TA4862-VIE Ho Chi Minh City Metro Rail System - ppiaf

1.2 Role of the current report
The current report addresses the first of these subjects under the PPIAF study. It is noted that
the objective for arrangements that are to be adopted for implementation and operation of the
Project are to:
• minimize overall costs to the government on a risk-adjusted basis, covering
‒ initial capital costs for infrastructure;
‒ ongoing operating and maintenance costs for infrastructure and train operations; and
‒ costs incurred by the government to manage implementation and operation of the
Project; and
• maximize the benefits of the Project, including maximizing MRT patronage.
The form of construction contracts is generally well understood, and is not addressed in the
current report. Rather, the focus is on:
• the operation and maintenance of infrastructure and provision of train services,
including the role of the private sector in undertaking and financing these activities;
• the extent to which infrastructure provision and financing can be undertaken by the
private sector; and
• the extent to which provision of infrastructure and its financing should be linked with
subsequent operations and maintenance of the Project.
Following sections of this report therefore:
• address some terminological matters to clarify subsequent discussion;
• present an overview of issues that will affect the role of the private sector with regard to
the Project, including features of the Project, its potential financial performance and the
structuring of government responsibilities in the transport sector; and
• identify a range of private sector roles and screen these to identify four models that will
be subject to a value-for-money analysis (i.e. the second component of the PPIAF
study).
1.3 Terminology
A range of terminology can be used to describe participants in, and arrangements for, the
financing, implementation and operation of an MRT line. To avoid confusion, the following
terms are used in this report:
• The Authority is the government agency that is responsible for ensuring the delivery and
operation of the MRT system.
• The term infrastructure contractor is used to describe the entity (or entities) that constructs
infrastructure, including the supply of directly associated equipment, under a contract to
the Authority. As will be described in Section 2.1, the infrastructure contractor should
be entirely independent of the Authority, i.e. the Authority owns no shares in it.
• Equipment suppliers may provide electrical and mechanical equipment (e.g. any or all of
trains, signaling and communications equipment, power supply systems, train control
systems, escalators, etc.) under contract either directly to the Authority or to an
infrastructure contractor or a concessionaire.
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