panorama of infrastructure

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panorama of infrastructure

• Open Dialogue with
• Ministry of Planning and Investment

presented by Dang Le Hoang, official of
Infrastructure and Urban department, MPI
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Contents

• overview of infrastructure, archivements
• challenges and opputunities
• PPP legal framework
• list of calling for projects
• investment procedure for projects

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1. Overview of Vietnams infrastructure
Mode of transportation

• Highway
• Railway
• Marine
• Aviation
• Waterway

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Highway network system
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Railway network system

• Total of length more than 2.600 km, not to be
  electrified
• 1.000mm size of rail
• Interchanges are mostly operated by hand
• Actual operation velocity ranges 50 to 80 km/h
• 346 locomotives, 75 among them more than 15
  years of operation

Comments

• Old-fashioned
• Single rail
• Lots of crossroads and bottle-neck
• High risk of breaking down due to disaster
• Urban railway system not to be constructed

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Marine network system

• 114 ports and wharves, international seaports are
  Cai Mep Thi Vai (south), Lach Huyen (north),
  Van Phong (middle).
• Ships and vessels 360 for offshore vessels and
  505 inshore ships
• 400 maritime transport company, among them 1/3
  is foreign company.

Comments

• Maritime transport is limited because there are
  not any deep-water ports.
• Lack of equipment for loading and unloading
• Lack of competition between companies

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Aviation network system

• 21 airports, including 18 for local and 3 for
  international service (Long Thanh international
  airport is under planning)
• Discharge is higher and higher. The Gov planned
  for widening and upgrading
• 5 airline companies Vietnam airline, Pacific
  airline, Jetstar, Vietjet and Air Speed up
  airline.
• More than 40 planes
• 1 Aviation research institute

Comments

• Need to open international network
• Security and safety in aviation
• Resources of human
• Development of plane team
• Lack of legal framework for socialization
  investment

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Waterway network system

• North waterway system has 2.700 km, minimum wide
  30-36m, deep 1.5-3.6m
• South waterway system has 3.000 km, minimum wide
  30-100m, deep 2.4-4.0m
• Middle waterway system has 800 km, limited
• 7.200 ports and river watering places.
• 90.000 ships aver 70ton
• 700.000 ships aver 1-10 ton
• Mainly for coal, ore, cement, material,
  fertilizer, consumer goods.

Comments

• Need to open international network
• Security and safety in aviation
• Resources of human
• Development of plane team
• Lack of legal framework for socialization
  investment

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Telecom network system

• The number telephone per 100 citizens is 75,42
• Internet subcribe gains 6,03 million, up to now
  there are 20,16 million people who use internet
  (approximately 23,7 population of Vietnam)
• 100 equiped telephone for commune
• 19.200 postal service places that averages
  2,35km/place
• Mobile phone is strongly developed with the
  expansion of Viettel

Comments

• Delay equitization state-owned telecom enterprise
• cost/minute is still high
• Lack of hi-tech

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Urban infrastructure

• Area for an urban citizen is 13,3 m2
• Fresh water supply gains 84
• Solid waste collected is 79 in urban area
• Private sector pays attention for urban water
  supply
• More real estate project for neighbouring big
  city such as Ha Noi, HCM city...

Comments

• Real estate market is still at a start, price
  remains fluctuated
• Urban management has been inadequate
• Privte sector takes soundings

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Review of energy industry

• Electric area upto Mar, 31, 2008, for district
  100 commune 97,15 household 93,6 have the
  national electric network
• Coal, mine ores and metallurgy Vinacomin has
  underconstructing allumin project in Lam Dong,
  Daknong and has invectment license in Lao,
  Cambodia. It also makes the coorperation with
  foreign investors such as Alcoa (US), BHP
  Billiton (Aus), China...
• Oil and gas Keeping construction essential
  petrolchemical project like Dung Quat, Nghi Son,
  Can Tho, Vung Ro, Long Son

Comments

• Huge demand of capital
• Some electric project with delay
• Lack of hi-tech
• Lack of skillful labors

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Renewable energy

• Small hydropower
• Biomass energy
• Biogas
• Solar energy
• Wind energy
• Geothermal energy
• Biofuels
• Tidal wave energy
• Exploitation and use of waste

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2. Challenges for infrastructure

• Shortage of sustainable finance
• Limitation of taking full advantage of available
  infrastructure
• Non-comprehension between urban planning and
  infrastructure development
• Unbalance in assignation between areas of
  infrastructure
• Uncontrolled increases of personal vehicles
• Trouble in encourage private sector for taking
  part
• Incomplete institution

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3. PPP legal framework the decree 78/2007/ND-CP
issued by the Government
Areas can be applied - Highway, tunnel and
involving facilities - Railway, tram - Airport,
seaport, river watering place, ferry - Water
supply works, drainage, sewage disposal, waste
disposal - Electric power, electric network -
Others due to decision of the Prime Minister
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Major features of the 78 decree

• No difference between foreign investor and
  domestic investor
• 2 ways of subsidy
• State-owned enterprises make a financial
  contribution to the established company with the
  rate not exceed 49
• State funds clearance site or contruction
  auxiliary works
• Fix the minimum ratio of debt/equity in the
  project
• Establishment and sounding market the list of
  calling for projects
• More power is devolved to the regional government
• More concessionary tariffs

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4. List of calling for projects
1. 1290/QÐ-TTg issued 26th, Sep 2007 on the list
of calling foreign investment for period of the
year 2006 to the year 2010
2. 412/QÐ-TTg issued 11th, Apr 2007 on the list
of investment imprortant transportation,
essential infrastructure to the year 2020
3. 2667/QÐ-BGTVT issued 30th, Aug 2007 on the
list of calling project investment in the way of
BOT, BT, BTO for transportation area
4. List of calling for investment projects of
provinces
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5. Process for investing a project

• make preparation a project
• Architecture competitive examination
• Competitive selection for consultancy (3 steps, 2
  steps or 1 step)
• Appraisal and approve the project
• construction
• Pre-construction bidding plan, bidding detail
  design, construction license, bidding contractor
  and supervision consultancy, ensurance
• Underconstruction construction and erection
• Project management quanlity, progress, volume,
  safety, environment, cost, contract.
• finish and transfer
• Check and take over
• Balance and audit
• Warranty

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The sketchy process for PPP project
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• Project proposal and feasibility study can be
  prepared in 2 ways
• Authority agency makes a preparation (in the list
  issued)
• The investor makes a preparation (not in the
  list)
• These must be appraised and approved by the
  Authority agency
• The content of a project proposal is detailed at
  the Article 9 of 78/2007/ND-CP decree

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• Investor selection can be done in 2 methods
• Competitive bidding (local or international
  bidding)
• Nominate the investor
• Authority agency is responsible for selection the
  investor
• MPI makes the regulations for selection investor

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• Authority agency presides over the contract
• Main contract
• Involving contract
• Main contract detailed at the article 15
• Disscusion about subsidy, warranty, operation
  period
• For the foreign investor, it can be applied
  international law if only the law is not against
  the available concerning Vietnamese laws
• The contract is initial, not official

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• MPI issues the investment license
• For any project (now)
• For some projects that determined (being
  reformed)
• MPI make an examination and verification the
  process before issuing the investmnet license
• Content of an investment license
• Name and address of the investor
• Number and dating of the business centificate
• Purpose and location of the project
• Cost or total capital, subsidy
• Concessionary tariffs and Government warranty

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Some PPP remarkable projects

• 1. Expressway Quang Tri Hue Da Nang
• Total length 178 km
• Cross-section 4 lanes
• Estimated cost 750 millions USD
• More information
• Contact Ministry of transportation, planning and
  investment Department
• Acorrding to precast in the strategy of
  transportation Volume for section from Quang Tri
  to Hue is more than 10.000 PCU/daynight. Volume
  for Hue Da Nang is more than 20.000
  PCU/daynight (by the end the year 2010)
• Recommedation the section Hue to Da Nang is more
  attractive
• it can be done with BOT method
• Milestone of toll charge fee can be started at
  90/TT/BTC circular on highway toll for Vietnam

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Some PPP remarkable projects

• 2. Vinh Thinh bridge and linking-road to 2C
  national highway
• Total length 3,38 km
• Cross-section 24 meters
• Estimated cost 59 millions USD
• Place Ha Noi, Vinh Phuc
• More information
• Contact Ministry of transportation, planning and
  investment Department
• it can be done with BOT, BT combination with land
  method
• Milestone of toll charge fee can be started at
  90/TT/BTC circular on highway toll for Vietnam

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Some PPP remarkable projects

• 3. Urban railway from Ha Noi to Noi Bai airport
• Total length 27 km
• Type Light railway system
• 2 lanes
• Estimated cost 370 millions USD
• Place Ha Noi
• More information
• Contact Ministry of transportation, planning and
  investment Department
• it can be done with BOT method

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Some PPP remarkable projects

• 4. Nghi Son seaport
• Capacity 1,2 2,0 millions ton/year, more than
  10.000 DWT and container ships service
• Estimated cost 100 millions USD
• Place Thanh Hoa
• More information
• Contact Ministry of transportation, planning and
  investment Department
• it can be done with foreign direct investmetn
  method or business contract with joint-venture
  company.
• Petrolchemical plant is underconstruction
• Open economic zone Nghi Son is attractive
  investors

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Some PPP remarkable projects

• 5. Tham Luong Ben Cat Nuoc Len canal
  improvement
• Embankment 2 sides of the canal with total length
  of 60 km
• Construction roads system and parks longitudinal
  the canal
• Tidal control culvert
• Improve canal level 2 and level 3
• Total cost 400 millions USD
• Place district 12, Ho Chi Minh city
• More information
• Contact Ho Chi Minh community.
• it can be done with BT combination land along the
  canal
• It is good for developing the real estate projects

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Thank you for your attending

• Infrastructure and urban department Ministry of
  Planning and Investment 02 Hoang Van Thu, Ba
  Dinh District, Ha Noi, Vietnam
• e-mail address
• danglehoangf_at_yahoo.com
• danglehoang_at_mpi.gov.vn