HCMC suspends all BT projects under negotiation

By Trung Ngoc - Oct 31, 2017 | 12:17 PM GMT+7

TheLEADERThe implementation of BT projects must be transparent, compliant with the law, and use the State’s resources efficiently, in addition to creating favorable conditions for investors, according to a high-profile official.

HCMC suspends all BT projects under negotiation
Thu Thiem 2 bridge is implemented under BT contract. Photo: thesaigontimes.vn

Speaking at a meeting in Ho Chi Minh City (HCMC) on October 30, Nguyen Thanh Phong, Chairman of HCMC People’s Committee, announced there will be a workshop intended to evaluate the implementation and management of build and transfer (BT) projects later this week.

Phong added that “BT projects that are under negotiation must be suspended, and await new procedures in order to facilitate the management and ensure the interests of investors in the future. However, BT projects that have been approved by the Government are continued.”

In the context of HCMC’s limited budget, BT projects have been considered as an effective solution for transportation and infrastructure development. The common way is that land is exchanged for infrastructure projects investors have built.

According to experts, the BT project, if properly implemented, is also an effective way to attract private investment in infrastructure, especially when the budget is limited and the local land fund is unused; However, this form is also susceptible to distortion and dislocation due to lack of transparency, because of group benefit and the tremendous profitability from land lots with prime locations.

Numerous infrastructure and transport projects in HCMC were executed under BT contracts. Many of these had investment capital of trillions of VND. Examples include the project addressing tidal flooding in Ho Chi Minh City (the first phase) and also taking into account climate change factors with a total investment of nearly VND10 trillion (approximately US$450 million), Thu Thiem 2 bridge with investment capital of VND3,100 billion (roughly US$136,69 million)…