Some component projects of the North-South Expressway did not attract bidders. (Photo: plo.vn) Hanoi (VNS/VNA) - A proper mechanism is needed to attractinvestors to infrastructure projects implemented following the public-privatepartnership (PPP) model, experts have said.
In the context of a tight State budget, PPP projects are a model which helpedattract private investment in infrastructure projects. However, investorsrecently showed hesitancy in participating in PPP projects.
In early October, the Ministry of Transport opened bidding for five componentprojects of the North-South expressway.
However, the road project from Nghi Son to Dien Chau did not attract anybidders. The project from national highway No 45 to Nghi Son attracted onlyone, but the bidding was cancelled because the bidder did not meet technicalrequirements, according to the Ministry of Transport.
The other three component projects – Dien Chau – Bai Vot, Nha Trang – Cam Lam,Cam Lam – Vinh Hao – were underbid evaluation.
The Ministry of Transport said that it was necessary to develop a mechanismwhich would harmonise the benefits of the Government, the investors and theusers as well as solutions to solve difficulties in existingbuild-operate-transfer (BOT) projects to create favourable conditions and trustto attract investors and credit institutions in PPP projects.
According to expert Nguyen Huu Duc, the failure in attracting investors intwo-component projects of the North-South Expressway demonstrated that PPPprojects were not attractive enough to investors.
Duc said converting these projects into fully-public invested forms neededcareful consideration in term of urgency, importance, economic efficiency,finance and implementation mechanisms, in the context of a tight State budget.
Bui Quang Thai, Deputy Director of the PPP Department under the Ministry ofTransport, said that the Government would report to the National AssemblyStanding Committee for consideration in case PPP projects failed to selectinvestors.
Regarding credit for North-South Expressway projects, at a recent workingsession between the Ministry of Transport and commercial banks, Tran Long,deputy director general of the Commercial Joint Stock Bank for Investment andDevelopment of Vietnam (BIDV) said that BIDV had so far provided credit for 43BOT transportation projects with a total outstanding loan of 30 trillion VND (1.3billion USD).
However, lenders were facing difficulties as many projects must restructuretheir debts and some turned into bad debts.
Because the North-South Expressway was a key national project, BIDV was willingto provide credit if the projects could guarantee investment efficiency andmeet requirements of the lender and the laws, Long said.
He stressed the most important point was that the Ministry of Transport musttackle problems in existing BOT projects so that banks could recover debts andconsider new loans.
Chairman of the Vietnam Association of Road Systems Investors Tran Chung saidthat PPP projects were experiencing too many problems which must be resolvedearly to attract investors.
According to Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce andIndustry, three things must be tackled for PPP projects, including ensuring thefairness between the State agencies and investors, solutions to deal withchanges in mechanisms and policies which might affect PPP projects’ finance andmechanisms to share risks between the State agencies and investors.
Tran Dinh Thien, member of the Prime Minister’s advisory group, said that PPPwas giving significant opportunities for Vietnamese companies. However, theGovernment should also create a proper mechanism to attract investors./.
VNA
