Interests of State, Business and Community Balanced

In an interview granted to the Vietnam Business Forum prior to the Prime Minister’s Meeting with Businesses 2016, VIDIFI President Dao Van Chien said that in recent years, the build - operate - transfer (BOT) investment form has played a very important role in mobilising social resources for infrastructure system construction, especially transportation infrastructure, against the backdrop of State budget shortage. Around the world, the BOT investment form is currently very popular as it helps fill State investment shortages on the one hand and has strict supervision of many stakeholders on the other, including investors, State agencies, banks and users. BOT also helps restrict the rise in public debt while mobilising unemployed capital from the public via credit institutions. This is also a solution to improve productivity and lower transport costs for enterprises.

 

The 105-km Hanoi - Haiphong Expressway, which cost VND45,487 billion in total, was opened to traffic in early December 2015, helping modernise transport infrastructure in the north of Vietnam. The 6-lane highway with two emergency lanes allows vehicles to run at a maximum speed of 120 kmph, hence shorting the travel time between Hanoi and Haiphong from 2.5 hours to less than 1.5 hours. Invested by VIDIFI, the project has provided more favourable conditions for socioeconomic development in the northern key economic zone. VIDIFI was praised by the Prime Minister and the State Project Assessment Council for its efforts to carry out the project. On January 18, 2016, the Hanoi - Haiphong Expressway was honourably named the “Work in commemoration of the 12^th National Congress of the Communist Party of Vietnam”. According to VIDIFI President Dao Van Chien, the success of the Hanoi - Haiphong Expressway will be the premise and motivation for VIDIFI to invest in new transport infrastructure projects in the coming time.

 

 

Remarking on the BOT investment form for infrastructure in Vietnam today, he said that the shift from entirely State-funded investment into BOT investment is essential in the current context of our country, but many investors are still reluctant to invest in BOT projects because existing mechanisms and policies are not really attractive. Currently, investors experience certain difficulties. For example, they have to advance money for site clearance while the repayment by the State Budget takes too much time, resulting in “trapped” capital and interest rate burdens for “trapped” finance. For its case, VIDIFI had to advance money for site clearance of Hanoi - Haiphong Expressway, but it has not been refunded for that work. Therefore, we hope the Government will have medium-term budget arrangement plans to repay enterprises.

 

At present, most BOT investors are relying on bank loans while transport projects require huge investment value and long payback time, let alone risks of interest rates and exchange rates. Therefore, the Government should have consistent and transparent policies and mechanisms as well as special incentives to provide favourable conditions for enterprises to carry out their projects and arrange investment capital. The engagement of more investors will help create a fair, competitive investment environment to enhance business performance and sustainable development of enterprises while ensuring the interests of the State, the business and the community.