Boston, MA -- (ReleaseWire) -- 12/27/2012 -- BMI View: Construction activity in Vietnam continued to contract in the third quarter of 2012, prompting us to pencil in a mild contraction for our 2012 construction forecasts. Real growth is now expected to come in at a negative 0.2% in 2012, compared to our previous forecast of 0.1% real growth. Despite this downward revision, we remain convinced that a near-term recovery is still on the cards for Vietnam's construction industry - construction real growth is projected to reach 7.1% in 2013 - as monetary conditions remain conducive for construction. This recovery will be led by the residential and non-residential building construction sector as we expect the infrastructure sector to continue facing difficulties in securing project financing.
The major developments in Vietnam's infrastructure sector are:
- In September 2012, Thailand-based Italian-Thai Development signed a memorandum of understanding (MoU) to draw out the investment plan and technical design for phase 2 of the Halong-Mong Cai expressway project in the Quang Ninh province. The 134km project, which is part of the Noi Bai-Halong-Mong Cai expressway project, is expected to cost a total of US$2.1bn. The expressway is expected to take three years to be completed. In September 2012, A consortium led by South Korea's engineering and construction company Daelim Industrial has entered into a contract with Cantho Thermal Power Company Limited for the construction of a thermal power plant in the south of Vietnam. The contract has a value of US$335mn, with construction work to be completed by October 2015. The power plant is to be located in the O Mon district on the Mekong Delta. Daelim Industrial possesses a stake in the project worth US$285mn, with the plant to have the capacity to generate 330MW of electricity. Daelim Industrial will be responsible for the plant's design and construction, while its Japanese partner Sojitz Corporation will supply steam turbines.
- In October 2012, the deputy director of the railway administration, Nguyen Van Doanh, said that a total of 20 railway projects were earlier recommended by the Vietnam National Railway Administration to be developed under the forms of BOT, build-transfer and build-transferoperate, and this list of projects was submitted to the Ministry of Transport in early 2010; although a lack of investors prevented from starting them. Among the 20 railway projects calling for investment in 2010-2020, they include the 381km Lao Cai-Hanoi-Hai Phong railway line, the 114km Bien Hoa-Vung Tau route and the 49km railway connecting Trang Bom in Dong Nai with Hoa Hung in HCM City.
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