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Foreign help key to fixing transport

Update: November, 05/2010 - 09:20
Chui Bridge traffic circle, which connects National Highways 1 and 5. The nation has called for more co-operation with international organisations to improve the transport sector. — VNA/VNS Trong Duc

Chui Bridge traffic circle, which connects National Highways 1 and 5. The nation has called for more co-operation with international organisations to improve the transport sector. — VNA/VNS Trong Duc

HA NOI — The Government has called for closer co-operation with international organisations to improve its transport sector, one of the three key factors in the nation's socio-economic development.

Deputy Minister of Transport Truong Tan Vien was speaking at the third Viet Transport Exhibition and Conference 2010 titled Progressing Viet Nam's Land Transport Towards the Next Millennium held in Ha Noi yesterday.

Vien said the Government had placed emphasis on investment in the country's transport infrastructure and that this had achieved significant development of roads, sea traffic and aviation.

He said Viet Nam had created favourable conditions for those investing in transport as the infrastructure still did not match socio-economic growth.

He said the nation faced new challenges, such as traffic jams, and the need to complete its sea port and airport systems, adding that a developed transport infrastructure would help lower poverty and hunger.

The deputy minister said Viet Nam realised transport was one of the sectors that had to be improved under the next 10-year development plan. He said this would include solving traffic congestion and developing urban rail systems.

Vien said protection of the infrastructure system had not been achieved in Viet Nam, adding that the ministry had encouraged agencies to establish a road protection fund.

He said foreign direct investment had achieved some results with a model based on public-private ownership.

"The World Bank, JICA and the Asian Development Bank (ADB) have co-ordinated with Viet Nam on this," he said.

The director of the Ministry of Planning and Investment's Bidding Support Centre, Vu Quynh Le, said Viet Nam would need US$110.62 billion by 2020 for its transport infrastructure.

She said the model was not a new definition and had existed in Viet Nam in several forms, including business-operation-transfer (BOT), business-transfer-operation (BTO) and business-transfer (BT).

She said she believed opportunities to invest in the transport sector was huge.

The chairman of the Viet Nam Association of Foreign Invested Enterprises (VAFIE), Pham Cong Ha, said in the railway sector alone, there were many opportunities, including the supply of spare parts.

"Railroad car accessories have been imported from foreign countries," he said, adding that about 70 per cent were well over 30 years old.

"The Government encourages investment in the sector as FDI is seen as a key source for its development," he said.

Delegates at the conference were told about the opportunities in management and investment in Viet Nam created by the increasing number of land transport infrastructure projects. This had resulted in a huge demand for equipment, services and technology.

M N Sreehari, advisor to the state government of Karnatake in India, said the scientific design of roads, footpath and junctions could prevent delays, congestion and accidents.

Ian Van Wijk, head of transport development at the Australian Aurecon Company, said road deterioration from lack of maintenance had become a growing issue in many developing countries.

He said 35 per cent of rural roads in Viet Nam were in a poor condition, adding that spendings on road maintenance was a powerful way of creating jobs for local economies.

Traffic infrastruce

The Ministry of Transport has developed a list of 38 traffic infrastructure projects that require huge investments but analysts are not hopeful.

They comprise 18 expressways, three airports, 14 railway works, and three ports, and the ministry plans to seek the investments under build - operate - transfer, build - own - operate, and public - private partnership models.

Many are leftovers from the 2006 - 10 period after failing to attract investors.

Around VND793 trillion (US$40.6 billion) will be required for them.

Foreign investors have shown some interest – four corporate delegations from the UK, Italy, Germany and Australia have called on the ministry – but none have agreed to invest yet. They all wanted the Government to issue clear regulations for PPP.

Just three of the projects have managed to find investors, including the expansion of the Phap Van - Cau Gie Expressway in Ha Noi, at a cost of VND2.5 trillion ($12.8 million), with Japan's Nexco Central.

Others are the two implementing port projects with total investment of $100 million in southern coastal Ba Ria - Vung Tau Province and one port project planned to be undertaken in northern Hai Phong port city.

Long Thanh International Airport in Dong Nai Province with a capacity of 100 million passengers a year requires VND102 trillion ($5.2 billion).

There is not much optimism about getting the investments because of the large sums involved and the economic downturn. — VNS

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