In almost economic sectors of Vietnam, transport is a sector using ODA capital most and earliest, because transport infrastructure investment always goes one-step ahead as a foundation to promote growth of the domestic economic sectors.
However, this area requires a large amount of investment capital that cannot meet the demand if only focusing on mobilizing domestic capital. Hence, ODA becomes an important capital source for the State budget and additional external source to meet the demand for development investment capital, to help absorb the modern scientific technology achievements and develop human resources as well as increase the attraction of FDI inflow.
On July18, 2015, VEC held a groundbreaking ceremony for Construction and installation Package (J3): Phuoc Khanh Bridge belonging to Ben Luc – Long Thanh highway project (financed by JICA). Sumitomo – Cienco 4 partnership won the bid through extensive international bidding.
According to Mr. Mai Tuan Anh - General Director of Vietnam Expressway Corporation (VEC), currently, with the projects using Japanese ODA capital in general and the projects invested by VEC in particular, Vietnam enterprises are able to join if they meet the project requirements of financial capability and professional experience.
In expressway construction projects of VEC, typically the project of Ho Chi Minh City-Long Thanh - Dau Giay expressway construction, Vietnam enterprises (including the Contractors belonging to the Ministry of Transport and the Ministry of Defense and the private contractors) participated in 5 of 8 constructions and installation packages financed by JICA. In project of Da Nang-Quang Ngai expressway construction, Vietnam enterprises (including the Contractors belonging to the Ministry of Transport, the Ministry of Construction and the Ministry of Defense and the private contractors) participated in 7 of 8 constructions and installation packages for the component part financed by JICA; the remaining package was performed by Vietnam - Spain contractor consortium. In the project of Ben Luc-Long Thanh expressway construction, Vietnam enterprises (including the Contractors belonging to the Ministry of Transport and the Ministry of Construction) joined together with Japanese contractors as the bid winners of 3 packages using STEP capital of JICA.
In the above-mentioned projects, the selection of contractors is performed strictly through international competitive bidding procedures. Thus, presence of Vietnam enterprises in projects using Japanese ODA capital is increasing.
For projects that Vietnam contractors joined together with international contractors, especially in the bid packages requiring special and advanced technology, Vietnam enterprises actively received the technology transfer, through which they enhanced their capability of technology and construction management.
Previously, due to limitation of financial capability and professional experience for bidding participation, Vietnam enterprises often engaged the bid as subcontractors of international businesses. However, until now, after many years of participation in ODA projects, numerous Vietnam enterprises have enough capability to engage big packages following the international competitive bidding procedures and have won as independent contractors or contractors joining together with international contractors. Vietnamese enterprises will not get any obstacles in participation in ODA projects if they meet the project requirements of financial capability and professional experience.
Compete fairly when participating in the international “arena”
Before participating in projects using ODA capital, Vietnam enterprises should understand the procedures of donors and international practices thoroughly in order to meet the requirements of technical, financing and experience to be able to participate in bidding in way of fair competition with other international contractors.
Currently, ODA projects require a strict contractor selection process following the procedures of international competitive bidding (for large-scale bidding packages) and domestic competitive bidding (for small-scale bidding packages). In fact, numerous Vietnamese contractors has participated in competitive bidding packages and won large-scale packages worth over $100 million (CIENCO4 won the bidding package no. 9 -Ho Chi Minh City-Long Thanh-Dau Giay expressway construction project). Joining together with Japanese contractors in Ben Luc-Long Thanh expressway construction project, Vietnamese contractors such as VINACONEX E&C, CIENCO4 have been participating with significant proportion.
“Through the implementation of ODA projects of Vietnam Expressway Corporation, we can see that the participation of Vietnamese enterprises in these projects is increasing, and it shows the growth in all aspects of Vietnamese enterprises”- General Director, Mai Tuan Anh assessed.
The importance of ODA for Vietnam’s economic development is as an important additional source of capital for development investment, to absorb scientific achievements, modern technologies and development of human resources. These are basic and long-term benefits to Vietnam, which help in adjusting the economic structure of the country, in increasing ability to attract FDI as well as in creating conditions for expanding investment and development.