Vietnam Southern Project Trend : Smart City Comprehensive Portal

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Active infrastructure projects to lay the foundation for sustainable economic growth

Strengthening cooperation with local partners is essential when carrying out projects in Vietnam

Southern Vietnam project trend

Vietnam recognizes that the infrastructure industry is an important industry for strengthening the national foundation and preparing a foundation for sustainable economic growth, and is promoting infrastructure development projects in various fields. Vietnam's infrastructure industry consists of transportation infrastructure such as roads, bridges, railways, ports, and airports, energy supply facilities such as power and gas supply facilities, and urban operation infrastructure such as water supply and sewage and garbage disposal facilities. Vietnam mainly utilizes government budget and ODA funds, and in 2020, it enacted the Public-Private Partnership (PPP) Law to promote the participation of foreign investors.

In addition, in order to fulfill the promise to reduce greenhouse gas emissions by 24% by 24 at COP2030 (the 9th UN Climate Change Conference), investments in renewable energy infrastructure such as solar power generation, inland wind power generation, and offshore wind power generation projects were also made. putting effort into Although there are difficulties in attracting investment in renewable energy infrastructure due to lack of legal basis and outdated transmission infrastructure, the Vietnamese government has established regulations and mechanisms for carbon emission management through the implementation of the domestic carbon market operation plan after COP26. We were able to confirm the will and efforts for energy infrastructure.

Project Trends in Southern Vietnam

Southern Vietnam can be divided into the southeastern region centered on Ho Chi Minh City and the southwestern region centered on Can Tho City, located in the Mekong Delta and one of Vietnam's five centrally-controlled cities. Projects in southern Vietnam are divided into projects in the southeast, southwest, and south regions.

1. Southeast

The southeast of Vietnam is the region with the most active infrastructure projects in Vietnam, along with neighboring provinces and cities centered on Ho Chi Minh, which is called the economic capital. Major neighboring provinces and cities include ▲Binh Duong and Dong Nai, where large-scale industrial complexes are built ▲Ba Ria – Vung Tau, which has the only oil base in Vietnam and has a port City ▲ There is Long An Province, which is the gateway from the southeastern region to the southwestern Mekong Delta region.

지역	Project	Contents
Ho Chi Minh	Tan Son Nhat International Airport T3 Terminal Construction Project	– Estimated cost: approximately $4 million – Delayed plans to start construction in December 2021. Waiting for land transfer – The construction is expected to take 24 months, and the airport capacity is expected to increase by 2000 million per year
	Metro Line Project	– Estimated cost: about $250 billion – 2012~2035, Line 1 scheduled to operate in 2024 – A total of 8 lines are planned, among which lines 1,2,5, 1 and 2023 are currently under construction due to successful investment attraction. The opening of Line 4 is imminent, such as conducting a test run in April XNUMX.
	Ho Chi Minh City Third Ring Road Project	– Estimated cost: about $32 billion – Scheduled for construction between 2023 and 2026 – Total length 76.34km, purpose of expanding connectivity with neighboring cities and improving traffic inside Ho Chi Minh City
	North Saigon 1 Wastewater Treatment Plant Project	– Estimated cost: approximately $2 million – Scheduled for construction between 2024 and 2026 – It is a two-phase construction plan, and plans to build a new wastewater treatment plant (WWTP) with a treatment capacity of 2m142,000/day (phase 3) and 1m230,000/day (phase 3)
	Solid Waste Treatment and Energy Recovery Plant Construction Project	– Estimated cost: approximately $2 million – Scheduled for construction between 2025 and 2027 – Solid waste treatment and incineration, treatment capacity 1,000 tons/day, purpose of reducing land area used for landfill and producing eco-friendly electricity using solid waste
bingeung	Water Environment Improvement Project	– Estimated cost: approximately $3 million – Scheduled for construction between 2023 and 2028 – Plans to build a new wastewater treatment plant (WWTP) with a treatment capacity of 20,000 m3/day
Dong Nai	Long Thanh International Airport	– Estimated cost: $160 billion – Start of construction in January 2021. Target to complete phase 1 by January 2025 – After completion, it will have 4 runways and 4 terminals, capable of handling 1 million passengers and 500 million tons of cargo annually.
Dong Nai	Nhon Trach 2 Power Plant Project	– Estimated cost: $1 million – Scheduled for construction between 2023 and 2035 – Regular maintenance projects of power plants, major equipment maintenance such as gas turbines and steam turbines
Ba Ria to Vung Tau	Cai Mep Ha Logistic Center Project	– Estimated cost: $9 million – Scheduled for construction between 2021 and 2040 – Total area of 1,687ha, capable of accommodating 200,000~250,000DWT vessels
Ba Ria to Vung Tau	Su Tu Trang Gas Field Development Project	– Estimated cost: about 1 million dollars or more – Scheduled for construction between 2022 and 2026 – Su Tu Trang gas field development project estimated to contain 6,300 million barrels of condensate and 1,930 billion m3 of gas
Long An	Long An I and Long II LNG Power Plant Project	– Estimated cost: about $30 billion – Scheduled for construction between 2021 and 2026 – 90ha scale, units 1 and 2 with a total power generation capacity of 1,500MW

[Source: Vietnam Ministry of Planning and Investment (MPI)]

2. Southwest

Southwestern Vietnam is located in the Mekong Delta and is not only a nationally important agricultural production area, but also the world's second most biodiversity ecological treasure trove. Accordingly, it is recognized that the infrastructure development of provinces and cities along the Mekong River should be able to secure the ecological balance and protection of natural resources in the area in the direction of adapting to climate change. Therefore, the infrastructure industry of the general southwestern region is being developed centered on Can Tho City, a centrally-controlled city.

지역

Project

Contents

Can Tho

Nam Con Son 2

Gas Pipeline Project

– Estimated cost: about $13 billion

– Scheduled for construction between 2021 and 2024

– construction of 325 km offshore gas pipeline, 39 km onshore gas pipeline, 25 km onshore liquid pipeline;

For gas transportation from gas field to power plant, about 2,000 million cubic meters per day (MMSCMD) can be transported

O Mon II Thermal Power Plant Project

– Estimated cost: approximately $13 million

– Scheduled for construction between 2024 and 2025

– 1,050 MW gas-fired power project, currently requesting permission

[Source: Vietnam Ministry of Planning and Investment (MPI)]

3. Cross-region

In Vietnam, roads are narrow when traveling between provinces and cities, and there are no roads that lead to straight distances between major cities. Therefore, interregional highway construction projects are actively underway, thereby shortening the reach time between regions.

지역	구분	Contents
Ho Chi Minh – Binh Duong – Vinh Phuc	Ho Chi Minh – Thu Dau Mot – Chon Thanh Expressway Project	– Estimated cost: approximately $7 million – Scheduled for construction between 2023 and 2026 – Construction of a highway with a total length of 68.7 km, 6 lanes round trip + 4 lanes round trip
Ho Chi Minh to Tay Ninh	Ho Chi Minh – Moc Bai Expressway Project	– Estimated cost: approximately $7 million – Scheduled for construction between 2023 and 2027 – A highway project with a total length of 53.5 km from Ho Chi Minh to Moc Bai, the border gate of Cambodia
Ho Chi Minh to Dong Nai	Ho Chi Minh – Long Thanh – Dau Giay Expressway Project	– Estimated cost: about $12 billion – Opened in 2015 – Total length 55km, including 14 bridges
Mekong Delta	Chau Doc – Can Tho – Soc Trang Expressway Project	– Estimated cost: about $13 billion – Scheduled for construction between 2024 and 2026 – A north-south highway that crosses Can Tho City, the center of the Mekong Delta region, with a total length of 200km
Ho Chi Minh to Can Tho	My Thuan 2 Bridge & Road Connection Project	– Estimated cost: $2 million – Scheduled for construction between 2020 and 2023 – A total of 61.4km road connecting Ho Chi Minh in the southeast and Can Tho in the southwest

[Source: Vietnam Ministry of Planning and Investment (MPI)]

future investment trends

Vietnam needs a lot of investment for infrastructure development. It has been investing in projects such as roads, ports, airports, bridges, and energy with low-interest loans from the World Bank (WB) and Asian Development Bank (ADB). However, preferential loans are decreasing due to Vietnam's economic growth, and foreign debt is being limited as a policy to lower the public debt ratio. Therefore, it is expected that Vietnam will proceed with infrastructure projects by appropriate capital in the form of private investment (PPP).

There are two major future infrastructure projects in Vietnam. One is a railroad project that connects the whole country. The project, along with the North-South Expressway, aims to modernize transportation and logistics infrastructure and enhance connectivity and competitiveness between the regions. The other is a sustainable development project in the Mekong Delta region. The project aims to protect crop production and livelihoods and strengthen adaptability through water resource management and reservoir construction in agricultural and rural areas vulnerable to the effects of climate change. Vietnam is expected to promote Vietnam's long-term growth through these two projects.

1. Southern Railway Infrastructure Project

Vietnam approved the '2021 National Rail Network Basic Plan' with a target of 2050 in 2030 and confirmed the construction of nine new railways with a total length of 2030 km by 2,362. Subsequently, in April 9, Decision No. 2023/QD-TTg, it will invest a total of VND4 trillion (approximately $396 million) in 2023 railway projects across the country from 2030 to 11. Among a total of 1 railway projects, the Dong Nai-Vung Tau, Ho Chi Minh-Gun Tho, and Ho Chi Minh-Dong Nai lines have been selected as priority and are scheduled to be invested.

[Source: Ho Chi Minh Trade Center General]

2. Sustainable Development Projects in the Mekong Delta

(Mekong Delta Region Development Policy Operation, Mekong DPO)

The Mekong DPO is one of the major projects in Vietnam's response to climate change. The project will be implemented in 2025-2030 to promote transportation, agriculture, environmental and socio-economic development in the Mekong Delta region. Vietnam's Ministry of Planning and Investment is developing foreign capital options for *2022 international cooperation organizations and Mekong DPO projects from March 3. In addition, the World Bank (WB) organizes a regional investigation team to discuss the scale and plans of the Mekong DPO project.

The Mekong DPO project received about $6 billion of investment from six international cooperation organizations and about $28 billion of Vietnamese national capital, bringing the total investment to about $12 billion. The Vietnam Ministry of Planning and Investment is preparing a project proposal by collecting opinions from the government, ministries, branches, and leaders of the Mekong Delta region. The project proposal is scheduled to be submitted to the National Assembly in June 40, and the investment policy is expected to be approved within the year.

* WB (World Bank), KEXIM (Korea Export-Import Bank), ADB (Asian Development Bank), AFD (French Development Agency), KFW (German Reconstruction Bank), JICA (Japan International Cooperation Agency)

Suggestions for Korean Companies

According to a Vietnamese project consulting firm, Vietnamese investors often need Korea's advanced technology. However, the desire to share costs and transfer technology usually requires the establishment of a joint venture. In addition, due to lack of project experience, lack of capital, and lack of legal grounds for project execution, it is common for projects to fail to meet the planned schedule or progress smoothly. Therefore, he said that it is desirable to operate the business with patience rather than haste when executing a project in Vietnam. He explained that if a Vietnamese company lacks project execution power due to a lack of project experience, suggesting the direction of project operation and making them understand is effective for project progress.

Vietnam offers a very open and favorable environment for foreign investment, especially in manufacturing and power generation infrastructure, where a number of large-scale project investments are being made. Therefore, he said, Korean companies should make good use of market opportunities in Vietnam and strengthen cooperative relationships with local partners to prepare for successful business.

Source: Vietnam Ministry of Planning and Investment (MPI), local articles, World Bank (WB), Ho Chi Minh Trade Center

Source: KOTRA