Private investors fund city infrastructure

Monday, Dec 15, 2014 09:35

It has signed a BT contract with Dai Quang Minh, a local real estate joint stock company, for infrastructure projects in the new Thu Thiem urban area in District 2. — Photo antv

Compiled by Le Hung Vong

To raise funds for infrastructure works, HCM City has called for private investments in BT (build-transfer) projects.

It has signed a BT contract with Dai Quang Minh, a local real estate joint stock company, for infrastructure projects in the new Thu Thiem urban area in District 2.

They include four major roads connecting Thu Thiem with District 1, a central square, and a riverside park in the new urban area.

The total cost of these works is estimated at VND8.26 trillion (nearly US$390 million).

Dai Quang Minh will in return get 80ha of land in the Thu Thiem urban area on which it will build new urban areas with villas, multi-stores buildings, and five-star hotels.

More than 6,000 people are working at the site to turn it into a modern urban area, Tran Ba Duong, general director of Dai Quang Minh Co, told Tuoi Tre (Youth) newspaper.

He said his company has pumped in over VND7 trillion ($329 million) into these projects.

The city People's Committee is also considering a proposal by Vingroup to build new roads and upgrade sections of flood-prone roads in the city.

Under this BT project, Vingroup has proposed that Nguyen Huu Canh Street from Sai Gon Bridge in Binh Thanh District to District 1 should be upgraded, Ung Van Khiem Street (in Binh Thanh District) should be widened, and a new riverside road should be built from Sai Gon Bridge to Ton Duc Thang Street in District 1.

Vingroup said the new roads and upgrades are expected to help attract investment in infrastructure which has been delayed for several years.

According to the city Department of Planning and Investment, authorities have suggested that 26 transport infrastructure development projects should be implemented under under BT, BOT (build-operate-transfer) or BOT and BT forms at an estimated cost of over VND92 trillion ($4.32 billion).

Economist Nguyen Xuan Thanh said the BT investment form based on infrastructure-land exchange, aims to raise funding for works at a time when public funds are insufficient.

Lam Nguyen Khoi, deputy director of the Department of Planning and Investment, said the BT contract with Dai Quang Minh is expected to attract other investors to the new urban area.

This would help ease the financial problem plaguing the development of the new urban area in Thu Thiem, he added.

Small creature, big revenue

The Viet Nam Association of Seafood Exporters and Processors (VASEP) is optimistic about shrimp exports, which are expected to top $4 billion this year, a $1 billion rise from 2013.

A recent VASEP report said these figures indicate not only the huge growth in shrimp exports but also the leading role shrimp plays in the country's seafood exports.

Shrimp exports were worth $3 billion in the first nine months compared to $1.3 billion for tra fish. The figure equals Viet Nam's total exports of shrimp in 2013.

Nguyen Van Kich, general director of the Hau Giang-based Cafatex Group, said the recent shrimp disease outbreak in Thailand is one of the main causes for the sharp increase in exports from Viet Nam.

Higher export prices have also forced the demand to purchase shrimp for export from local shrimp processing companies up.

Vo Hong Ngan, owner of a shrimp breeding farm in Vinh Trach Dong Commune of Bac Lieu Province, said shrimp prices are expected to go up by the end of 2014 and the beginning of 2015. He explained that the areas under shrimp breeding is reduced, resulting in lower shrimp production and higher shrimp prices in the local market.

However, according to Cafatex General Director Kich, shrimp prices in the local market would not increase sharply by the end of the year because orders from buyers have gone down. He added orders (from foreign buyers) have slumped in late November and December of this year.

According to Sai Gon Tiep Thi (Sai Gon Marketing) newspaper, shrimp prices have been going down since the US imposed the anti-dumping tax against Viet Nam's shirmp earlier this year.

Seeking homes

Despite all the efforts by the Government and HCM City and policies to force their prices down, homes remain out of reach for many low-income families in the city.

Since 2003 the city has been issuing policies and regulations to enable low-income people to buy houses, including taxation and financial support for developers building such housing.

The city authorities have also issued regulations requiring a number of projects to earmark at least 10 per cent of land or 20 per cent of houses for rent for low-income families.

In the last decade the HCM City House Development Fund has provided loans of some VND600 billion (over $28 million) to nearly 2,000 poor families. It has lent nearly VND330 billion ($15.49 million) for building low-income tenements for resettlement on Ngo Gia Tu, Nguyen Kim, 109 Nguyen Bieu, 481 Ben Ba Dinh, and Nguyen Van Luong Streets and An Suong Area.

Last year it provided loans of VND164 billion ($7.73 billion) and in 2014 it is estimated at VND172 billion ($8.11 billion).

But the amounts are chicken feed compared to demand. According to the HCM City Institute for Research and Development, around 100,000 HCM City inhabitants lack accommodation.

Dao Thi Huong Lan, director of the city Department of Finance and chairwoman of the HCM City House Development Fund, said there is a huge demand for low-income housing but supply is meagre.

The city targets construction of 675,000sq.m of housing annually and in 2015 about 17,500 apartments would be sold or leased to low-income residents.

In addition, HCM City also plans to build 800,000sq.m of new houses for workers, aiming to provide accommodations to 93,000 labourers and their families.

"To create favourable conditions for low-income residents to get bank loans for building houses, we have proposed an increase in loans as well as lower interest rates," Lan said.

According to Le Manh Ha, the chief of the construction ministry's House and Property Market Management, many of the regulations on social housing are inadequate.

"The procedures to get loans for buying houses are difficult while the services are inadequate," he said. —VNS

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