National Highway 1A, linking HCM City and Mekong Delta provinces, has been upgraded recently but it can’t satisfy increasing travel capacity. At the same time as the upgrade of this highway, the government, thus, has permitted the transport sector to build the first expressway from HCM City to Trung Luong using state capital.

As the construction pace is slow, both managers and contractors are suffering. Meanwhile, the price of construction materials is escalating. The cost for 1km of expressway is around US$4-5 million at present.

According to experts, from now to 2020 Vietnam will build around 3,000km of expressways and the remaining ways will be constructed in the following years. This is a long-term plan which requires various capital sources. Yet, in the next five years, state capital will be the major source, and will play the role of “bait” to attract capital from other sectors.

The government has established the Vietnam Expressway Development Investment Company (VEC), a special company which is in charge of building, maintaining, controlling and developing expressway projects, replacing the previous Project Management Unit (PMU) model.

Tran Xuan Sanh, VEC’s General Director, said the company is the investor of many expressway projects, including two large ones: the 55km HCM City-Long Thanh, Dau Giay, which will be kicked off in the fourth quarter this year, and the 245km Hanoi-Lao Cai expressway, which will debut in the third quarter. Neither of them will use state budget money, but will borrow on the government’s ODA loans at commercial interest rates.

Sanh said in the two above projects, the government allowed related localities to begin site clearance in the third quarter of 2007. This is a breakthrough which will help speed up construction pace.