Vietnam’s move towards efficient transport solutions-
Road tunnels are relatively new in Vietnam. The country’s first major road tunnel was the Hai Van Pass tunnel, which opened in June 2005. Since then, 11 other key tunnels have been built or are currently under construction or planned as part of the government’s effort to improve connectivity across the country.
Southeast Asia Infrastructure analyses the major road tunnel projects, important because of their length and because they improve regional connectivity…
Completed projects
Vietnam’s landmark tunnel project, the Hai Van Pass tunnel, has been widely recognised as very successful. The 6.3 km tunnel has removed a transport bottleneck at the Hai Van Pass on National Highway 1. It also forms a part of the key road link between Lao PDR, Thailand, and Myanmar. The tunnel has helped increase economic activity in the region and facilitated the rapid development of the Da Nang Industrial Park and Thua Thien Hue province.
Construction work on the tunnel began in March 1997 and was completed in June 2005. The Ministry of Transport, which was the implementing agency, allowed the involvement of foreign contractors and consultants as it did not have the required experience to build the tunnel on its own (see Table 3). The Japan International Cooperation Agency (JICA) financed about 80 per cent of the final project cost of VND 1.54 trillion, 54 per cent lower than anticipated. In addition, the project’s economic internal rate of return was reported at 12.6 per cent as against the projected 11.4 per cent.
Another small but important tunnel, the Deo Ngang tunnel was commissioned in August 2004. It is the first tunnel project in the country to be developed on a public–private partnership (PPP) basis. The tunnel is located on National Highway 1A, and provides connectivity between Ha Tinh and Quang Binh provinces. The cost of the project is about VND150 billion.
The third tunnel project, the Thu Thiem tunnel, was commissioned more recently, in November 2011. It holds the distinction of being the first immersed road tunnel in the Southeast Asia region. The tunnel is located in Ho Chi Minh City and is beneath the Saigon river linking the Ho Chi Minh City’s District 1 with the Thu Thiem New Urban Area in District 2. The 1.49 km tunnel project was undertaken to provide seamless connectivity between the Thu Thiem peninsula and National Highway 1A, and was part of the East–West Highway project. The construction work, which was undertaken by a consortium of Japanese companies (see Table 2), began in 2004 and involved an investment of VND 9.86 trillion. This project has been funded by JICA, which contributed $500 million.
Ongoing projects
The success of the completed tunnel projects has paved the way for more such initiatives. Four more tunnels are currently under construction in the country. Together, these are worth VND 17.34 trillion and cover a total length of 5.25 km (tunnel sections). The most important one is the Ca Pass tunnel, which will improve connectivity between the Phu Yen and Khanh Hoa provinces. The project also involves construction of the 0.5 km Co Ma tunnel. The total cost of these two tunnels stands at VND 10.55 trillion. The project, which is being developed on a PPP basis through the Deo Ca Investment Company, involves investment from Vietinbank, Goldman Sachs Group, Inc., and France-based Credit Agricole Corporate and Societe Generale Bank. Once complete, the project is expected to provide faster connectivity between the north and south of Vietnam and boost socio-economic development in Central Vietnam (see Table 1).
Issues and challenges
While the government has firm targets and plans for the future, there are some outstanding issues that may pose risks for the sector and need urgent attention. Geological complexities create one of the biggest risks. Better risk identification and assessment is required for tunnelling projects to attract greater investments as unforeseen geological conditions often change the dynamics of projects. Other issues which also affected the progress of the Hai Van Pass tunnel project include land acquisition and resettlement and rehabilitation of affected people.
Outlook
Investments in more tunnel projects will be driven by the government’s plans for infrastructure development and expected financial assistance from JICA. The country has five tunnel projects lined up for the future (see Table 3). Going forward, the tunnel industry is expected to undergo a change. As Vietnamese players acquire greater expertise, bigger players are expected to bid for projects alone. Tie-ups between contractors and foreign equipment providers are expected to increase. There is also greater room for adoption of international standards and technology in tunnel design and construction methods.
