A map illustrates the HCMC-Moc Bai expressway. The project has faced a cost overrun by nearly 50% - PHOTO: DIRECTORATE FOR ROADS OF VIETNAM

HCMC – The estimated investment for the first phase of the HCMC-Moc Bai expressway project has risen from VND10.7 trillion (US$466.7 million) to VND15.9 trillion, according to the HCMC Department of Planning and Investment.

The department has sent the municipal government a report on the project, which is considered a key national one. Accordingly, the cost overrun was attributed to higher compensation and site clearance costs, which have risen to VND7.4 trillion from the initial VND5.1 trillion, Thanh Nien newspaper reported.

In the first phase, 50 kilometers of the expressway would be built, including 23.7 kilometers in HCMC and 26.3 kilometers in Tay Ninh.

Of the investment for the first phase, VND5.4 trillion was planned to be used for the construction of the road, VND7.4 trillion for site clearance, VND1.8 trillion for the project management, consulting and loan interest and VND1.2 trillion for backup.

The project will be executed under the public private partnership format with a build-operate-transfer contract. Part of the compensation and site clearance costs will be sourced from the budgets of HCMC and Tay Ninh Province, while the remainder will be mobilized by the investor.

According to the HCMC Department of Planning and Investment, HCMC’s biggest obstacle to the project is locating capital sources for the VND5.9-trillion site clearance cost for the section passing through the city.

The city’s mid-term public investment for 2021-2025 is nearly VND127.7 trillion, which must be used for projects under construction, using the State capital and allocated capital this year and for backup. Therefore, the capital for the HCMC-Moc Bai expressway project was sourced from the mid-term public investment for 2021-2025.

HCMC has proposed the Government raise the mid-term public investment for 2021-2025 by over VND119.4 trillion. If approved, the HCMC Department of Planning and Investment suggested the Department of Transport review and determine priority traffic projects, prioritizing the HCMC-Moc Bai expressway project.

The expressway, once in place, is expected to ease pressure on National Highway 22, support the transport between HCMC and Tay Ninh and to Cambodia and other ASEAN countries, and boost the southern region’s economic development.