Bitexco will be the first project developer and the second will be selected through international competitive bidding. Two developers will set up joint-venture to implement the project in accordance with PPP model approved by the Vietnamese government. It was rolled out after the Ministry of Transport (MoT) submitted the second trial management structure draft and deployment plan to the Vietnamese government for the Dau Giay-Phan Thiet highway project in the south last month.

The government and investors will simultaneously have to mobilise capital for this important infrastructure project.

Specifically, besides investment incentives which developers will enjoy in accordance with Decision 71/2010/QD-TTg, the Vietnamese government will secure long-term loans for the first developer from the World Bank’s International Bank for Reconstruction and Development (IBRD).

The government also approved the use of state funds to pay for site clearance, compensation and resettlement.

Equity capital of developers must be higher than 20 per cent of construction expense. Bitexco’s capital contribution ratio is 60 per cent and 40 per cent for the second investor.

The project’s total investment has been scaled up to VND23.2 trillion ($1.12 billion) for two phases of development. The project includes a main highway of 98.7km crossing the southern provinces of Dong Nai and Binh Thuan and a 2.58km access road. The first phase of construction calls for two lanes each way, with a later expansion to three lanes each way.

The new highway is expected to shorten travel from Ho Chi Minh City to the south-central region and significantly ameliorate traffic conditions on National Highway 1, as well as encourage development of industrial zones along the route and ecological seaside resorts in central Binh Thuan, Ninh Thuan and Khanh Hoa provinces.