Vietnam’s leading expressway builder VEC secures huge capital boost

State-owned expressway developer Vietnam Expressway Corporation (VEC) has been approved to have its charter capital increase by VND38.25 trillion from the 2023 level to VND39.4 trillion ($1.57 billion) for the 2024-2026 period.

Of the additional charter capital, VND1.56 trillion ($62.4 million) will come from the company's development investment fund and VND36.7 trillion ($1.47 billion) from state budget allocations, as per a decision signed by Deputy Prime Minister Ho Duc Phoc on June 13.

The new government funding aims to support five ongoing expressway projects under VEC's management.

Prior to the capital increase, VEC's charter capital stood at only VND1.12 trillion ($42.86 million), while the total investment for the expressway projects under its management exceeded VND108 trillion ($4.13 billion).

This significant disparity created financial challenges for VEC and prevented it from meeting the required debt-to-equity ratio, according to Minister of Finance Nguyen Van Thang.

Record revenue in 2024

In 2024, VEC recorded net revenue of over VND6.23 trillion ($238.44 million), a 22.7% increase from 2023. The company's gross profit reached more than VND3.6 trillion ($137.78 million), up 28%.

Its financial expenses amounted to more than VND3.02 trillion, with loan interest making up about 57% of the total financial costs. After deducting expenses, the firm’s post-tax profit hit nearly VND721 billion ($27.6 million), a 16.7% rise year-on-year.

As of December 31, 2024, VEC’s total assets stood at VND90.09 trillion ($3.45 billion). Liabilities were over VND50.34 trillion ($1.93 billion), slightly down from the previous year (VND51.82 trillion), while equity was over VND39.75 trillion ($1.52 billion), a 1.5% increase from 2023.

VEC is currently the investor and operator of several key transport infrastructure projects, with a total investment of hundreds of trillions of Vietnamese dong (VND100 trillion = $3.83 billion).

Most notably, a consortium led by VEC has been assigned to implement a VND56 trillion ($2.14 billion) project to construct Ring Road 4-Hanoi Capital Region Expressway section. The project is expected to be completed by 2027.

Previously, VEC was the developer of the Ben Luc-Long Thanh Expressway project, with a total investment of nearly VND30 trillion ($1.15 billion). Considered a vital artery in southern Vietnam, the project is around 80% complete and is scheduled to open to traffic in 2026. At the end of 2024, the project's work-in-progress construction value was VND19.36 trillion.

Another important project is the HCMC-Long Thanh-Dau Giay Expressway, with its phase 1 investment of nearly VND20 trillion ($765.46 million). The road has been proposed to expand from 4 to 8-10 lanes to meet increasing transportation demand.

The Noi Bai-Lao Cai Expressway, with an investment of about VND18 trillion ($688.9 million), is a strategic trade route connecting Hanoi to the northwestern provinces and the Lao Cai international border gate. This road has been in operation since 2014.

In addition, VEC operates other major expressways such as Danang-Quang Ngai (VND34.5 trillion), Cau Gie-Ninh Binh (VND8.97 trillion), and Tuyen Quang-Phu Tho (VND3.7 trillion), contributing significantly to the completion of the national expressway network.

VEC officially began operations on October 6, 2004, under the then Ministry of Transport. On June 17, 2010, the transport ministry issued a decision to convert the Vietnam Expressway Investment and Development Company into Vietnam Expressway Corporation (VEC) to enhance its position, capacity, and responsibilities.

The government’s goal is to develop VEC into a leading, professional developer and a main player for mobilizing both domestic and international capital through various forms, to develop the national expressway system through a model of self-construction, self-operation, and self-financing.