PROJECTS

Feasibility and Structuring of Ninh Binh—Bai Vot Expressway, Vietnam

The problem

Vietnam’s development was hindered by slow and congested inter-city roads. The government wanted privately-financed expressways but had no experience with highway PPPs.

How we helped

Castalia assessed the technical and financial feasibility of a proposal for a privately financed 218 km expressway between Ninh binh and Bai Vot, which was planned as one segment of Vietnam’s North-South Expressway. We completed a market sounding with regional investors to determine how much capital the government could expect to raise. We developed a PPP structure and financing plan, including an estimate of viability gap funding required. In light of the estimated US$2.3 billion financing required and the limited financing capacity of institutions in region, we developed options to divide the expressway into three sections which could be procured separately.

Impact

The Government heeded our advice to divide the expressway into three sections, each of the sections being procured separately. The procurement has been launched, with the goal of selecting winning bidders in 2020. Once built, the expressway is expected to halve the journey time from Hanoi to Bai Vot, from seven hours to three hours.