in Developing Countries in FY2010 Study on Ring Road No.4 Project (Trung Gia - Phung Section) in the Socialist Republic of Vietnam SUMMARY March 2011

Transcription

1 Study on Private-Initiative Infrastructure Projects in Developing Countries in FY2010 Study on Ring Road No.4 Project (Trung Gia - Phung Section) in the Socialist Republic of Vietnam SUMMARY March 2011 第 1 章 第 2 章 The Ministry of Economy, Trade and Industry Prepared by: Ernst & Young ShinNihon LLC Japan External Trade Organization (JETRO) Nippon Engineering Consultants Co., Ltd. Central Nippon Expressway Company Limited Nippon Steel Topy Bridge Co., Ltd. shimizu corporation

2 (1) Background and Necessity 1) Project Background The Vietnamese government is developing the Ring Road (routes 1~3) with the aims of facilitating the passage of traffic through the Hanoi capital region, alleviating congestion within the city, and improving access from Hanoi to Noi Bai International Airport and the port and industrial parks etc. in Hai Phong. It also plans to add a new Ring Road 4 (six lanes) outside route 3 to handle the rapid expansion of Hanoi. The Hanoi Ring Road 4 project was included in the Master Plan written by the Ministry of Transport (MOT). The plan was approved by the prime minister in Within that project, the current survey covers the western portion (37km from Trung Gia to Phung) within the whole length of Ring Road 4, which the Vietnamese government plans to give the highest development priority. That section includes a long-span bridge of 5km which crosses the Red River, and the challenge is to redeem the funds required for the development of the section, including the bridge, funding procurement, formulation of the open management plan, and the related construction, operation and management. 2) Project Necessity The aims for building the Ring Road are 1) to facilitate the flow of traffic passing through the Hanoi capital region and relieve traffic congestion inside Hanoi, and 2) to improve access to central Hanoi, Noi Bai International Airport, Hai Phong port and surrounding industrial parks. When the whole of Hanoi Ring Road 4 is complete, it will have the following effects: 1) Facilitate transport between cities in the north of Vietnam, and 2) relieve traffic congestion in Hanoi. In the period before completion, it can be expected to create jobs for road construction along its 136km length. Before completion of the entire route, the completion of a 37km section from Trung Gia to Phung will improve logistics and will provide the following effects: 1) Promotion of the redevelopment to the north area of the Hong River (Thang Long districts), and 2) Relaxation of the traffic jam of the Hanoi city as the Outer Ring Road. Once Ring Road 4 is complete, it can also be expected to improve the environment in the city, by reducing noise and atmospheric pollution. (2) Considerations Necessary for Deciding on Project Details 1) Project Plan A project plan will be developed based on information gathered from various sources (including pre-feasibility study materials obtained in advance, yearbooks covering Vietnam and the project area which describe local socioeconomic conditions, data on current transportation and traffic conditions,

3 future development plans, and regional master plans) as well as the results of interviews with officials from local government agencies and other organizations. 2) Traffic Demand Forecasts The final feasibility study for Ring Road No. 4 is currently being deliberated by the Vietnamese government. In order to forecast future traffic volumes, it is necessary to confirm details of these materials, but in this survey, future traffic demand will be analyzed referring to the results of estimation in the feasibility study. 3) Road Plans The project team investigated control points such as geographical features, settlements, large-scale facilities, buildings, and cemeteries which affect the horizontal alignment of the planned road. In accordance with road structure standards in Vietnam, it also examined the appropriateness of the horizontal and vertical alignment of the planned route as well as the cross-sectional structure of the road. Furthermore, the team considered countermeasures against soft ground because areas with soft ground are distributed along the section of the road between the point where it crosses the Hanoi-Laocai Expressway and its terminal where it meets National Road No ) Bridge Planning A number of options for the long-span Red River Bridge are studied in the feasibility study report compiled by MOT. The project team analyzed the geological conditions in the vicinity of the area where the bridge will be built and the results of hydrologic surveys for the river, a major feature that crosses the road, referring to the results of the preliminary feasibility study carried out by TEDI, a transport consultant firm under MOT s control, those of design of the Nhat Tan Bridge, which is being constructed on the downstream side of the Red River Bridge, and other materials. The project team considered methods to improve several options that will be proposed in a preliminary feasibility study by balancing in the main stream between the minimum span, which is determined by the route width, and the number of sub and basic structures, which will be built on the water, and analyzing the range that allows land construction during the dry season. 5) Cost Estimation Quantities are based on those that are newly designed for this project. In estimating costs, the project team took into account recent sharp rises in the costs of raw materials, regional differences in labor costs, and consumer price indexation referring to the past contract prices in Vietnam. 6) Studies of Environmental and Social Aspects The project team reviewed the interim report on initial environmental examinations (IEE) it had obtained in advance. The information included in IEE was only basic, but the team tried to obtain supplementary information by interviewing environmental consultants who had been engaged in the

4 compilation of the report. In addition, it confirmed through on-the-spot investigations the present condition of the site where the road is planned and interviewed local residents. Based on the foregoing, the project team forecast and examined the environmental impact that the project is expected to have on the local community. Furthermore, it obtained information on and analyzed environment-related laws and regulations. (3) Project Outline 1) Outline and Project Cost 1)-1 Route and Road Plan Hanoi Ring Road No.4 goes along Hanoi City and the neighboring provinces of Hung Yen, Bac Ninh, the Bac Giang, and it is an outer belt line of about 136km length to cross three river portions of Hong River and the branch on three long span bridges. As for the road type, Expressway type with 6 lanes in the south section of NH.18 and Highway type with 4 lanes in the north section of NH.18 are planned. The study section starting at Trung Gia in Soc Son district of Hanoi City (intersecting with Hanoi-Thai Nguyen expressway), passing between small hills of south-west area, going southward along provincial road No.35, intersecting with Hanoi-Lao Cai expressway and NH.2, cutting Yen Vien-Lao Cai railway by Hong Ha bridge, reaches the intersection with NH.32. Total length of the study section is about 37 km. Route outline of the study section is shown in Fig. 1. The topography of the route has few ups and downs in both highway and expressway sections. In addition, countryside is most through the whole. The plan route satisfies horizontal and vertical alignment conditions throughout the whole.

5 Figure 1 Route Outline [ KM ] [ Distance (km) ] Hanoi-Thai Nguyen Expressway Trung Gia Hanoi-Thai Nguyen Railway National Highway No Highway (4 lanes) Hanoi - Lao Cai Expressway (16.67) 0.0 National Highway No.2 Phuc Yen Yen Vien - Lao Cai Railway Bu Tri National Highway No.23 Hong Ha Bridge North End Noi Dong Expressway (6 lanes) 25.0 Hong River Hong Ha Bridge South End Natioal Highway No.32 Phung

6 1)-2 Road Grade and Transverse Sectional Composition a. Road Grade The road grade for Ring Road 4 will be expressway to the south of National Route 18, and highway to the north of it. a-1 Km ~Km (-1+451) - North side of National Route 18 - Road type: Highway - Road grade: Grade II for the delta, design speed 100km - No. of lanes: Four lanes Figure 2 Road transverse sectional composition (Expressway, Urban zone) a-2 Km-1+451~Km South side of National Route 18 - Road type: Expressway - Road grade: Grade 100, design speed 100km - No. of lanes: Six lanes Figure 3 Road Transverse Sectional Composition (Highway, Non urban zone)

7 1)-3 Future Traffic Forecast In the region where the Project is planed, traffic volume is expected to increase with economic development. In Preliminary F/S, forecast for future traffic demand was performed, using value of elasticity in relation with GDP and domestic transport. Future traffic forecast is examined in this section based on the result shown in Preliminary F/S. Table 1 Future traffic forecast Unit:PCU Section NH3 NH2 9,716 15,931 25,093 34,121 45,131 NH2 - NH32 13,169 22,458 33,076 45,624 60,896 Table 2 Future traffic forecast (by type of vehicle) Unit:PCU Section Vehicle Car 851 1,508 2,524 3,565 4,907 Small Bus 566 1,003 1,678 2,370 3,217 Big Bus ,353 1,912 2,594 Light truck 2,226 3,876 6,380 9,011 12,127 NH3-NH2 Medium truck 2,779 4,841 7,968 11,254 15,060 3 axle truck 794 1,384 2,277 3,217 4,305 Truck > 3 axle ,278 1,710 Other Motorbike 1,688 1,892 1,892 1, Total 9,716 15,931 25,093 34,121 45,131 Car 1,134 2,010 3,058 4,320 5,946 Small Bus 2,121 3,760 5,722 8,082 10,969 Big Bus 2,251 3,990 6,071 8,575 11,639 Light truck 1,232 2,145 3,210 4,534 6,101 Medium truck 1,420 2,473 3,700 5,226 6,994 NH2-NH32 3 axle truck 2,599 4,527 6,774 9,567 12,803 Truck > 3 axle 1,120 1,950 2,919 4,122 5,517 Other Motorbike 1,271 1,567 1,567 1, Total 13,169 22,458 33,076 45,624 60,896 1)-4 Bridge Planning Bridge Plan of Hong Ha Bridge is described in this chapter. Study Team has reviewed the results of existing study report, and proposed a new bridge plan of Hong Ha bridge including approach bridge taking consideration of span length in the part of main river, sub main river and both side dikes. Proposed new three bridge plan are shown in the Table 3 and Fig. 4. Main span length of the Option 1 has been changed to 127m taking consideration of the cost performance. In the Pre FS study the main span length of the PC Box girder Option was 135m.

8 Table 3 Proposed new three bridge options by Study Team Bridge Plan Option-1 Option-2 Option-3 Bridge Type Span Length Height of Main Structure 85+5@ m PC Box Girder =805m (Upper floor of Box Cable-Stayed Bridge Extradosed Bridge 160+2@ =1,060m 160+2@ =805m Girder) +119m (Top of the Tower) +52m (Top of the Tower) Structure Pre-Stressed Concrete with Box Girder Tower:Reinforced Concrete Girder:Steel Edge-Girder Tower:Reinforced Concrete Girder : PC Box Girder with Corrugated Steel Web Plate Option-1 PC Box Girder Figure 4 3 Options for Hong Ha Bridge @ = @ = @ = ( P31 P32 P33 P34 P35 P36 P37 P38 P39 P40 P41 P42 P43 P44 P45 P46 P47 P48 P49 P50 P51 P52 Cast-in-place pile 場所打ち杭 φ2000 L=40.000m Cast-in-place pile 場所打ち杭 φ2000 L=40.000m Option-2 Cable-Stayed Bridge P39 P40 P @ = @ = ( P31 P32 P33 P34 P35 P36 P37 P38 P42 P43 P44 P45 P46 P47 Option-3 Extradosed Bridge Cast-in-place pile 場所打ち杭 φ2000 L=40.000m Steel pipe sheet pile 鋼管矢板基礎 L=40.000m 鋼管杭径 φ @ = @ = @ = ( P39 P40 P41 P42 P43 P31 P32 P33 P34 P35 P36 P37 P38 P44 P45 P46 P47 P48 P49 Cast-in-place pile 場所打ち杭 φ2000 L=40.000m Steel pipe sheet pile 鋼管矢板基礎 L=40.000m 鋼管杭径 φ1200

9 Figure 5 Whole Length of Hong Ha bridge (3 Options)

10 1)-5 Project Cost Project cost of road section with 4 lanes from Trung Gia to Phuc Yen is shown to Table 5, with 6 lanes from Phuc yen to Phung is shown to Table 6 and whole road section from Trung Gia to Phung is shown to 7. Based on the existing design quantity of 3 bridges option, the 3 bridges cost has been reviewed with contracted Nhat Tan bridge s price and other records in Japan as of Dec Table 4 Project Cost from Trung Gia to PhucYen (4 Lanes, L=17km) Items Cost(100mi. JPY) Note Construction Cost(road) 69 Including middle & Small sized Bridges and IC Traffic Control Facilities 1 Land Acquisition 19 D/D & Consultant 8 Contingency 19 Total Cost 116 Const. Cost HONG HA Bridge Table 5 Project Cost from Phuc Yen to Phung(6 Lanes, L=20km) Items Cost(100mi. JPY) Note Road 115 Including middle & small sized Bridges and IC PC Box Girder Bridge 335 Option-1 Steel Cable-Stayed Bridge 410 Option-2 Extradosed Bridge 410 Option-3 Total Const. Cost 450~525 Land Acquisition 82 D/D & Consultant (Including Traffic Control Facilities) Contingency 104 Const. Cost*20% Total Cost ~762 Construction Cost Table 6 Total Project Cost from Trung Gia to Phung(L=37km) Items Cost(100mi. JPY) Note 519~594 Traffic Control Facilities 4 Land Acquisition 101 D/D & Consultant 59 Contingency 123 Total Cost 806~881

11 Items Table 7 Project Cost in Vietnamese Dong and Japanese Yen Currency in case of Cable-Stayed bridge (from Trung Gia to Phung, 37km) Construction Cost Inner Currency Dong:(Bil.VND) Foreign Currency:Yen (100mil.Yen) Total Cost in Japanese Yen (100mil.Yen) Note 10, Cable Stayed Bridge ETC Facilities Land Acquisition Cost 2, Consultant Fee Contingency 1, Total Cost 14, (Exchange Rate 100 mil.yen= bil.vnd) * Foreign Currency Ratio:264/881=30% 2) Outline of the Result of Preliminary Financial and Economic Analysis 2)-1 Calculating basis for FIRR When calculating Financial Internal Rate of Return (hereinafter referred to as FIRR) on Investment for RR4(37km), calculation basis has been set taking consideration of indexes of economical conditions in Vietnam as stated below. Discount Rate : 12.0% Inflation Rate : 8.0% Project Period: 30~40 years Toll Price : 5 cent/km(900 VND/km), (Toll Price will be revised according to inflation rate every year. ) Operation & maintenance cost : 50(Thousands USD/km/year)(refer to Page 3-68) Dividend for SPC : None Figure 6 Index of Inflation rate in Vietnam Lending interest rate (%) Deposit interest rate (%) Inflation, GDP deflator (annual %) Real interest rate (%)

12 Table 8 Indexes of lending interest rate, inflation rate etc., in Vietnam Lending interest rate (%) Deposit interest rate (%) Inflation, GDP deflator (annual %) Real interest rate (%) Source: Data-Base of World Bank Table 9 Forecast of Traffic Amounts and Toll Revenue Traffic (1000 vehicles/day) Toll Revenue Note 1NH3-NH2 2NH2-NH32 (mil. USD/year) Supposed to be opened in )-2 Case setting to be analyzed in PPP scheme for implementing construction project Six cases of PPP scheme FIRR analysis has been proposed and conducted in order to be considered which is the best implementation scheme for investment of private company and government. Figure 7 Target Area for Study Phung Hong Ha bridge Phuc Yen NH-32 NH-18 Noi Bai Airport Trung Gia NH-3 2Phung~Phuc Yen(20km) 1Phuc Yen~Trung Gia(17km)

13 Table 10 Supposed 6 cases in PPP scheme for implementation of the project RR4 (37km) Road Length Project Cost Investors for the Project Form of Investment Case-0 Case-1 Case-2 Case-3 Case-4 Case-5 37km 971 mil.usd 37km 971 mil.usd 37km 971 mil.usd 37km 971 mil.usd 20km (Phuc Yen~ Phung ) 828 mil.usd Construction 32km 425 mil.usd O & M 37km Gov. s VGF: 0 % Private Investors :100 %(Const. D/D S/V O&M) Debt/Equity Ratio= 7 : 3 Gov. s VGF: 30% Private Investors :70 %(Const. D/D S/V O&M) D/E Ratio= 7 : 3 Gov. s VGF: 30% Private Investors :70 %(Cont. D/D S/V O&M) D/E Ratio= 7 : 3 Gov. s VGF: 50% Private Investors : 50%(Const. D/D S/V O&M) D/E Ratio= 9 : 1 Gov. s VGF: 30% Private Investors : 70%(Const. D/D S/V O&M) D/E Ratio= 7 : 3 The 17km-section from Trung Gia to Phuc Yen will be built under other BT scheme. Gov. will construct Hong Bridge with JICA s Yen Loan. Private Investors will be responsible for O & M of whole section of 37km and construction of the road section 32km except Hong Ha Bridge. Capital Investment Borrowing from commercial banks Capital Investment Borrowing from commercial banks Capital Investment Borrowing from Public fund such as JICA,W.B.,and ADB 2 STEP Loan Capital Investment Borrowing from Public fund such as JICA,W.B.,and ADB 2 STEP Loan Capital Investment Borrowing from Public fund such as JICA,W.B.,and ADB 2 STEP Loan JICA s Yen Loan Capital Investment Borrowing from commercial banks

14 2)-3 Result of preliminary financial analysis The result of financial analysis of six cases is shown in the Table 11. Case Case 0 Case 1 Case 2 Case 3 Table 11 Result of the financial analysis on six supposed cases Project Cost FIRR(%), Financial (mil.usd) NPV(mil.USD Estimation VGF(%) D/E:7: D/E:7: D/E:7: D/E:9: No good No good Good Better Note If traffic amounts would be 20% under forecast, FIRR & NPV would down to 11.4%and mil. USD VGF should be under 30% in the Decision No.71. Case D/E:7: Good Case D/E:7: Better Hong Ha Bridge would be built with ODA Case 0 and 1 has been estimated no good financially. Case 2 will be not so bad, because if traffic amounts would be 20% under forecast, FIRR and NPV would down remarkably. Case 3 has been estimated good, but VGF exceeds limit of the regulation in the Decision No.71, so it will need approval by the prime minister. Case 4 has been estimated better financially, because project cost will reduce to 85% comparing to Case 0, 1,2 and 3. In the Case 5,government will build the Hong Ha bridge with ODA, and the PPP investor will construct 32km expressway except Hong Ha bridge. After the completion of the bridge and expressway, government will lend the Hong Ha bridge to the PPP investor without any charge, PPP investor will be in charge of operating and maintenance whole section of expressway including Hong Ha bridge and collect toll during business period. So Case 5 would be so called combined ODA and PPP scheme. Case 5 would be most

15 favorite scheme for private sector, because project cost is least in six cases and estimated to be better financially. The FIRR in Case 5 wlll be improved with lower interest rate than 12 %. 2)-4 Result of calculation of Economical Internal Rate of Return(EIRR) The results of calculation EIRR and B/C are shown in the Table 13, it has demonstrated an economical effectiveness of the project. And it has been certified that the expressway of RR4(North western section) is very useful as social infrastructure after completion of the project period. Table 12 Result of the calculation EIRR and B/C (Unit:million USD) Year Reduction Inflation Yearly Saving Time BenefitRunning cost saving Benefit Total Benefit Construction, O & M Cost Yearly Benefit Rate Rate Simple Value Present Value Simple Value Present Value Simple Value Present Value Simple Value Present Value Simple Value Present Value % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % , , % , , % , , % , , % , , % , , % , , % , , , % , , , % , , , 計 15, , , , , , EIRR 16.4% B/C 1.75 NPV 493.6

16 3) Analysis on environment and social aspects In Vietnam, it is provided that environmental impacts shall be assessed in two stages of Initial Environment Examination (IEE) and Environmental Impact Assessment (EIA). The assessment of the project route is now in the intermediate phase of the first stage. In this Study, the environmental and social impacts were examined mainly based on the IEE interim report, results of a current condition survey, environment-related laws and regulations of Vietnam. - Most of the area north to Red River is farmland where wet-rice double-cropping or double-cropping of wet-rice and corn are practiced. As for the section planning to be constructed through the expansion of Provincial Highway No. 35, settlements along the highway would be affected. - There are many houses in the waterside land of the Red River. In the are south to Red River, many farm owns banana farmland - The project route does not pass through any nature reservation parks. According to local environmental consultants, the project route is unlikely to pass through any ecologically- important areas but a survey is required for the Red River and the wetland because rare aquatic organisms possibly inhabiting these areas. - No survey on minority or indigenous people has been conducted so far, so a survey of residency needs to be conducted. The project is expected to contribute 1) to t reduce exhaust gases emitted from vehicles through easing traffic jam in the central part of Hanoi, 2) to promote development of the northwestern side of Hanoi city, create jobs, and facilitate growth of the local economy, and 3) to promote smoother travel. On the other hand, large-scale resettlement would be required since approximately 400 houses are on ROW of the proposed alignment. It is necessary to discuss with local residents fully in advance and make efforts to form a consensus. Appropriate compensation must be provided for residents subject to resettlement. The project might affect the lives of neighborhood residents substantially, so full prior discussion is required. The option with the least environmental impact from a short-term perspective is without Project. As described above, however, the proposed project is expected to make a great contribution to easing traffic jams and the growth of the local economy. It is believed that the project will be able to maximize positive effects on the environment and society by taking appropriate measures to reduce negative impacts.

17 (4) Project Schedule Schedule is as shown below from the point when land acquisition and detailed design start after concession contract between government and SPC in case of PPP. Table 13 Implementation Schedule Items 1 st year 2 nd year 3 rd year 4 th year 5 th and subsequent years Detailed design Land acquisition Construction Operation and maintenance Selection of contractors Construction: 40 months In the case of a BOT project, in general, the private enterprise implementing the project (SPC) operates and maintains the road, in addition to construction of the road, in the fifth and subsequent years until it recovers the investment. (5) Feasibility for implementation of the Project The section south to proposed Project, namely from the interchange with NH32 to NH 1A would be implemented by BT scheme. Concession contract is shortly expected to be made between two Vietnamese companies and Vietnamese government, which could be consider to indicate high feasibility of proposed Project. The Project requires high construction cost for long span Hong Ha Bridge with its length of 5km. How to get a return on investment safely and favorably is critical issue for private companies. Appropriate VGF would promote the action by private companies for the contract.

18 (6) The advantages of Japanese companies in Technological Aspect 1) Operation and Maintenance of the expressway Vietnam has practically no experience in the operation and maintenance of expressways. As it is anticipated that the age of fully-fledged expressways will arrive in the country in the future, private enterprises with experience in expressway operation and maintenance utilizing advanced ITS technology are expected to participate in the project. At present, Vietnam has not only this but also many other expressway construction projects, and for all these projects, advanced traffic safety management measures can be taken and a wide range of toll fee collection systems adopted. And making the most of ETC facilities that do not require cars to stop for toll fee collection or fail to collect toll fees is one of the issues to be addressed in these projects. The know-how accumulated by Japanese expressway companies through the operation and maintenance of about 9,000-km high-standard arterial roads is expected to provide a standard for solving these issues in Vietnam. In order to ensure that Japanese expressway companies and their group companies fully demonstrate their know-how in operation and maintenance services, it is desirable that they participate in the project as an entity that implements it. To that end, Japanese companies should invest in the special purpose company (SPC) for the project and provide toll road operation and maintenance services as part of the entity, and by doing so, they will be able to establish a safe and secure expressway operation and maintenance system based on Japanese standards in Vietnam. Expected specific forms of participation by Japanese companies in operation and maintenance as well as construction work are shown in the table below. Table 14 Detailed operation and maintenance technology for expressway Participating companies Form of participation Advantages in technological aspect Expressway companies Investment in SPC Operation & Maintenance System using ITS such as Remarks Joint ventures with Vietnamese companies Banks and other financial institutions Electric manufacturers, etc. Investment in SPC Selling facilities and instrument for O & M of Vietnamese expressway ETC, Traffic Safety Control System and so on Sales of ETC cards - Sales of ETC system equipment (such as on-board devices) - Sales of traffic guidance and information systems

19 2). Design, construction and material to construct Cable-Stayed bridge and Extradosed bridge The route covered by this project extends a total of 37 kilometers and will cost 1.1 billion USD to construct. The project scope covers the construction of a cable-stayed bridges that will have center span length 370 meters, and for which it is anticipated that Japanese materials, design and construction technologies will be utilized. The site at which this bridge to be constructed is located in the Red River Delta, and there is layer of soft soil ground with an SPT N-value approaching zero that extends to a considerable depth. The construction of the substructures is thus expected to be difficult and demanding Japanese bridge construction technology. The Red river to be spanned by this bridge is about 5,000m in width and are strategic routes for river transport bound for Hai Phong City, with a navigation clearance of 80 meters. It will therefore be necessary to ensure that river traffic is subject to minimal disruption during construction. In recent years, the costs involved in the maintenance of bridge superstructures have begun to be assessed in terms of life cycle costs, and the weather-resistant steel that is being employed in many steel bridges in Japan, is considered to represent one example of this trend. 3) Japanese Company s Image in the Special Purpose Company established in Vietnam When Japanese company will participate in the project, an image for implementation system of the project is shown in Fig. 8. It corresponds to the PPP scheme, of which has been referred to Case 5 and estimated excellent in the FIRR analysis. In the Case 5, Vietnamese government will construct Hong Ha Bridge with ODA loan, while PPP investor will construct expressway section with length of 32km, and then PPP investor will operate and maintain whole section of expressway including Hong Ha Bridge. Of course Government will lend Hong Ha Bridge with no charge to PPP investor during business period. It would be referred to as PPP scheme combined ODA scheme. The image of project implementation system in Fig 8 has been planed based on the results of the interview study for the Vietnamese officials MPI, MOT, Hanoi Authority for Planning and Investment and officials in Vietnamese private companies such as Him Lam Corporation, BITEXCO and VINACONEX. And it has been confirmed to be valid according to the law in Vietnam.

20 Figure 8 Japanese Company s Image in the Special Purpose Company established in Vietnam Hong Ha Bridge Construction ( 5km) Yen Loan Project(STEP) Road Construction under PPP Scheme (32km) Vietnam HPC or MOT Construction Contract Joint Venture of the Japanese Companies ODA, Yen Loan (STEP) JICA HPC SPC Japanese Share 51% (NEXCO Companies and, General Contractors ) Vietnamese Share 49% Bank Loan Contract O&M Completed Hong Ha Bridge (L=5km) Toll Revenue Japanese NEXCO Section 37kmExpressway O & M Orders from SPC Road Const. J.V. Completed Expressway (L32km) Construction Contract Pay toll Services Expressway Customers

21 (7) Detailed schedule to realization of the project and risks of obstruct the project MOT has submitted FS report on the study section of the RR4 to the cabinet at the end of Nov. 2010, and is waiting for prime minister s approval for implementing the project. A typical schedule for realizing the project under PPP scheme is supposed to be described in the Table 15 after obtaining the prime minister s approval. Table 15 A supposed schedule to realization of the project Items HPC s application of the PPP project plan to the MPI MPI s Judgement and approval Announcement the candidates E.O.I and P.Q. of the Companies and judgment for International Competitive Bidding Estimation of the Bidders and Negotiation for Contracts Conclusion of the Concession Contract Detailed Design and Land acquisition Remarks Approximately 10 months

22 Table 16 Hong Ha Bridge Construction Schedule Using Yen Loan from JICA Items Feasibility study SAPROF Dispatch of JBIC appraisal mission Pledge Loan Agreement Selection consultants Detailed design of Support for bid tendering Start construction of Table 16 is assumed to be the earliest schedule. Bridge construction is estimated to require approximately 40 months from start to finish. Construction of Hong Ha Bridge is believed to be the critical element in the entire PPP project processes including construction of the road section. After finishing detailed design and hand-over the land to the contractor, construction works will be commenced. The construction works will take 40 months, so the RR4 (Northwest section) is supposed to be completed in 65 months after submission of the application for the project by the HPC. There are some risks to obstruct implementation of the project. A supposed biggest risk is objection against project by the people who are forced to be transferred. There may be more than 380 household to be forced to be removed in order to construct 37 km road, so the land for the 380 household should be prepared to acquire the ROW smooth. Besides there may be another risks to delay the progress of the project. If it were not objective standard for estimating bidders in the international competitive bidding in the government side, even international competitive bidding and negotiation contract may be the risk for delaying the implementation of the project.

23 (8) Project Location Map