural resource is clay.

Vinh Long PC requested the Study Team to consider mitigation of harmful affect to environment due to the expressway. If any contact is required, the Study Team can contact with department of Agriculture.


PPaaggee BB--33

77.. HHooaa PPhhuu JJooiinntt SSttoocckk CCoommppaannyy

Advantages of this industrial zone are: Reasonable rent price, location at the center of the Mekong River Delta area, and abundant labor force.

Disadvantages of this industrial zone are: Poor infrastructures and many rivers in the Mekong River Delta area make access difficult.

88.. JJaappaann IInntteerrnnaattiioonnaall CCooooppeerraattiioonn AAggeennccyy VViieettnnaamm OOffffiiccee ((JJIICCAA))

There are some Infra-funds in Hanoi, HCMC and Da Nang, structured by WB.

With regard to BT scheme, lenders need “development rights” of the land as security. Piling stakes has to be done prior to finance closing.

It may be difficult for developer to find “valuable projects and land” along expressways, because most of the lands have been allocated already, and it is tough to deal land acquisition.

It is possible for local contractors to construct road, but is difficult for them to construct a big and long bridge like the Can Tho Bridge.

JICA is willing to support the My Thuan - Can Tho Expressway Construction Project, because the Mekong River Delta area is a big grain-growing region and it is valuable to improve transport link between Can Tho City and HCMC.

99.. AAssiiaann DDeevveellooppmmeenntt BBaannkk ((AADDBB))

It seems to be difficult to implement the My Thuan - Can Tho Expressway Construction Project under PPP scheme, based on ADB’s experience in expressway projects in section Noi Bai - Lao Cai, HCMC - Long Thanh - Dau Giay, Ben Luc - Long Thanh, Hanoi - Lang Son.

BEDC submitted his proposal to the government in the end of last year, for collection of toll by VND1,000/km from users of the HCMC - Trung Luong Expressway on and after April 30, 2011. If this proposal is once approved, toll fee on other sections could not be set freely and it may be difficult to propose other toll fee system without specific reasons.

ADB will not provide with financing unless the front-end section of the My Thuan - Can Tho will be opened, and wonders if ADB should provide with remedies with enlarging its project scope up to the front-end section of the My Thuan - Can Tho, including the Second My Thuan Bridge.

Public sector can reinforce its project management skill through implementation of projects under PPP scheme.

The government should develop “needed” infrastructure projects in stead of viable ones. One of the roles of ADB is to have the government to grant funds into infrastructure projects as much as possible.


PPaaggee BB--44

1100.. MMyy TThhuuaann PPrroojjeeccttss MMaannaaggeemmeenntt UUnniitt ((PPMMUU MMyy TThhuuaann))

BEDC prepares the space for a traffic management center on the HCMC - Trung Luong section, and Korean company will develop the ITS system.

It cost about VND7,800 billion for the government to construct the HCMC - Trung Luong section, and the government transferred the O&M concession in this section to BEDC by VND9,880 billion.

The Prime Minister permitted increase of toll fee by up to 30% every 5 years on the HCMC - Trung Luong section. Unless 30% increase is sufficient for investors, they have to recover capital through extension of concession period.

PMU My Thaun expected to apply PPP framework for the My Thuan - Can Tho Expressway Construction Project and sent the Statement No.3183/BGTVT-TCCB by way of MOT.

About Cuu Long CIPM, refer to Chapter 4.3 in this Study Report. PMU My Thuan would set reasonable toll fee system as well as alternative revenue

sources for investors to recover their capital. Because 3 different schemes would be applied for the sections HCMC through Can Tho, such as Public//BOT/PPP projects, and every factors are different in respective section such as investors, investment timing, number of employees, traffic volume, etc.

Procedure of land acquisition: - Firstly, SPC should submit resettlement plan to MOT, - Then, MOT propose the plan to the Prime Minister, - Finally, the Prime Minister will instruct the Ving Long PC to allocate the land after its

approval of the plan. If SPC needs “right of way” along expressway to enhance the revenue of expressway

project, SPC can discuss with MOT and submit the plan. SPC does not need to discuss with the PC.

PMU My Thuan was unable to comment about risk allocation in PPP scheme, and commented that it would respond after further study.

1111.. MMiinniissttrryy ooff TTrraannssppoorrttaattiioonn ((MMOOTT))

BOT scheme is formulated originally for local companies. However, foreign companies have developed BOT projects in Vietnam, because of huge amount needed to promote projects such as IPP and Ports, as well as lack of project management skill by local companies. With regard to expressway sector, MOT plans to allow foreign companies and financiers to join the project, because it needs big investment.

There are many unclear article for investors in the Decree No.108/2009/ND-CP because of lack of detailed regulations although process is described clearly. It is then difficult for MOT to understand it and to manage project under the Decree No.108. It makes many troubles for both investors and MOT in implementation phase, and ultimately MOT has obligations to solve the troubles.

On the other hand, it is easy to understand the policy in Decision No.71/2010/QD-TTg. MOT would start promoting the expressway project which has much traffic volume and

less viability gap. MOT would select priority projects pursuant to F/S to be prepared by ADB and WB. Road projects account for about 80% amongst the whole infrastructure, and the Dau Giay - Phan Tiet Expressway would be the first PPP pilot project, for which WB made the F/S.

Basically, SPC has to cover the cost for land acquisition. There is a possibility for SPC to get a free land, provided that PC has budget for land acquisition.


PPaaggee BB--55

1122.. MMiinniissttrryy ooff PPllaannnniinngg aanndd IInnvveessttmmeenntt ((MMPPII))

As the Study Team indicated, it is impossible to achieve 2,500 km of expressway by the year 2020 just with the state budget and ODA, which would cost USD20 billion, pursuant to the Expressway Network Master Plan (Decision No.1734/QD-TTg).

MPI welcomes the Study Team to analyze applicable PPP scheme including BT scheme, but thinks that it is difficult to achieve the expressway project with revenues from another project such as industrial park business in case of BT scheme.

The Study Team was suggested to keep contact with Department for Infrastructure and Urban Centers which is responsible for Infrastructure, as well as Public Procurement Agency which is responsible for Decision No.71.

The Study Team can learn the priority projects of expressway by the list drawn up by VITRANSS2.

AAppppeennddiixx CC:: DDrraafftt TTeerrmmss ooff RReeffeerreennccee

AAppppeennddiixx CC..11:: DDrraafftt TTeerrmmss ooff RReeffeerreennccee ffoorr JJIICCAA PPPPPP--FF//SS ((TTrruunngg LLuuoonngg -- MMyy TThhuuaann EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt))

PPrreelliimmiinnaarryy SSttuuddyy oonn TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy CCoonnssttrruuccttiioonn PPrroojjeecctt AAppppeennddiixx CC..11

PPaaggee CC..11--11

DDrraafftt TTEERRMMSS OOFF RREEFFEERREENNCCEE FFOORR

CCOONNSSUULLTTIINNGG SSEERRVVIICCEESS OOFF

JJIICCAA’’ss PPRREEPPAARRAATTOORRYY SSUURRVVEEYY ((PPPPPP IINNFFRRAASSTTRRUUCCTTUURREESS))

OONN TTRRUUNNGG LLUUOONNGG –– MMYY TTHHUUAANN EEXXPPRREESSSSWWAAYY PPRROOJJEECCTT

11.. GGeenneerraall This Terms of Reference (TOR) describes the consulting services of JICA’s

Preparatory Survey (the Services) that the Consultants is expected to carry out examination of possibility and suitable type of PPP scheme in order to assist the Social Republic of Vietnam (GOV) for realization of the construction of a 4-lane expressway with 54.3km length between Trung Luong and My Thuan.

For implementation of the Services, the Consultant shall coordinate with Ministry of Transport (MOT) as the Authorized State Agency and BIDV Expressway Development Company (BEDC) as the Project Owner, and other relevant agencies for the success of the Services.

22.. BBaacckkggrroouunndd aanndd CCuurrrreenntt SSiittuuaattiioonn ooff tthhee PPrroojjeecctt

Currently, Government of Vietnam carries forward with the expressway network development program to meet the increase of road traffic demand by rapid economic growth in the country. However, most of the on-going expressway projects depend on the financing by the Development Assistance Agencies, and the counterpart funds strain the state finance. Accordingly, GOV expects to utilize private funds in future expressway projects.

The North-South Expressway (Eastern) was prioritized in the present expressway network development master plan (Decision No.1734/QD-TTg), and its detailed plan was approved by the Prime Minister in Decision No.140/QD-TTg dated on January 21, 2010. The Trung Luong - My Thuan - Can Tho Expressway was planned to develop before 2015 by BOT scheme.

In November 24, 2007, BIDV and some Vietnamese companies established BEDC, and obtained the BOT concession of the Trung Luong - My Thuan - Can Tho Expressway Construction Project from GOV.

The Feasibility Study was approved by MOT in Decision No.343/QD-BGTVT dated February 4, 2008 under form of BOT, and Environmental Impact Assessment (EIA) was approved by Ministry of Natural Resources and Environment (MONRE) in Decision No.2140/QD-TNMT dated on October 27, 2008 for Trung Luong – My Thuan – Can Tho section.

However, lack of the investment funds, the My Thuan - Can Tho section and the Second My Thuan Bridge were transferred to PMU My Thuan in May 2009 (Announcement No.137/TB-VPCP and Decision No.1318/QD-BGTVT).

On the other hand, BEDC was approved to obtain the Operation and Maintenance (O&M) concession of the HCMC - Trung Luong Expressway (25 years) by the Prime Minister in the letter No.1625/TTg-KTN dated on September, 2009. The concession price is approximately VND10,000 billion, and repay it in 3 years.


PPaaggee CC..11--22

At the moment, BEDC has been carrying out detailed engineering design which will be scheduled to complete in May 2011. However, detailed construction schedule has not been prepared yet because BEDC is seeking a project financing for further implementation of the Project under BOT form.

This expressway section is expected to have an important role as economic belt between the commercial capital of HCMC and Can Tho city to facilitate socio-economic development in the Mekong River Delta area where has potential of a national focal economic zone.

Therefore, the Trung Luong – My Thuan Expressway Project (the Project) is strongly expected to be implemented by PPP scheme with assistance of Japan International Cooperation Agency (JICA) for earlier realization of the Project.

33.. OOuuttlliinnee ooff tthhee PPrroojjeecctt The whole section of the Project goes through in Tien Giang province with a total

length of 54.3km and 8.35km linking road. Starting point (KM49+620) is Than Cuu Nghia Interchange located at Chau Thanh suburban district and ending point (KM103+933) is intersection with National Highway No.1A at North of My Thuan Bridge.

The Project is designed as Expressway A Class 120 (design speed: 120km/h). Cross section is designed with 4-motorized lanes with emergency stopping lanes in total width of 24.5m to 25.5m at initial stage and widen to 6-motorized lanes at ultimate stage after 2020. Road facilities on the route include 4 interchange, 43 large and small scaled bridges in total bridge length of approximately 11km, and traffic management facilities including toll gates with toll collection system and vehicle detection system etc.

44.. OObbjjeeccttiivveess ooff tthhee SSeerrvviicceess The objectives of the Services are set as follows in order to realize the Trung Luong –

My Thuan Expressway Project utilizing private investment.

(1) To review and update the existing Feasibility Study conducted under BOT scheme, particularly in terms of engineering, finance & economics and social & environmental aspects in order to meet the information required by PPP scheme

(2) To study the possibility and suitable type of PPP scheme 55.. CCoonnssuullttaannttss’’ CCoouunntteerrppaarrttss

BEDC who is the project owner authorized by GOV is to be considered as the counterpart to the Consultants. BEDC will be in charge of assisting the Consultants during the studies and also has roles for reviewing and submitting to MOT for approval on the final report etc. which will be prepared by the Consultant.

66.. PPrroojjeecctt AApppprrooaacchh The Project is expected to be funded by JICA. Therefore, GOV needs to comply with

the typical requirements for candidacy under JICA financing, including the formal investigations and studies to demonstrate the technical, financial, environmental and social viability of the Project.


PPaaggee CC..11--33

77.. SSccooppee ooff tthhee SSeerrvviicceess The Scope of the Services shall cover the following items:

1. Study on Current Conditions and Future Plan of Transport Sector in Mekong River Delta area

1) Study on social and economic condition and development plan

2) Study on current condition and future plans of transport sector

3) Confirmation on government policy of financial source for expressway development

2. Review and Development of Structure/ Facility Plan and Preliminary Cost Estimate for Construction and Operation of the Project

1) Review of the basic design in the existing feasibility study

a) Design Standard

b) Traffic Demand Forecast

c) Natural Condition Survey (topographic, hydrological, geological surveys)

d) Typical Cross Section

e) Route Selection

f) Intersection and IC Plan

g) Selection of Bridge Type

h) Selection of Softground Treatment Method

2) Structure and facility plan of the Expressway

3) Planning of the O&M System for the Project

a) examination of O&M standards for expressway

b) examination of organization and institution for O&M

c) proposal of O&M system for the Project

4) Preliminary cost estimate

a) initial investment cost and schedule for the Project

b) O&M cost

c) widening cost of the expressway

5) Conduct of environment and social consideration for the Project based on JICA's Guidelines for Environment and Social Considerations

3. Study on the existing PPP Scheme (BOT)

1) Analysis of organization and financial situation of BEDC

2) Study of existing BOT scheme

4. Study on Formation of PPP Project

1) Study on laws, policies and regulations regarding PPP

2) Study on suitable project scope (demarcation of scope and role between public and private sector)

3) Study on implementation structure for execution and operation of the Project

4) Study on financial source arrangement

5) Study on contract conditions of PPP Project between MOT and SPC


PPaaggee CC..11--44

6) Study on construction/ procurement package for PPP project

7) Recommendation of implementation schedule

8) Risk analysis for execution and operation of the Project

9) Study on risk allocation and risk sharing between the public and the private

10) Study on private investor/lender risks and recommendation of lender's security package

11) Planning of human resource development for the Project

12) Recommendation for current local laws and regulations regarding the project implementation

5. Project Evaluation

1) Project evaluation from technical, financial, environmental, and institutional and organization points of view (including financial analysis and evaluation by NPV, FIRR, B/C etc.)

88.. DDeessiirraabbllee ssppeecciiaalliissttss ffoorr tthhee SSeerrvviicceess

Input of the expatriate experts required for the Services will be expected as follows:

Expatriate Experts M/M 1) Team Leader/Expressway Development Planning 6.0 2) Investment Environment and Risk Analysis 4.0 3) PPP Project Scheme Study 4.0 4) PPP Legislation and Institution Study 2.0 5) Security Package Study 2.0 6) Traffic Demand Forecast 1.5 7) Expressway Design 2.5 8) Bridge Design 2.5 9) Construction Planning/ Cost Estimate 3.0 10) Economic & Financial Analysis 2.0 11) Operation and Management Planning 2.0 12) Environmental and Social Considerations 2.0

Total 33.5

The composition and number of the specialists is subject to change. The Consultant is encouraged to engage local consultants, NGOs, and other supporting staffs.

99.. SScchheedduullee aanndd EExxppeecctteedd MMaajjoorr OOuuttppuuttss The Services will be carried out in accordance with the tentative schedule as shown

in table below. The schedule may be subject to change during the preparation and the course of the Services.

Following reports will be prepared by the Consultant in timely manner along the schedule.

(1) Inception Report (2) Interim Report (3) Draft Final Report (4) Final Report


PPaaggee CC..11--55

1 2 3 4 5 6 7 8 9 10

1. Study on Current Conditions and Future Plan ofTransport Sector in Mekong River Delta area

2.Review and Development of Structure/ FacilityPlan and Preliminary Cost Estimate forConstruction and Operation of the Project

3. Study on the existing PPP Scheme (BOT)

4. Study on Formation of PPP Project

5. Project Evaluation

Inception ReportInterim ReportDraft Final ReportFinal Report

MonthsSurvey Items

6.

10. Undertakings of GOV

In order to facilitate a smooth and efficient conduct of the Services, GOV shall take necessary measures as follows:

(1) Arrange for necessary meetings with the local authorities related with the Services upon request by the Consultant,

(2) Assist the Consultant to obtain necessary data and documents from the relevant organizations,

(3) Assist with procedures for issuance of entry permits necessary for the Consultant’ members to conduct the Services,

(4) Ensure the safety of the Consultant’ members at place of works, (5) Assist the Consultant’ members as the need arises for any medical services which may

be required, (6) GOV shall bear the claims, if any arises against members of the Japanese study team

resulting from, occurring in the course of or otherwise connected with the discharge of their duties in implementation of the Services, except when such claims arise from gross negligence or willful misconduct on the part of the member of the Consultant.

(7) BEDC shall act as counterpart agency to the Consultant and also as coordinating body in relation with other governmental and non-governmental organizations concerned for the smooth implementation of the Services.

11. Obligation of Consultant

The Consultant, with his responsibilities, commits to successfully carry out all works as mentioned in this draft TOR and other works relevant to achievement of the assignment and all members of the Consultant shall comply with legislation, law and regulations in Vietnam, except for any stipulations agreed between GOV and JICA when carrying out the Services in Vietnam.

AAppppeennddiixx CC..22:: DDrraafftt TTeerrmmss ooff RReeffeerreennccee ffoorr JJIICCAA PPPPPP--FF//SS ((RReeggiioonnaall IInndduussttrriiaall DDeevveellooppmmeenntt PPllaann aalloonnggssiiddee TTrruunngg LLuuoonngg -- MMyy TThhuuaann -- CCaann TThhoo EExxpprreesssswwaayy))


PPaaggee CC..22--11

APPLICATION FOR TECHNICAL COOPERATION PROGRAM

DRAFT TERMS OF REFERENCE

REGIONAL INDUSTRIAL DEVELOPMENT PLAN STUDY

ALONGSIDE

TRUNG LUONG – MY THUAN – CAN THO EXPRESSWAY

IN MEKONG RIVER DELTA

IN

THE SOCIALIST REPUBLIC OF VIETNAM

March 2011

Department of Planning and Finance

Ministry of Construction

The Government of The Socialist Republic of Vietnam


PPaaggee CC..22--22

APPLICATION FOR TECHNICAL COOPERATION PROGRAM STUDY

ON

REGIONAL INDUSTRIAL DEVELOPMENT PLAN STUDY

ALONGSIDE TRUNG LUONG – MY THUAN – CAN THO EXPRESSWAY

IN MEKONG RIVER DELTA

IN THE SOCIALIST REPUBLIC OF VIETNAM

I. PROJECT DIGEST

1. Project Title: REGIONAL INDUSTRIAL DEVELOPMENT PLAN STUDY ALONGSIDE TRUNG LUONG – MY THUAN – CAN THO EXPRESSWAY IN MEKONG RIVER DELTA IN THE SOCIALIST REPUBLIC OF VIETNAM

2. Location: The Socialist Republic of Vietnam (Mekong River Delta)

(Study area will be covered four provinces, namely Long An, Tien Gian, Dong Thap and Vinh Long Provinces, and one city Can Tho)

3. Implementing Agency:

Department of Planning and Finance (Ministry of Construction)

4. Justification of the Project

(1) Background of Mekong River Delta & Study Area

The Mekong River Delta looks like a peninsula with three faces: West, North and Southeast with coastline over 700 km on the southeast and west. It is located on relatively flat terrain with range of rivers and canals. It borders with Cambodia in the northwest, and with the largest economic region of Ho Chi Minh City to the Northeast. In terms of international relation, the region is on a coastal route from Vietnam to Cambodia, namely Sihanoukville with a deep seaport and further connects to Thailand along the coastal line of Siam Bay. This route is often referred to as the coastal route in the Southern Economic Corridor from Vietnam, Cambodia to Thailand.

The Mekong River is an international river that connects the Mekong River Delta region to Phnom Penh, the capital city of Cambodia, and also further connects to Siem Reap through a bifurcation of the Mekong river. The Vietnamese Mekong River Delta forms the most downstream portion of the Mekong River basin. With a population of over 17 million inhabitants, some 21% of the national population, inhabiting an area of about 40,518 km2, it is the most densely populated agrarian region within the entire Mekong Basin.


PPaaggee CC..22--33

Source: http://dautumekong.vn

FFiigguurree--11 LLooccaattiioonn ooff MMeekkoonngg RRiivveerr DDeellttaa aanndd ““SSttuuddyy AArreeaa”” iinn VViieettnnaamm

With the topographical and hydro-meteorological characteristics, the delta has fast become the most important agricultural region for the country, contributing more than 50% of staple food crops and 60% of fish production in Vietnam, and it now contributes 27% of the total GDP of Vietnam. Besides rapid agricultural growth, the industrial sector has recently also grown rapidly, particularly in agro-processing and manufacturing.

Mekong River Delta is also an important area to the South and the country in economic development, investment cooperation and trade with other countries in the region. The region is rich in natural resources and has favorable conditions for economic cooperation and development. Thus, it is favorable location and has a positive conditions for seafood exploitation, agro based industries, port services, import and export, tourism and marine transport.

The Mekong River Delta has 13 administrative divisions which consists of 1 central city, Can Tho and 12 provinces i.e. Long An, Dong Thap, An Giang, Tien Giang, Ben Tre, Vinh Long, Tra Vinh, Hau Giang, Kien Giang, Soc Trang, Bac Lieu and Ca Mau

Study Area

Considering the recent development in transportation system and highways, and industrial growth the proposed study will focus and cover the following 4 provinces and 1 city as follows:


PPaaggee CC..22--44

1. Long An 2. Tien Giang 3. Dong Thap 4. Vinh Long 5. Can Tho city

The study area has been highlighted by red broken lines in the Figure 1 as shown above and will cover an area of 13234.1 sq km. As per General Statistic Office of Vietnam, the average population of area is approximately 7 million with a population density of 606.6 persons per sq km.

TTaabbllee 11:: PPooppuullaattiioonn aanndd AArreeaa ddeettaaiillss ooff MMeekkoonngg RRiivveerr DDeellttaa aanndd SSttuuddyy AArreeaa ((22000099))

Average population (Thous.

pers.)

Area (Km2) (*)

Population density

(Person/km2) Whole Country 86024.6 331051.4 260

Mekong River Delta 17213.4 40518.5 425 Study Area

Long An 1438.5 4493.8 320 Tiền Giang 1673.9 2484.2 674 Vĩnh Long 1029.8 1479.1 696 Đồng Tháp 1667.7 3375.4 494

Cần Thơ 1189.6 1401.6 849 Total 6999.5 13234.1 606.6

(*) Area data as of 01 January 2009 according to Decision No. 2097b/QD-BTNMT dated 29 October 2009 of Minister of the Ministry of Natural Resources and Environment Source : General Statistics Office of Vietnam

The proposed Trung Luong – My Thuan – Can Tho Expressway passes along the Study Area. (covering four provinces, namely Long An, Tien Gian, Vinh Long and Dong Thap Provinces, and one city Can Tho). The Study Area is basically agrarian-based, with more than half of the population engaged in primary industry, but recently a fast paced industrialization has been observed. On an average, the industrial output between 2000 and 2008 was about 20 to 24% per annum in the Study Area. With further improvement and expansion of Expressway, such as the opening of HCMC(Long An) – Trung Luong Section, will trigger further growth specially in industrial sector in the Study Area, which is also near to HCM metropolitan area, the major industrial region in Vietnam.

Landuse

The Mekong River Delta is one of the great and fertile plains of Southeast Asia and the


PPaaggee CC..22--55

world. It is the largest food exporting, producing area as well as the biggest tropical fruit region of Vietnam. Annually, this delta produces the highest yield of food, seafood and tropical fruit in Vietnam. For provinces situated in the region in Mekong River Delta, agriculture, forestry and aquiculture are major sectors. Over the last decades, agriculture, forestry and aquiculture grew steadily; exerting positive impacts on the regional economic development and food yield usually makes up 50% of national yield. Such high yield is very well supported by the landuse in the region. In Mekong River Delta, the majority of the land area i.e. 78.8% is used for agriculture production. The landuse trend is not so different in the study area too. In the study area, 80.1% of land is utilized for agriculture production (refer Figure 2).

Landuse in Study Area (Jan 2009)

0

200

400

600

800

1000

1200

Agricultural productionland

Forestry land Specially used land Homestead landLanduse

Are

a (in

Tho

usan

d ha

)

Source: General Statistics Office of Vietnam

FFiigguurree 22 LLaanndduussee iinn MMeekkoonngg RRiivveerr DDeellttaa RReeggiioonn

Tourism

The Mekong River Delta has an immense potential in tourism sector. It is a rich region with diverse landscapes, a network of entangled waterways and unique natural reserves. It possesses coastline, forest, and abundant local specialties; the climate is temperate throughout the year. However, despite such favourable conditions, tourism in the Mekong River Delta has not matched its potential. The reasons are repetitious products and poor transportation and tourism infrastructure. The Government is now paying major attention to promoting the delta's tourism, especially in the context of sustainable tourism development.

According to the statistics, the number of local and international visitors to the Mekong River Delta since 2000 has increased continuously. As per the available statistics, in 2008, more than 8 million tourists visited the Mekong River Delta region, which includes more than 1 million of international tourists. However, in comparison with other regions, the


PPaaggee CC..22--66

growth rate of the Mekong River Delta's tourism has remained low. The most pressing problem is the deficiency in tourism infrastructure and accommodation. Most hotels are small, with an average of 20 rooms. The luxury hotels such as three star hotels and above are very less in numbers. Half of the staff who works in the tourism industry is unqualified. Advertising and promotional campaigns remain weak and tourism products are dull and lacking in vitality.

Foreign & Domestic Tourist in Mekong Delta Region

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2001 2002 2003 2004 2005 2006 2007 2008Year

Tour

sit i

n Th

ousa

nds

Foreign Domestic

Note : Due to unavailability of data, the above figure doesn’t include the data from Hau Giang and Soc Trang province Source: General Statistics Office of Vietnam

FFiigguurree 33 FFoorreeiiggnn && DDoommeessttiicc TToouurriissttss iinn MMeekkoonngg RRiivveerr DDeellttaa RReeggiioonn

In 2008, among the provinces and city in Mekong River Delta region, the Can Tho city, Tien Giang, Vinh Long and Kien Giang received the maximum number of tourist. Of the total tourist arrival in Mekong River Delta, the study area attracted approximately 41% of the tourists. Can Tho city and Tien Giang shared approx. 12.4 % and 11.7% respectively of the total tourist in Mekong River Delta region.


PPaaggee CC..22--77

Domestic & Foreign Tourist in Selected Provinces of Mekong Delta (2008)

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

LON

G A

N

TIỀN

GIA

NG

BẾN

TR

E

TRÀ

VIN

H

VĨN

H L

ON

G

ĐỒ

NG

THÁP

KIÊN

GIA

NG

CẦN

THƠ

BẠC

LIÊ

U

CÀ

MAU

No.

of T

ouris

t in

Thou

sand

s

Domestic Foreign


FFiigguurree 44 DDoommeessttiicc && FFoorreeiiggnn TToouurriissttss iinn SSeelleecctteedd PPrroovviinncceess ooff MMeekkoonngg RRiivveerr DDeellttaa

Share of Toursit in the Study Area of Mekong Delta (2008)

CẦN THƠ12.4%

LONG AN 2.6% TIỀN GIANG

11.7%

VĨNH LONG7.5%

ĐỒNG THÁP6.8%

LONG AN TIỀN GIANGBẾN TRETRÀ VINH VĨNH LONGĐỒNG THÁPAN GIANGKIÊN GIANGCẦN THƠ BẠC LIÊUCÀ MAU

Note : Due to unavailability of data, the above figure doesn’t include the data from Hau Giang and Soc Trang province


FFiigguurree 55 SShhaarree ooff TToouurriissttss iinn tthhee SSttuuddyy AArreeaa ooff MMeekkoonngg RRiivveerr DDeellttaa

Considering these trends, the study area has a vast potential to be one of major tourist destination in Mekong River Delta as well as in Vietnam. However, to realize this, it is


PPaaggee CC..22--88

necessary to strengthen tourism sector by improving tourism infrastructure and increasingly diverse tourism products. Recognizing such potential, during the "Sustainable Tourism Development in the Mekong River Delta" workshop held in Can Tho in December 2009, Minister of Culture, Sports and Tourism stressed on the tourism development based on local strength, creating unique products that link regions and possibly joint foreign tours.

(2) Present Condition

Economic Structure:

Mekong River Delta shares approximately 21% of total Vietnam population and 23% of the country’s GDP in 1993. The GDP share has fallen to 15-16 per cent in 2005. The Foreign Direct Investment (FDI) is still very low compared to the economic and resources potential. For over 20 years, from 1988-2009, total registered investment capital in the Mekong River Delta are only about USD 8 billion, accounting for 4% of the total FDI of the country. The major reason for the above two issues i.e. low FDI and falling of GDP share is mainly due to the Delta’s inadequate infrastructure and limited growth in industrial sector.

Source: Vietnam Baseline Perspective, Key issues and trends in the Mekong River Delta (Research

Paper)

FFiigguurree 66 TTrreenndd ooff GGDDPP ccoonnttrriibbuuttiioonn ooff MMeekkoonngg RRiivveerr DDeellttaa

On analyzing the industrial output value at current prices by region, then the share of Mekong River Delta region has gradually lowered from about 11.2% in 1996 to 9.8% in 2008. On comparing the share of industrial output value at current prices of Mekong River Delta with other regions in Vietnam, the share of Mekong River Delta (9.8%) is less than one-fifth of top performing province i.e. South East (52.4%). Considering the vast potential in Mekong River Delta region, it is important to plan and build adequate infrastructure for economic, tourism and industrial development and improve its share in Vietnam.


PPaaggee CC..22--99

Percenatge Share of Industrial Output Value by Mekong River Delta

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Perc

enta

ge

Source: General Statistical Office, Vietnam

FFiigguurree 77 PPeerrcceennttaaggee SShhaarree ooff IInndduussttrriiaall OOuuttppuutt vvaalluuee bbyy MMeekkoonngg RRiivveerr DDeellttaa

Percentage of Industrial Output Value in 2008 in Vietnam

North Central area and Central

coastal area, 6.5%

Central Highlands, 0.8%

South East , 52.4%

Red River Delta, 24.7%

Mekong River Delta, 9.8%

NEC., 2.9%

Northern midlands and

mountain areas, 2.9%

Source: General Statistical Office, Vietnam

FFiigguurree 88 PPeerrcceennttaaggee SShhaarree ooff IInndduussttrriiaall OOuuttppuutt VVaalluuee iinn tthhee RReeggiioonnss,, VViieettnnaamm

However, despite of lowering of share of Mekong River Delta in Vietnam, the industrial output has increased. On analyzing the gross industrial output at 1994 prices in the provinces and city in Mekong River Delta and in the study area as shown in the Figure below, shows the trend of gradual increase in industrial output since 2000. Overall, in Mekong River Delta, the gross industrial output increased from 23,152 million VND in 2000 to 93,375 million VND in 2008. Among the industrial sectors, manufacturing sector is a major contributor as shown in Figure below. The Can Tho City and Long An province which are also a part of study area leads in gross industrial output over the other


PPaaggee CC..22--1100

provinces in Mekong River Delta. In 2008, the study area which consist of Can Tho city and 4 provinces i.e. Long An, Tien Giang, Vinh Long and Dong Thap contributed more than 50% of the total gross output in Mekong River Delta region. However, as stated earlier too that due to inadequate infrastructure and limited investment, the Study Area didn’t able to contribute to its potential. It has a vast scope and potential for industrial development.

Gross Industrial Ouput (1994 prices) of the Provinces/City in Mekong Delta

0.02000.04000.06000.08000.0

10000.012000.014000.016000.018000.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 Pre.2009Year

in M

illio

n VN

Don

gs

LONG AN

TIỀN GIANG

BẾN TRE

TRÀ VINH

VĨNH LONG

ĐỒNG THÁP

AN GIANG

KIÊN GIANG

CẦN THƠ

BẠC LIÊU

CÀ MAU

HẬU GIANG

SÓC TRĂNG


FFiigguurree 99 GGrroossss IInndduussttrriiaall OOuuttppuutt ooff tthhee PPrroovviinncceess//CCiittyy iinn MMeekkoonngg RRiivveerr DDeellttaa

Share of Industrial Output of Study Area in Mekong Delta (2008)

CẦN THƠ16%

LONG AN 15%

TIỀN GIANG7%

VĨNH LONG4%

ĐỒNG THÁP8%

LONG AN

TIỀN GIANG

BẾN TRE

TRÀ VINH

VĨNH LONG

ĐỒNG THÁP

AN GIANG

KIÊN GIANG

CẦN THƠ

BẠC LIÊU

CÀ MAU

HẬU GIANG

SÓC TRĂNG


FFiigguurree 1100 SShhaarree ooff IInndduussttrriiaall OOuuttppuutt ooff tthhee SSttuuddyy AArreeaa iinn MMeekkoonngg RRiivveerr DDeellttaa



Gross Industrial Output (1994 prices) of diiferent Sectors in the Province/City of Mekong Delta (2008)

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

14000.0

16000.0

LON

G A

N

TIỀN

GIA

NG

BẾN

TR

E

TRÀ

VIN

H

VĨN

H L

ON

G

ĐỒ

NG

TH

ÁP

AN G

IAN

G

KIÊN

GIA

NG

CẦN

THƠ

BẠC

LIÊ

U

CÀ

MAU

HẬU

GIA

NG

SÓC

TRĂN

G

in m

illion

VN

Don

gs

Mining and quarrying Manufacturing Electricity, gas and w ater supply


FFiigguurree 1111 GGrroossss IInndduussttrriiaall OOuuttppuutt ooff ddiiffffeerreenntt SSeeccttoorrss iinn tthhee PPrroovviinnccee//CCiittyy ooff MMeekkoonngg

RRiivveerr DDeellttaa

On further analyzing the economic structure of Mekong River Delta and as shown in figure below, it reveals that the agriculture, forestry and aquiculture in the region makes a greater contribution; conversely, service and industry sectors make a smaller contribution.

Economic Structure of Mekong Delta

0100002000030000400005000060000700008000090000

100000

Agriculture-Forestry-Aquiculture

Industry-Construction Service Sectors

Bill

ion

VN D

ong

Source: Study Report on My Thuan – Can Tho Expressway Construction Investment Project

FFiigguurree 1122 EEccoonnoommiicc SSttrruuccttuurree ooff MMeekkoonngg RRiivveerr DDeellttaa The majority of the labor force engagement in agriculture sector justifies the above economic structure. In 2008, approx. 62% of the total labor force was engaged in agriculture, forestry and fishery sector followed by approx. 25% in service sector. The



industrial and construction sector only engaged approx. 13% of the total labor force in Mekong River Delta. The trend is almost same in all the provinces/city with an exception of Long An province where approximately 30% of the labor force in 2008 was engaged in industrial sector. However, here too the majority i.e. 48% of the labor force was engaged in agriculture sector. Considering the labor composition and limited industrial growth, it is high time to utilize the available human resource in much more effective way.

Composition of Labor Force in the Provinces/City in Mekong Delta (2008)

0%

20%

40%

60%

80%

100%

LON

G A

N

TIỀ

NG

IAN

G

BẾN

TR

E

TRÀ

VIN

H

VĨN

HLO

NG

ĐỒ

NG

THÁ

P

AN

GIA

NG

KIÊ

NG

IAN

G

CẦ

N T

HƠ

BẠC

LIÊ

U

CÀ

MA

U

HẬU

GIA

NG

SÓ

CTR

ĂNG

Perc

enta

ge

Agriculture, Forestry and Fishery Indutry and Construction Services


FFiigguurree 1133 CCoommppoossiittiioonn ooff LLaabboorr FFoorrccee iinn tthhee PPrroovviinncceess//CCiittyy iinn MMeekkoonngg RRiivveerr DDeellttaa

The three major contributing sectors in economy in Mekong River Delta and in the Study Area are:

Agriculture: Rice is the main crop and most highly specialized product in this area. Production of paddy area in 2009 reached 20.483 million tons, accounting for 52.66% of national output, with an annual growth rate of about 3.2% per year (the country about 3.1% per year). Every year, the Mekong River Delta rice contributed most to the supply and demand of the country accounting to 90% of the country's rice exports. As per the statistics, in proposed study area, in 2009 the cultivation sector contributed 22,442.43 million VND through products such as rice, fruits etc.

In addition to rice cultivation, fruit and other agricultural products are also considered as the strength of the Mekong River Delta such as Nam Roi grapefruit, mango, tangerine, star apple, beans soy, sugar cane, peanuts, pineapple, coconut and vegetables, beans. Those products are served for domestic consumption, production and export and they are more well-known in the world recently.



Aquaculture: After the agriculture, it is farming and fishing. With 8/13 provinces bordering the sea, there are two major rivers such as Tien and Hau River which are parallel with the East provinces, the Mekong River Delta has very favorable conditions for aquaculture and salt water, brackish and freshwater. Production of fishery in the region in 2009 reached about 2.8 million tons, accounting for 57.85% of the production of the country, which accounts for 33.33 fisheries exploitation. Growth rate of aquaculture production was about 9.25% per year (the country is around 8.35% per year). By 2009, seafood export turnover of Vietnam has hit $ 4.25 billion USD. As per the statistics, in proposed study area, in 2009, the fishery sector contributed 7,707.03 million VND.

Livestock & Poultry: Mekong River Delta is known for raising livestock and poultry. The type of livestock is cattle (including beef and dairy cattle) and poultry. Poultry development in the Mekong River Delta is mainly chickens and ducks. Number of ducks breed in this region account for 80% of ducks which are raised in the South and over 50% nationwide. As per the statistics, in proposed study area, in 2009, the livestock sector contributed 3,554.7 million VND.

Agricultural Outputs in Study Area (2009)

0.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

LONG AN TIỀN GIANG VĨNH LONG ĐỒNG THÁP CẦN THƠ

in m

illio

n VN

D

Cultivation Livestock Fishery


FFiigguurree 1144 AAggrriiccuullttuurree OOuuttppuuttss iinn SSttuuddyy AArreeaa ((22000099))

Inadequate Industrial Infrastructure

The low level of infrastructure is one of the major reasons for lower contribution by industrial sector and service sector in Mekong River Delta region. The Japanese External



Trade Organization’s (JETRO) annual executive opinion survey also identifies infrastructure as the top constraint for companies operating in Vietnam. Within a ten year period (1997-2007), uncertain policy was replaced by underdeveloped infrastructure as the most problematic factor affecting Vietnam’s investment environment. The problems as identified by JETRO and as listed below also holds true for the Study Area in Mekong River Delta region.

TTaabbllee 22 TToopp FFiivvee PPrroobblleemmss ooff IInnvveessttmmeenntt EEnnvviirroonnmmeenntt ((%% ooff MMuullttiippllee RReessppoonnsseess))

Manufacturing firm Underdeveloped infrastructure 69.2% Troublesome and complicated administrative procedures 50.0% Undeveloped economic legal system, and arbitrary legal management and application

46.2%

Uncertain and unclear policy management of local governments 38.5% Troublesome and complicated tax practices 23.1% Non-Manufacturing firm Underdeveloped infrastructure 76.9% Insufficient office space and rent increases 69.2% Undeveloped economic legal system, and arbitrary legal management and application

57.7%

Troublesome and complicated administrative procedures 46.2% Uncertain and unclear policy management of local governments 42.3%

Source: Japanese External Trade Organization (JETRO), 2007 Survey of Japanese-Affiliated Firms

in ASEAN and India.

Infrastructure Status:

Transport:

In the Mekong River Delta, roads and waterways are major modes of transport as there a dense network of rivers and canal. This network favors transportation among provinces in the region. Unlike rivers in the North of Vietnam, Southern rivers like Tien Giang, Hau Giang, Vam Co, Sai Gon that link with a score of canals are wide and deep. The waterway network is capable of transporting huge quantity of goods such as food, fertilizer, construction materials.

Coupled with the waterway network, the road network is quite comprehensive despite terrain restrictions. Roads link to almost all localities in the region including Lower Mekong River Delta (Dong Thap Province), Ca Mau peninsula. Roads are capable of



transporting passengers and goods such as fresh aquatic products, fruit, food, foodstuff and other necessities.

Other modes of transport such as railway (Ho Chi Minh City - My Tho - Can Tho Railway) are under planning and research. Now, some civil airlines linking to airports in Phu Quoc, Ca Mau, Can Tho and Rach Gia have come into operation.

Roads: The length of road traffic system in the Mekong River Delta is about 47,202.74 kilometers including 1,960.23 km of national highway, 3,720.57 km of provincial road, 8,402.45 km of district road, and 33,119.49 km of communal road.

Arterial route of the Mekong River Delta, the National Road 1A has basically been upgraded with a loan from the World Bank (WB). As expected, the bridge named Ganh Hao 2 had finished at the end of September 2010 while other six bridges in the distance from Dam Cung to Nam Can (Ca Mau) are under implementation.

A parallel route of the national highway 1A, cutting the Tien River, upstream of the Hau River is route N2 with 440 km long which connects the Southeast region to Mekong River Delta provinces. This route has now completed the passage of Duc Hoa - Thanh Hoa (Long An) while Vam Cong bridge and Cao Lanh bridge are under planning.

Numbers of projects are expected to be initiated between 2010 and 2020 to improve the road transport network in Mekong River Delta region. By 2020, the Mekong River Delta aims for a synchronous, uninterrupted and relatively complete infrastructure transport system.

As for the Expressway Network Development, the North-South Expressway (Eastern) was prioritized in the present expressway network development master plan (Decision No.1734/QD-TTg), and its detailed plan was approved by the Prime Minister in Decision No.140/QD-TTg dated on January 21, 2010. In the Mekong River Delta, the Trung Luong - My Thuan - Can Tho Expressway was planned to develop before 2015 by BOT scheme.

The Trung Luong - My Thuan - Can Tho Expressway has an important role to facilitate socio-economic development in the Mekong River Delta area as economic belt between the commercial capital of HCMC and Can Tho city.

Ports & Waterway: With a unique feature of rivers and canals, the Mekong River Delta has a potential in water transport. It has a coastline over 700 km, with a wide system of rivers and canals. The region’s freight transport needs are met by the inland waterways system and road system. The waterways system consists of 4,800 km of navigable waterways with 1600 km for the main corridors and carries approximately 70% of the fright volume in terms of ton-km. In terms of logistics, waterways carry the region’s



important but lower bulk value products such as rice, building materials, fertilizers etc. It is unfortunate that the investment in waterways in comparison to ports and highways has lagged behind and there are increasing constraints in the existing waterway network.

The Mekong River Delta has about 25 ports in different types. However, many of them needs up gradation and renovation. According to the Ministry of Transportation’s approved plan by Prime Minister in December 2009, “Vietnam Seaports Development Plan up to 2020 with the vision to 2030”, the focus area is to develop comprehensive national seaport system and to develop deep seaport in the North, Centre and South creating the attractive wide seagate for neighboring countries. The objective of this plan is to meet the industrialization and modernization; creating the engineering to quickly help the nation in integration and competing with other nations in the region and worldwide. With reference to Mekong river Delta seaport, the plan estimates the throuputs of about 54-74 million T/year, 132-256 million T/year and 206-300 million T/year by year 2015, 2020 and 2030 respectively.

As per the plan, the Can Tho port in Can Tho city is the national general port and regional gateway with the following functions:

Cai Cui terminal port is the core development area of Can Tho port that mainly for 10,000 – 20,000 DWT ships. There is exclusively used terminal for small scale services establishments along the river. This is one of the priority investment projects by 2015.

Hoan Dieu, Bin Thuy terminal port needs to be upgraded but not extended to accommodate the ships upto 10,000 DWT.

Tra Noc O Mon terminal port is most exclusively used port for service, industrial establishments (Such as cement, oil, thermoelectricity etc.) along the river. There are also general ports to support Hoang Dieu terminal and industrial zone. It can accommodate 5,000 – 10,000 DWT ships.

In Phu Quoc, there is An Thoi, Vinh Dam port for 2,000-3,000 DWT ships and Mui Dat Do port for 80,000-1000,000 GRT ships for international tourist.

As described in the above plan, the central ports of the Mekong River Delta region will be located in Can Tho and will provide common goods to sub-western region of the Hau River and sub-region between the Tien River and Hau River. However, it needs upgrading and expansion of ports specially, the Cai Cui port cluster which can able to handle the planned capacity by 2015. The rehabilitation work is in progress.

Airports: The region has 4 domestic airports: Rach Gia, Ca Mau, Can Tho and Phu Quoc. Can Tho airport and Duong To – Phu Quoc airport needs and planned for an upgradation



and expansion to meet the standards of international airports.

Energy: The Mekong River Delta has 03 power plants in operations and numbers of investment projects are planned in the region. Can Tho Thermal Power Plan have a total electricity production to nearly 1 million Kwh and the Ca Mau Power Plant 1 & 2 has total capacity of 1500 MW. As per master plan of O Mon Power Center, 04 power plants are under planning or construction stage with the total capacity of 2640 MW. Power plants are also planned in Hau Giang Soc Trang and Tra Vinh province. In addition, 2 coal power plants in Kien Giang 1 & 2 with a total capacity of 5200 MW are expected to be completed and put into operation before 2015.

Industrial Zones and Estates: According to a survey by Tokyo Mitsubishi Bank, there area 20 major industrial parks/zones around HCMC and Mekong River Delta area as shown in Table 3. Out of the 20 major Industrial Park (IP)/Industrial Zone (IZ) in and around HCMC, 10 are located in Dong Nai and Ba Ria - Vung Tau Provinces, where new developments are in progress. On the other hand, there are much fewer industrial zones in Mekong River Delta area as of 2006.

TTaabbllee 33 LLiisstt ooff MMaajjoorr IInndduussttrriiaall PPaarrkkss aarroouunndd HHCCMMCC aanndd MMeekkoonngg RRiivveerr DDeellttaa AArreeaa

Name of IP/Area/Province Distance from HCMC (km)

Total Area (ha)

Lease Hold Price

(USD/m2)

South East

Linh Trung III EPZ (19) Tay Ninh 44 203 27.5

Vietnam Singapore IP I (4) Binh Duong 17 500 45

Vietnam Singapore IP II - ditto - 32 152 28

My Phuoc IP - ditto - 42 1,200 17

Amata IP (7) Đong Nai 30 362 40

Long Binh Techno Park - ditto - 30 80 40

Bien Hoa I IP - ditto - 25 335 -

Bien Hoa II IP - ditto - 25 365 -

Long Thanh IP - ditto - 44 260 30

Nhon Trach III IP - ditto - 60 688 28 - 32

Phu My I IZ (13) Ba Rịa - Vung Tau

85 651 30

Dongxuyen IZ - ditto - 120 104 30

Cai Mep IZ - ditto - 70 449 35

My Xuan A IZ - ditto - 75 301 30

Saigon High Tech Park (1) HCMC 15 100 50

Tan Thuan EPZ - ditto - 5 195 108

Linh Trung I & II EPZ - ditto - 16 124 -



Mekong River Delta

Xuen A Industrial and Residential Park (20)

Long An 22 300 35 - 52

Tra Noc I & II IP (17) Can Thơ 170 225 22.5

Hung Phu 1&2 IP - Ditto - 170 35 - Note; EPZ = Export Processing Zone; IP = Industrial Park; IZ = Industrial Zone (Source: Tokyo Mitsubishi Bank, Area Report 114, 2006)

(3) Development policy of the national and local government

The National Policy is to establish the Mekong River Delta Economic Region encompassing the Can Tho City as the Center of the economics, logistics and human resources to anchor the Delta investment.

The Five-Year Socio-Economic Development Plan (SEDP) 2006-2010 (Five-Year Plan) of Ministry of Planning and Investment recognizes the issues for the development of Mekong River Delta region and states “the economic structural transformation in the Mekong River Delta contains a lot of shortcomings and there is no coordination between provinces in order to have common planning, the socio-economic infrastructure is weak; the industry, even the processing industry, has been slowly developed. The development of human resources and production of association with environmental protection is still limited”.

Considering the above identified issues, The Five-Year Plan, sets the overall goal for Mekong River Delta region and is “To mobilize the most possible resources to make full use of its strategic location and advantages, promote industrialization and modernization in agriculture and rural areas to establish a large-scale and specialized commodity-producing region; develop Mekong River Delta as a national focal economic zone with high, effective and sustainable growth rates; improve the socio-cultural conditions to be in line with the national average standards……….”.

The key targets of this plan are to accelerate GDP growth with a 20% increase in the total annual export output and provision of new jobs to 2.5-3.0 million people. In the sectoral structure in 2010 GDP, agriculture-forestry-fishery is to account for nearly 35.9-37.4%, industry-construction 20.5-20.6% and services over 42-43.5%. To realize these goals, the key sectors for development are agriculture, industry, services and tourism, infrastructure development and development of towns, cities and establish residential areas among others.

In the Industrial sector, the SEDP emphasizes to exploit gas reserves in Southwestern Sea to develop gas-electricity-fertilizer industry. Effectively develop industrial parks,



accelerate the construction of gas-electricity-fertilizer producing complex in Ca Mau. Strongly develop agricultural and fishery product processing industry. Continue to improve productivity and quality of plants for cement, concrete, bricks and tiles, building components. Develop agro- and fishery-machinery engineering industries. Improve the quality and quantity of artistic ceramics production for export.

The effective development of industrial parks is one of the key tasks mentioned for the development of industrial sector among others. The infrastructure development in Mekong River Delta region focuses on expansion and up gradation of national and provincial highways; continue investment for the up gradation and development of waterways, river ports, and sea ports (including Cai Cui port (Can Tho); restoration of railway routes; upgrading and expansion of airports (including Can Tho airport) and development of water supply, electricity supply and telecommunication services among others. The key sector “Develop towns, cities and establish residential areas” states ‘develop Can Tho city as an industrial, commercial, service, tourism, educational, cultural, economic, technical and scientific centre……..”.

On October 9, 2009, the Prime Minister Nguyen Tan Dung ratified a plan for Mekong River Delta to make the region as an agricultural hub and also aims to transform it into a cultural and tourist centre. With a vision towards 2050, a new plan will turn the Mekong River Delta region into a dynamically and sustainable developed economic region with favorable conditions for investment. The scheme aims to elevate the region’s profile and build on its potential and connect it with urban economic corridors, making Can Tho city the region’s nucleus.

Thus, to achieve the above stated national and regional goals, targets and key tasks for Mekong River Delta, it is vital to take concrete steps to improve the infrastructure conditions and industrial development in the Study Area and in Mekong River Delta.

4) Outline of the project

Phase 1: Formulation of Regional Industrial Development Plan

Phase 2: Identification of Priority Development Projects in consideration of regional industrial development strategy alongside the expressway

(5) Goal (long term objective)

To continually develop the Study Area and Mekong River Delta to be a major urban area



of the country and the major socio-economic and industrial center of southern Vietnam with the improved role and significant contribution by agro industries, seafood industries and service sector.

(6) General Objective

To develop the strategies and plans for regional development of the Study Area in Mekong River Delta.

(7) Prospective Beneficiaries

Beneficiaries of the Study shall be the residents of selected 4 provinces and 1 city in Mekong River Delta region and its vicinity.

(8) Project Priorities in the National Development Plan

The project is one of the top priorities of the nation.

(9) Plan/Public Investment Program

5. Desirable schedule time of the Commencement of the project

The Study will be completed within 18 months,

6. Expected Funding Source and/or Assistance (Including External Origin)

Only expecting the Japanese / JICA Development Study Program

7. Other Relative Project, if Any

None.



II. TERMS OF REFFERENCE OF THE PROPOSED STUDY

1. Necessity / Justification of the Study

According to Socio-economic Development Plan, regional development in the Mekong River Delta area is expected as potential area from now on, which is one of measures not only to reduce unemployment but also to accelerate the industrial activities by means of development both of hardware (transportation and logistics network and industrial parks) and software (industrial promotion, investment promotion and related human resources development).

As the economic belt between the commercial capital of HCMC and Can Tho city, the Trung Luong - My Thuan - Can Tho Expressway will have an important role to facilitate socio-economic development in the Mekong River Delta area.

However, regional development is not progressed so far and it is concerned negative impact due to the expressway that the traffic will bypass the provinces alongside expressway between HCMC and Can Tho City, which causes depopulation of provinces.

Therefore, it is recommended to formulate Regional Industrial Development Plan for multiple provinces alongside the expressway taking into consideration the advantage of regional characteristics and promote the regional industrial development integrated with the expressway project.

2. Necessity / Justification of the Japanese Technical Assistance

The Japan has a vast experience in the industrial development and development of the industrial parks. Considering the rich natural environment and geographical conditions in Mekong River Delta region, the Japan experience of industrialization in harmony with environment will be very vital for socio-economic growth of the selected study area as well as for the region.

3. Objective of the Study

The objectives of the Study are:

(1) To formulate a sustainable and integrated strategy for regional industrial development in the four provinces and one city alongside in consideration of the area’s potential in view of Trung Long, My Thuan and Can Tho Expressway in progress;

(2) To identify priority development projects for implementation which will pose a positive effects in materializing the above mentioned strategy, and facilitating and expediting the Trung Long, My Thuan - Can Tho Expressway project



4. Area to be covered by the Study

The study will focus on regional development, industrial promotion and related human resource development and will cover the following 4 provinces and 1 city as follows:

(i) Long An Province (ii) Tien Giang Province (iii) Dong Thap Province (iv) Vinh Long Province (v) Can Tho city

5. Scope of the Study

The Study shall be conducted in two phases as described below.

<Phase 1: Formulation of Regional Industrial Development Plan >

(1) Review of present socio-economic conditions in the Study Area

a) Review of socio-economic conditions (population, labor force, GDP, etc.)

b) Review of the policy environment and economic and/or industrial development plans in the Study Area/Mekong River Delta (investment environmental policy, industrial and high-tech industrial development policy and plans, etc.)

c) Review of current situation of industrial with a focus on agro-industries, aquiculture industries and others suitable industries in the Study Area/Mekong River Delta

d) Review of current situation of foreign investment and investment environment in the Study Area.

e) Review of current industrial promotion activities

f) Review of current human resources promotion activities

(2) Study and analysis of the needs related to industrial development

a) Study and analysis of the needs for industrial development

b) Study and analysis of the needs for technology promotion activities

c) Study and analysis of the needs for human resources promotion activities

(3) Policy and Strategy for industrial development

a) Study of policy and strategies for industrial promotion and development

b) Investment promotion policies and strategies



c) Review of existing transport network including the road network and highways, railway plans, sea ports and air ports, logistics facilities in the Study Area.

d) Review of industrial estates and parks in the Study Area along with labor force utilization, logistic needs, etc.

e) Study on related projects concerned with industrial development and logistics network improvement,

f) Survey on domestic and foreign (especially Japan, Korea, China, Hong Kong, and Taiwan, etc.) investment demand in the Study Area.

(4) Formulation of Master Plan for industrial promotion in the Study Area for the target year of 2030

a) Industrial development plan (identification of industrial categories to be promoted, study on how to promote industry)

b) Transport and logistics network improvement plan including the road network, highways, sea and air ports and logistics facilities

c) Human resource development plan

d) Investment promotion plan

e) Legal and administrative recommendation

<Phase 2: Identification of Priority Projects in consideration of Regional Industrial Development Strategy alongside the Expressway and Conduction of Pre-Feasibility Study

(1) Identification of Priority Projects in Regional Industrial Development Plan alongside the Expressway between Trung Long, My Thuan and Can Tho

a) Selection of the Industrial Categories and the Site in Regional Industrial Development Plan for the target year of 2020

b) Development policy and strategy on supporting transport and logistics infrastructure and facilities

c) Listing necessary supporting infrastructure and facilities for regional development

d) Formulation of Conceptual Plans for the Priority Projects



(2) Conduct of Pre-Feasibility Study on Priority Projects

a) Basic Design

b) Preliminary Cost Estimate

c) Economic and Financial Viability (preliminary level)

d) Social and environmental consideration

e) Development schedule

f) Study on implementation organization

(3) Recommendation on Institutional Measures

Recommendation on institutional measures to strengthen development administration of Provincial Government and promote private investments is carried out through following tasks.

a) To examine institutions related to development finance and administration and existing measures to promote private investment

b) To analyze function of the Central government and the Local Government in terms of financial and legislative aspects

c) To recommend measures for improving financial and administrative capabilities of local governments.

6. Work Schedule of the Study

The expected period for completion of the Study is within 18 months. The tentative work schedule is as shown below.

Work Phase and Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Phase 1: Formulaytion of Regional Industrial Development Plan

Phase 2: Identification of Priority Projects in consideration of Regional Industrial Development Strategy and Conduction of Pre-Feasibility Study

7 Expected Inputs of Expertise

The following expertise is tentatively expected to assign for the Study.

(1) Leader / Regional Development Planner,

(2) Spatial Planner,



(3) Industrial Park Development Planner,

(4) Infrastructure (Road and Transport) Planner,

(5) Infrastructure (Sea and Airport) Planner,

(6) Infrastructure (Water Supply, Drainage and Sewerage) Planner

(7) Infrastructure (Telecommunication and Electric Power) Planner,

(8) Socio- / Macro-economist,

(9) Industrial Survey Expert,

(10) Industrial Promotion Specialist,

(11) Investment Promotion / Demand Survey Expert,

(12) Institution and Administrative Expert,

(13) Legal Expert,

(14) Human Resource Development Expert, and

(15) Social and Environment Expert.

8 Expected Major Outputs

The following major outputs are expected.

(1) Regional Industrial Development Plan in the Selected Study Area in Mekong River Delta for the target year of 2030, and

(2) Pre-Feasibility Studies of the identified projects with a focus on Industrial Development and Logistics Network Improvement in the Study Area.

9 Request to Other Donor Agencies

None.

10. Other Relevant Information

None.



III. GOVERNMENTS UNDERTAKINGS

1. Facilities and Information

(1) Assignment of counterpart personnel from the Implementing agency

Necessary counterpart personnel will be assigned to the Study Team.

(2) Necessary data, information, documents, and maps etc. related to the Study

Necessary data, information, documents, and maps etc related to the Study can be prepared by the Government of the Socialist Republic of Vietnam (GOV).

(3) Information on security conditions in the Study area

The Study area is peaceful.

2. Undertakings of the Government of the Socialist Republic of Vietnam (GOV)

In order to facilitate the smooth and efficient conduct of the Study, GOV shall take the following measures:

(1) To provide security the safety to the Study Team;

(2) To permit the members of the Study Team to enter, leave and sojourn in the Socialist Republic of Vietnam in connection with their assignment therein, and exempt them from alien registration requirements and consular fees;

(3) To exempt the Study Team from taxes, duties and any other charges on equipment, machinery and other materials brought into and out of the Socialist Republic of Vietnam;

(4) To exempt the Study from income tax and charges of any kind imposed on or in connection with any emoluments or allowances paid to the members of the Study Team for their services in connection with the implementation of the Study;

(5) To provide necessary facilities to the Study Team for remittances as well as utilization of the funds introduced in the Socialist Republic of Vietnam from Japan in connection with the implementation of the Study;

(6) To secure permission or entry into private properties or restricted areas for the conduct of the Study;

(7) To secure permission for the Study to take all data, documents and necessary materials related to the Study out of the Socialist Republic of Vietnam to Japan;

(8) To provide medical services as needed. Its expenses will be chargeable to members of the Study Team.



3. GOV shall bear claims, if any arises against member(s) of the Japanese Study Team resulting from occurring in the course of or otherwise connected with the discharge of their duties in the implementation of the Study, except when such claims arise from gross negligence or willful misconduct on the part of the member(s) of the Study Team.

4. The Department of Planning and Finance, Ministry of Construction shall act as counterpart agency to the Japanese Study Team and also as coordinating body in relation with other governmental and non-governmental organizations concerned for the smooth implementation of the Study.

GOV assures that the matters referred in this form will be ensured for the smooth conduct of the Development Study by the Japanese Study Team.

Signed:

Date:

On behalf of the Government of the Socialist Republic of Vietnam

EExxeeccuuttiivvee SSuummmmaarryy ((JJaappaanneessee))

ベベトトナナムム南南北北高高速速道道路路

（（チチュュンンルルオオンン～～ミミトトワワンン～～カカンントトーー区区間間））

建建設設事事業業事事前前調調査査

和和文文要要約約

２２００１１１１年年３３月月

社社団団法法人人海海外外ココンンササルルテティィンンググ企企業業協協会会

日日本本工工営営株株式式会会社社

ベベトトナナムム南南北北高高速速道道路路（（チチュュンンルルオオンン～～ミミトトワワンン～～カカンントトーー区区間間））建建設設事事業業事事前前調調査査和和文文要要約約

和和文文要要約約--11

和和文文要要約約

SS--11 調調査査のの背背景景とと目目的的現在、ベトナム(ベ国)政府は、急速な経済成長に伴う交通需要の増大に対応するため、

高速道路網開発計画を策定し、整備事業を推進している。しかし、整備中の事業の財源は、

開発援助機関からの融資に依存しており、カウンターパート資金が同国財政を圧迫している。

ゆえに、ベ国政府は、今後整備予定の事業について、民間資金の活用に期待を寄せている。

一方、日本政府は、2010 年 6 月 18 日に｢新成長戦略｣を閣議決定した。同戦略では、

成長著しいアジアに着目し、更なる発展への貢献が日本の成長機会の拡大につながると捉え、

それに伴う需要と雇用の創出により、経済成長を成し遂げることを掲げている。具体的には、

｢パッケージ型インフラの海外展開｣を国家戦略事業に位置付け、日本の官民が一体となって、

アジアの官民連携(PPP)事業を推進するとしている。同方針の下、日本政府は実現に向けた

枠組みの構築及び本邦企業への支援を進めている。

南北高速道路(東側)は、現行高速道路網開発計画(Decision No.1734/QD-TTg)において、

優先整備路線に位置付けられている。2010 年 1 月 21 日に首相承認された同路線の詳細計画

(Decision No.140/QD-TTg)において、同路線上のチュンルオン～ミトワン～カントー区間は、

BOT スキームによって 2015 年までに整備する、優勢整備区間に位置付けられている。

上記を勘案して、海外コンサルティング企業協会(ECFA)は、ベトナム南北高速道路

(チュンルオン～ミトワン～カントー区間)建設事業事前調査の採択を決定し、同建設事業を

｢パッケージ型インフラの海外展開｣の候補事業として促進するための調査を実施した。現在、

同区間は、以下の 3 事業に分れており、第 2 ミトワン橋建設事業は経済産業省の調査を経て、

円借款事業(本邦技術活用条件)として促進中であるため、その他 2事業を調査対象とした。

チュンルオン～ミトワン高速道路建設事業 (ベトナム投資開発銀行高速道路会社(BEDC)による BOT 事業)

第 2 ミトワン橋建設事業 (経済産業省の調査を経て、円借款事業(本邦技術活用条件)として促進中)

ミトワン～カントー高速道路建設事業 (クーロン交通インフラ投資開発事業管理会社(Cuu Long CIPM)によるPPP事業)

SS--22 調調査査のの概概要要本調査は、主に以下の内容について、2010 年 12 月～2011 年 3 月の期間に実施した。

調査範囲は、上記 2 つの高速道路事業及びその沿線省を対象とした。

事業の背景及び現状の確認

PPP 事業スキームの予備検討

調査報告書の作成及び提出

SS--33 関関連連開開発発計計画画ベ国の最上位計画である社会経済開発計画(10 ヵ年戦略及び中期 5 ヵ年計画)などの

関連開発計画では、主要経済地域としてのポテンシャルの高さ及び地域格差是正の観点から、

調査対象事業が位置するメコンデルタ地域のインフラ整備及び産業振興を重要視している。

また、調査対象事業は、ベ国最大の商都ホーチミン市とメコンデルタ地域の中核都市となる

カントー市を結ぶ経済回廊として、同地域の社会経済発展を促進するために必要な重要事業

として位置付けられている。



SS--44 ミミトトワワンン～～カカンントトーー高高速速道道路路建建設設事事業業

((11)) ベベ国国交交通通運運輸輸省省（（MMOOTT））提提案案のの PPPPPP ススキキーームム

((aa)) CCuuuu LLoonngg CCIIPPMM のの設設立立 MOT は、ベ国南部地域における交通インフラ整備のニーズに対応するため、現在、

事業管理を担っているミトワン事業管理局(PMU My Thuan)を組織改編し、新たに開発投資

及び運営管理が可能なCuu Long CIPMの設立を計画している。同改編･設立に係る申請書は、

MOT から首相宛に提出済(Statement No.3183/BGTVT-TCCB)であり、2011 年第 1 四半期内に

承認される見通しである。

((bb)) MMOOTT 提提案案のの PPPPPP ススキキーームム上記申請書及び PMU My Thuan との面談から、MOT が提案中のミトワン～カントー

高速道路事業の PPP スキームについて、以下の内容を確認した。

Cuu Long CIPM が主体となり、同事業の特別目的会社(SPC)を設立する

同事業の財源については、以下の内容を計画している

- 政府負担: 30%(アジア開発銀行(ADB)の通常資本(OCR)ローン)

- Cuu Long CIPM: 30%(定款資本及び OCR ローンの転貸を原資とした投資)

- その他出融資者: 40%(未決)

((22)) PPPPPP ススキキーームムのの予予備備検検討討結結果果 MOT が提案中の PPP スキームについて予備検討を行い、以下の懸念事項を確認した。

ネットワークリスク: 先行区間であるチュンルオン～ミトワン高速道路建設事業

の見通しが不透明な状況であり、ADB がミトワン～カントー高速道路建設事業に

融資する上で懸念となっているセキュリティパッケージ: 事業の収益性が高くないため、買取条項や免税措置等、

政府支援及びインセンティブを得て、SPC の健全性を確保することが必須である収益性: F/S 報告書には、交通需要予測における通行料金設定、財務分析における

将来の拡幅工事費を考慮した検討が見受けられないこと、また回収期間が長い等、

収益性が不透明である政府保証: 官民リスク分担、民間のリスクを低減するために必要な政府支援策が

明確に定められていない

SS--55 チチュュンンルルオオンン～～ミミトトワワンン高高速速道道路路建建設設事事業業

((11)) 既既存存 BBOOTT ススキキーームムのの概概要要

((aa)) BBEEDDCC のの概概要要 BEDC は、2007 年 11 月 24 日、ベトナム投資開発銀行(BIDV)主導のもとに設立され、

チュンルオン～ミトワン～カントー高速道路建設事業に係る BOT 事業権を取得した。しかし、

2009 年 5 月、投資資金不足により、第 2 ミトワン橋及びミトワン～カントー区間の事業権を

PMU My Thuan に移管した(Announcement No.137/TB-VPCP, Decision No.1318/QD-BGTVT)。

一方、2009 年 9 月、BEDC はホーチミン～チュンルオン高速道路の運営事業権(25 年)

について首相承認(Letter No.1625/TTg-KTN)を取得し、取得費用として総額 10 兆ドンを 3 年

で決済する予定となっている。

ホーチミン市計画投資課が発行した事業登記証明(No.41030080500)により、BEDC は、

上記 2 事業の他、工業団地･都市開発における建設事業及びサービスの提供、不動産･電力の

売買等が認められている。



((bb)) 既既存存 BBOOTT ススキキーームムのの概概要要上述の通り、現在、BEDC は 2 つの高速道路事業を計画している。両事業を合わせた

総事業費は 28 兆 8880 億ドンに及び、その財源については、以下の内容を計画している。

BEDC: 10%(定款資本)

開発援助機関からのローン及び社債等: 90%(未決)

また、事業の採算性を補完するため、以下の権利の付与が首相により承認されている。

国道 1A 号線上ミトワン橋の通行料徴収権

ホーチミン～ミトワン区間の独占的沿線開発権、サービス事業及び広告事業権

チュンルオン～ミトワン高速道路建設事業に係る土地使用料の免除

国道 1A 号線ビンチャン～チュンルオン区間の通行料徴収権

((cc)) BBEEDDCC のの意意向向 BEDC との面談から、両事業に係る BEDC の意向について、以下の内容を確認した。

PPP スキームの検討、資金提供、高速道路の運営維持管理に係る研修について、

国際協力機構(JICA)からの支援を期待している

現在、政府保証付き、競争力のある金利、据置期間 3 年、最低返済期間 12 年の

条件で融資者を募っている

((22)) 既既存存 BBOOTT ススキキーームムのの懸懸念念事事項項既存 BOT スキームの予備検討を行い、以下の懸念事項を確認した。

出資比率が総事業費の 10%と低いため、民間企業が安心してインフラ事業に融資

するためには、少なくとも 30%程度まで引き上げる必要がある民間企業にとって、総事業費(28 兆 8880 億ドン)が巨額である 2 事業が混在しており、事業実施体制及びキャッシュフローが複雑となる交通需要予測における通行料金設定、財務分析における将来の拡幅工事費を考慮

した検討が見受けられないこと、また回収期間が長い等、収益性が不透明である

SS--66 提提言言本調査の結果を踏まえた提言は以下の通りである。

ミトワン～カントー高速道路建設事業については、Cuu Long CIPM の設立、及び

ADBのPPPスキーム適用可能性調査が計画されており、本調査結果を踏まえて、

予定通り ADB 調査を実施することを薦めるチュンルオン～ミトワン高速道路建設事業については、本邦企業と連携の上、

JICA の PPP-F/S に応募し、PPP スキームの適用可能性及び最適な PPP スキーム

の検討を実施することを薦める対象事業の沿線省は、地域開発が進んでおらず、開通後に交通が素通りする等、

負の影響が懸念される。従って、対象事業沿線省を対象とした地域産業開発計画

を策定し、高速道路事業と地域開発を一体的に進めることを薦める。これにより、

沿線省の開発が促進され、結果として交通量の増加につながり、事業の採算性も

高まることが期待できる。同計画の策定については、JICA 技術協力プログラム

への要請により支援を仰ぐことを薦める。

Preface - ECFAecfa.or.jp/japanese/act-pf_jka/H22/koei_mythuan22.pdf · Preface Engineering and...

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