Adopting a business history approach, this paper explores the role and evolution of Vietnam Expressway Corporation (VEC) as a state-owned enterprise (SOE) delivery model for five highway projects in Vietnam's first phase of network development between 2004 and 2016. It draws upon insights from the field of transaction cost economics and resource-based theory to explain why the Vietnamese government employed the SOE model instead of traditional public procurement (TPP) or public private partnership (PPP). The case study shows the government chose to use an SOE to achieve dual policy goals: (1) accelerate the preparation and construction of five priority highways and (2) reduce fiscal pressure on the state budget. As a toll-funded SOE responsible for both the lifecycle delivery of highway infrastructure and debt repayment, VEC effectively economised transaction costs and maximised financial resources from both government and market sources, including a mix of international loans from major development institutions. The SOE model's unique advantages were also difficult to imitate by TPP and PPP. More specifically, the public ownership and not-for-profit mandate of the SOE model gave the government flexibility to effectively mitigate the adverse impacts of unforeseen project-specific risks and macroeconomic uncertainty on project performance. Taken together, these findings contribute to growing academic interest in the role of modern SOEs as a delivery model for transport infrastructure.
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