HCMC-Moc Bai Expressway

HCMC-Moc Bai Expressway: Boosting Economic Growth in Southern Vietnam and Cambodia

/ Guide to Invest in Cambodia / By

The HCMC-Moc Bai Expressway is a major infrastructure project in southern Vietnam aimed at improving connectivity and facilitating trade with Cambodia. The latest cost estimate for the project is VND16.73 trillion ($709.9 million), up VND6 trillion ($255 million) from late 2019. Despite the significant increase in cost, the project is expected to play a vital role in connecting Ho Chi Minh City with Cambodia, releasing traffic congestion on the National Highway No. 22, and facilitating economic growth in the region.

Background:

The HCMC-Moc Bai Expressway is a 53.5-kilometer (33.2-mile) toll road that will connect Ho Chi Minh City with the Moc Bai International Border Gate, a major crossing point between Vietnam and Cambodia. The project was initially estimated to cost VND10.7 trillion in late 2019, but the cost has increased to VND15.9 trillion in May 2020 and now to VND16.73 trillion due to various factors such as inflation, changes in the design, and the relocation of local residents.

According to a pre-feasibility report submitted to the Ministry of Planning and Investment by the HCMC People’s Committee, the expressway will have at least four lanes allowing maximum speeds of 120 kph (74.6 mph) and will be constructed as a build-operate-transfer (BOT) project with the investor recouping investment over 18 years and one month. Site clearance is expected to begin in the fourth quarter of 2023, with construction beginning in 2024 and expected to be completed in 2027.

Once completed, the HCMC-Moc Bai Expressway is expected to significantly reduce travel time between Ho Chi Minh City and the Moc Bai border gate, facilitating the movement of goods and people between the two countries. Additionally, the project will play a vital role in connecting Ho Chi Minh City with Cambodia, releasing traffic congestion on the National Highway No. 22, and facilitating economic growth in the region.

Benefits of the HCMC-Moc Bai Expressway

The Ho Chi Minh City-Moc Bai Expressway project is expected to bring numerous benefits to southern Vietnam and Cambodia. Upon completion, the 50-kilometer expressway will ease traffic pressure on the existing National Highway 22 that runs from HCMC to Vietnam’s Moc Bai border gate in Tay Ninh province, connecting with Cambodia’s Bavet border gate in Svay Rieng province. The expressway is designed to have a speed of 120 km per hour and will promote socio-economic development in Vietnam’s Southern Key Economic Zone, which includes Ho Chi Minh City.

Furthermore, the project will bring significant improvements to the transportation network in the region, reducing travel time and enhancing connectivity between Vietnam and Cambodia. National Highway 22 is also part of the Asian Highway Network, and the completion of the expressway will provide a vital link in this network, benefiting the wider region.

The Ho Chi Minh City-Moc Bai Expressway will be implemented as a public-private partnership (PPP) project, with a total investment cost of $711 million. Capital from Ho Chi Minh City and Tay Ninh’s budgets will account for about 44% of project investment, with private investors responsible for the remaining 56%, recouping their investment through tolls collected over 18 years and one month.

The project is expected to bring many investment opportunities to the region, with the PHI Group recently registering to invest in the project. As a major infrastructure project in Vietnam, the expressway is expected to contribute to the country’s ambitious infrastructure development goals, with estimates suggesting that Vietnam may require total investments of $605 billion to meet 83% of its infrastructure goals by 2040. Urban transportation, road, rail, and port infrastructure are among the sectors with top investment priorities.

Challenges and Criticisms

The Ho Chi Minh City-Moc Bai Expressway project has faced several challenges in its implementation. The Southern province of Tay Ninh has approved a resolution to implement the project, but Ho Chi Minh City has not yet determined the time to start the project. The delay in carrying out procedures for approving the investment policy will increase site clearance costs and risk capital loss due to the high price of materials.

Furthermore, the cost of site clearance currently accounts for about 47% of the total project investment, according to the HCMC Department of Transport. Ho Chi Minh City has issued a list of 28 key traffic projects to focus on construction investment from now until 2025, including the Ring Road 2, 3, and 4, the Ho Chi Minh City-Chon Thanh Expressway, and the Can Gio Bridge. Amongst these, the Ho Chi Minh City-Moc Bai Expressway project has yet to begin due to bottlenecks related to administrative procedures.

However, the city is striving to accelerate the implementation of the project by completing procedures for approving the investment policy in 2023. The delay in the project’s implementation has also been attributed to the high costs of site clearance and materials. Additionally, the city is focusing on completing other key traffic projects, including the Ben Thanh-Suoi Tien metro line, the Ring Road 2, 3, and 4, and the Ho Chi Minh City-Chon Thanh Expressway.

To speed up the implementation of these projects, the city has proposed to allow the city to consider and decide on the implementation of independent public investment projects to carry out compensation, settlement, and site clearance along traffic routes within the prescribed scope. The city plans to complete the required work to determine which projects will be implemented and which ones are at risk of not being completed in the first quarter of 2023.

Conclusion

The HCMC-Moc Bai Expressway is a major infrastructure project that has the potential to transform the transportation network and drive economic growth in southern Vietnam and Cambodia. The project has faced challenges and criticisms, including environmental concerns, socioeconomic impacts, cost-effectiveness, and project delays. However, its completion is eagerly awaited by many in the region, as it is expected to reduce travel time, improve connectivity, boost trade and investment opportunities, and stimulate economic growth in the surrounding areas.

The HCMC-Moc Bai Expressway is also expected to benefit the Mekong Southern Economic Zone (MSEZ), a key economic development zone in southern Vietnam. This railroad will help reduce the travel time and improve the traffic flow for containers moving between the MSEZ and Saigon Port. Upon completion, the Phnom Penh-Bavet expressway will reduce the travel time between Phnom Penh and MSEZ to about 90 minutes, which is expected to increase trade and investment opportunities between Cambodia and Vietnam.

Despite the challenges and criticisms, the HCMC-Moc Bai Expressway remains a critical infrastructure project for the region’s economic development. Its successful completion will have a significant impact on the transportation network, trade, and investment opportunities, and economic growth in southern Vietnam and Cambodia.

As a company operating in the region, we at MSEZ are excited about the potential benefits of the HCMC-Moc Bai Expressway and are committed to supporting its development. We believe that it will contribute to the growth and development of the region, improve the standard of living for local people, and facilitate greater economic integration between Vietnam and Cambodia.

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