Out-Law News | 13 Sep 2021 | 2:02 am | 1 min. read
Vietnam’s prime minister Pham Minh Chinh has approved the country’s road development plan for 2021-2030.
The plan aims to build over 5,000 kilometres (km) of expressways by 2030, up from 3,841km in 2021, according to a local report. A draft version of the plan listed 25 road construction projects which will be prioritised for investment in 2021-2025.
The plan allows for flexibility. Cities and provinces will be able to fast-track investment in essential new road projects or highway expansion, provided funds are available.
The plan includes 8,294km of road networks in total. Planned new expressways include 2,063km in the Eastern Cluster and 1,205km for the Western Cluster of the North-South Expressway. 14 new expressways are planned to be built in the north at a length of 2,305km; 10 totalling 1,431km in the central and central highlands regions; and 10 with a total length of 1,290km in the south of the country.
Vietnam also intends to build 172 national highway routes with a total length of 29,795km by 2030, compared to 5,474km in 2021. It also plans to build 3,034km coastal roads going across 28 cities and provinces.
Vietnam’s Ministry of Transport (MoT) has been drafting the plan since June. In August, MoT signed a build-operate-transfer (BOT) contract for the third section of the north-south expressway under a public-private partnership (PPP) model.
Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “It is encouraging that the much needed programme of road developments is moving forward. With the new PPP law and regulations in place, Vietnam would be seeking to bring private debt and equity to undertake these projects”.
“There are concerns over the risk allocation as prescribed in the PPP, such as around government support and termination payments, and the most effective way to test the market is to bring the deals to market. As we have seen in other regional markets such as the Philippines, it may be necessary to have several attempts before there is a matchup of project opportunity and capital providers,” he said.