A section of Noi Bai-Lao Cai Expressway. Many shortcomings in State policies affect development of BOT projects, experts say (Source: VNA) Hanoi (VNA) - Amidst the currentfinancial constraints, the continuing mobilisation of financial resources fromnon-state sectors for transport infrastructure development is necessary,according to experts.
In recent years, the Government and Ministry ofTransport have made positive and dynamic changes to create a clear andtransparent legal framework for investment projects, under thepublic-private-partnership (PPP) programme. However, shortcomings and limitationsstill remain, said Tran Du Lich, a member of the Prime Minister’s EconomicAdvisory Group.
A supervisory report of the Standing Committee ofthe National Assembly has indicated that the legal basis for investment in PPPand Build-Operate-Transfer (BOT) contracts was not complete.
It also showed ineffective coordination inremoving difficulties in the execution process, and weakness of State agenciesin management of BOT projects.
The control over the construction investmentprocess to exploit and use was not tight enough, the report said.
State agencies need to conduct research, as wellas receive practical experience through projects, in order to quickly completepolicies and regulations to remove "bottlenecks" for BOT projects, Lichsaid.
According to Dr Tran Chung, former head of theConstruction Quality Control Department under the MoT, besides the neededprofessionalism, financial capacity and strict law enforcement of investors,one of the big bottlenecks to be first solved was the need to quickly completeregulations, policies and mechanisms for PPP to create momentum for enterprisesoperating in this field to develop, bringing high socio-economic benefits.
Analyzing these limitations, he said that thedecrees and circulars stipulated in the construction law were no longersuitable to the reality, while the regulations on PPP projects have not beencompleted yet. Therefore, the application of regulations and policies for PPPprojects over the past years encountered many obstacles.
Meanwhile, the monitoring mechanism, as well asthe sanction of both state authorities and investors, was not tight enough orfair, he said.
Under the PPP mode, state management agencies andinvestors have equal rights and interests that are issued in economic contracts.However, there were still regulations that force investors to adjust and changetheir projects in accordance with government documents and regulations,affecting the finances, progress and causing losses to investors, he added.
Discussing this situation, Luu Xuan Thuy, deputygeneral director of Deo Ca Investment Joint Stock Company, also said thatbesides the transparency of the legal framework and the State agencies’ strictmanagement, many regulations and documents from the State agencies still existedthat were not proper in today’s reality.
And the amendments to those regulations werestill very slow, causing many difficulties for the implementation of projects,resulting in the impact on the progress of projects, financial losses, as wellas the interests of enterprises.
Head of the Legal Department of the VietnamChamber of Commerce and Industry (VCCI) Dau Anh Tuan said to attract capitalinto transport BOT projects, state agencies needed to come up with a scientificand accurate calculation of investments needed to ensure harmony between theState’s interests, investors and users.
The Ministry of Transport (MoT) has reported thatit needs very large amounts of capital, over 44.4 billion USD, for transportinfrastructure development in the 2016-20 period, though the budget allocationsby the central Government are insignificant.
So mobilisation of financial resources fromnon-state sectors for transport infrastructure development was needed becausePPP projects usually require a large amount of investment and a long loanperiod, especially for BOT transport projects, Dr Tran Chung said.
However, the financial capacity of many localcredit units was limited, affecting the process of raising capital for BOTprojects.
According to Chung, it was necessary to put inplace specific mechanisms and policies to attract all domestic and foreignfinancial resources and needed solutions to promote the development of capitalmarkets to mobilize long-term capital for PPP projects.-VNA
VNA
