New capital mobilization mechanism for Hanoi urban infrastructure

Hanoi has been given permission to speed up process of mobilizing capital and selecting contractors for urban infrastructure development projects in form of public-private partnership (PPP), per the Deputy Prime Minister Trinh Dinh Dung`s request.

The move is aimed to solve Hanoi’s traffic congestion and environmental issues through the acceleration of 24 urban infrastructure projects with total investment of VND136 trillion (US$6 billion), the Government Office announced Dung’s conclusion.

Following the instruction, Hanoi is authorized to develop its own plan of choosing contractors under special conditions stipulated in the Bidding Law for each specific project, which will be later reviewed by the Ministry of Planning & Investment (MPI).

Dung requested the MPI to cooperate with related agencies in reviewing Hanoi’s proposal within 10 working days since the submission day.

Consequently, the process of selecting contractors for PPP  transport – urban infrastructure projects in Hanoi will be reduced by 45 – 100 days.

In normal case, the process of selecting, negotiating and awarding contract for contractor of PPP project may be up to 700 days, informed the Hanoi People’s Committee.

With regard to Hanoi’s proposal on having permission of signing contract for category A project under the build – transfer (BT) form, Dung instructed the city to comply with the law.

Last July, Hanoi’s Chairman Nguyen Duc Chung proposed to the Prime Minister of implementing 20 infrastructure development projects under special condition.

These projects include: building bridge and road in Ring road No.4 (Me So bridge, Hong Ha bridge, section from Hanoi – Lao Cai highway to national highway No.32, and section from national highway No.32 to Phap Van – Cau Gie highway); Duong No. 2 bridge; Giang Bien bridge and the access road; upgrading national highway No.6 from Ba La to Xuan Mai; center road in Dong Anh district; Hong’s river banks improvement; upgrading national highway No.21 secton Son Tay – Hoa Lac – Xuan Mai;

Total investment of 20 projects under BT and BOT (build – operate – transfer) is VND128 trillion (US$5.6 billion).

Another 4 environment projects under BT and BOO (build – own – operate) projects are also expected to be implemented soon with total investment of VND8.6 trillion (US$379.2 million).

With regard to selection critaria, according to the Hanoi People’s Committee, in addition to financial and administrative capabilities, investors have to provide advanced payment for site clearance and carrying out the project once Hanoi People’s Committee hand over the land ownership rights.

Moreover, contractors have to commit on paying in advance expenses for pre-feasibility, feasibility and setting up technical specifications for approval.