On February 5, 2022, Prime Minister Pham Minh Chinh and the Government’s delegation visited and checked the implementation of Cam Lam – Vinh Hao expressway project led by Deo Ca Group. Up to this point, this is the only project in the three component projects of the East North-South Expressway project implemented in the form of PPP that has mobilized enough capital for implementation.
Prime Minister Pham Minh Chinh visits and encourages engineers, workers and workers at Cam Lam – Vinh Hao project
After directly visiting the project site and listening to the report of the Executive Board, Prime Minister Pham Minh Chinh appreciated the investor for taking the initiative in the preparation work to soon deploy the project nearly 80km in the form of public – private – parnership. The Prime Minister said: “The project has solved the problem of diversifying capital sources. The project investor has raised capital on the stock exchange, issued corporate bonds, signed credit contracts, signed business cooperation contracts. Thus, there are 4 ways to raise capital. Investors must mobilize these 4 forms of capital mobilization. The two other PPP projects have not yet had credit and have not diversified this, so now the investors are facing difficulties. Through this, we learned the lesson to diversify sources of capital so that we have legal capital for us to do”.
Mr. Nguyen Tan Dong reported the progress of the project
Cam Lam – Vinh Hao Expressway has a total investment of 8,925 billion VND, with a length of 78.5km passing through 3 provinces of Khanh Hoa, Ninh Thuan and Binh Thuan. The project is one of three component projects of the North – South Expressway Project in the East is invested in the form of PPP. Especially in this project, there is Nui Vung tunnel item with a length of 2.2km, 3 lanes and the tunnel width of 14m. Once completed, this will be the fourth largest road tunnel in the country after Hai Van tunnel, Deo Ca tunnel and Cu Mong tunnel.
With experience learned from typical projects such as Bac Giang – Lang Son, Trung Luong – My Thuan, Van Don – Mong Cai expressways… and the opinion of “sign to perform, not just sign perfunctorily”, Deo Ca Group, the representative of the joint venture, conducted negotiations to point out the shortcomings in the bidding documents. At the same time, work with Tien Phong Bank (TPBank), bond investors and contractors to ensure the PPP capital structure.
4 months after signing the BOT contract, on December 7, 2021, the investor and the project enterprise have completed the capital arrangement when they signed a credit contract with TPBank with the committed capital to settle the project. The budget for the project is 1,700 billion VND, meeting all conditions to carry out the construction of the project.
In this project, the investor consortium has applied an innovative 3P capital structure model:
First P: State budget capital.
Second P: Equity accumulated from experience, depreciation, optimization of production.
And especially the third letter P: other sources of capital mobilized by investors in many forms such as credit loans, bond issuance, stock market, investment cooperation contract (BCC).
This method is considered by experts to be a model of capital mobilization in the future and follows the direction of countries around the world that have been successful in PPP investment such as Korea, Japan…
The investor has also proposed a plan to reduce the cost by nearly 10%, equivalent to 891 billion VND by optimizing construction organization such as: Producing materials from tunneling rock sources, making use of machinery, relocation of construction machinery from completed projects such as Love Bridge, Bao Bien Tunnel, Trung Luong – My Thuan Expressway. In addition, in order to reduce disease risks but increase labor productivity with the motto of 3 works through “Through epidemic, through Tet and through the night”.
Prime Minister gives gifts to engineers and workers on the construction site of the Cam Lam – Vinh Hao expressway project
Besides, by actively using their own capital for construction during PPP contract negotiation (accepting the risk of losing money when the contract is not signed), the investor commits to shorten the construction time 2 months earlier than the contract signed with the Ministry of Transport.
Regarding capital disbursement, Deo Ca Group, with the advantage of capitalization on the stock market of more than 5,000 billion VND through the HHV stock has disbursed to the project more than 722 billion VND, 140% ahead of schedule as stipulated in the project contract. Total other mobilized capital disbursed for the project is about 210 billion VND, of which: TPBank has disbursed nearly 22 billion VND and other partners have disbursed more than 187 billion VND through business cooperation contracts.
The project management board also gathered more than 1,000 workers, engineers, and hundreds of machinery and equipment… on Cam Lam – Vinh Hao Project to simultaneously deploy the construction of roads and bridges and tunnel.