Private investors fund number of road projects

Nguyen Hoang, head of the ministry's Planning and Investment Department, said the projects include expansion of the National Highway No 1 and National Highway No 14.— File Photo

HCM CITY (Biz Hub)—The Ministry of Transport raised nearly VND90 trillion (US$4.3 billion) from private investors to build major transport infrastructure projects in 2011-13, officials have said.

Nguyen Hoang, head of the ministry's Planning and Investment Department, said the projects include expansion of the National Highway No 1 and National Highway No 14.

Private investment has been given under several financial/management models, including build – operate and transfer (BOT), build and transfer (BT) and public private partnership (PPP).

Investment for the BOT projects to expand National Highway No 1 totalled VND43.7 trillion ($2.08 billion).

With private investment capital during this period, many transport projects were built according to schedule or completed early, Hoang said.

Capital was raised from many sources, including from non-State sectors, for National Highway No 1 and No 14, according to Dinh La Thang, Minister of Transport. This has helped reduce the burden on the State budget, he said.

The country needs VND480 trillion ($22.86 billion) for the 2011-15 period and VND730 trillion ($34.76 billion) for 2016-20 to build roads and bridges, according to Resolution 13 NQ/TW issued in January last year.

State funds for the transport sector fell from more than 40 per cent of gross domestic product (GDP) in 2010 to under 30 per cent this year. The Ministry of Transport has created many preferential policies to call on private investment since 2011.

Tran Xuan Sanh, head of the ministry's Transport Engineering Construction and Quality Management Bureau, said the transport sector should create favourable conditions to attract more private investment, even though it had risen greatly in recent years.

But experts said that was made more difficult because of current policies and regulations about the period to recoup investment capital for investors. They said the transport sector should set a minimum investment level for potential investors interested in projects.

Legal rules related to these kinds of investments have not been clear and lack guiding documents, leaving investors feeling insecure, they said. — VNS