New mega highway ring in Ho Chi Minh City: costs and opportunities revealed!

New mega highway ring in Ho Chi Minh City: costs and opportunities revealed!

A major infrastructure project has been launched in Ho Chi Minh City that is intended to significantly improve the local transport infrastructure. When the report was presented by Deputy Construction Minister Pham Minh Ha, the “Dona Van Dai 4” project was introduced to the city. This project starts from the Toc Tien – Chau Pha intersection and extends to the north-south axis in Hiep Phuoc port area in Nha Be District. The project is divided into two groups, each comprising ten sub-projects.

The total preliminary investment for the first phase of the project is around VND120,400 billion. Of this, almost VND 70,000 billion comes from the state budget capital, with approximately VND 29,700 billion coming from the central budget and the rest from the local budget. The investor has already mobilized over VND 50,600 billion. The project is planned to be implemented between 2025 and 2029, with the aim of completing the project by the end of 2028.

Financing mechanisms and challenges

The investment method is based on public investment for the sub-projects, which includes compensation, support, resettlement and the construction of secondary and parallel roads. The sub-projects intended for the construction of the motorway section use the Public-Private Partnership (PPP) method, applying a BOT (Build-Operate-Transfer) type contract model. The government has proposed seven specific mechanisms and policies, including engaging contractors for advisory and non-advisory services and compensation packages for resettlement areas.

Nevertheless, concerns have been raised about the viability of PPP investments and raising capital. Ta Van Ha, deputy chairman of the Committee for Culture and Society, called for clarity about the advantages and prospects of success of this form of investment. Economic and Finance Committee member Nguyen Thanh Trung raised questions about alternative sources of capital if money cannot be mobilized under PPP. However, representatives of the Ministry of Construction reported proactive preparations and interest from some investors in the project.

Expanded infrastructure projects in Ho Chi Minh City

In addition to the Dona Van Dai 4 project, the city of Ho Chi Minh is also pursuing extensive infrastructure development through public-private partnerships (PPPs). A recently approved list includes 41 PPP projects that aim to use private expertise and financing to improve services in areas such as health, education and culture without straining the state budget. These initiatives are supported by Resolution 98, which gives the city significant authority to design and implement PPP projects.

The individual project investments range between 41 million and 290 million US dollars. These include, among other things, the construction of the Thu Duc Regional General Hospital to improve health care and the expansion of the District 2 Hospital. In the education sector, several new schools are to be built in peripheral areas to increase access to education.

Investments are also being made in the area of ​​sports and culture, for example in the construction of the Rach Chiec Sports Complex and the revitalization of the Saigon Water Puppet Theater. The PPP model is seen as crucial to attract investment and expertise for these projects, which aim to accelerate the city's modern infrastructure development and improve the quality of life of residents.

With these comprehensive developments, Ho Chi Minh City plans to actively address the challenges of urban infrastructure and create long-term solutions that promote both the environment and the quality of life of the population.

Further information about the projects can be found here: Vietnam.vn and Conventuslaw.com.