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MoT eyes private funding for projects

Update: February, 14/2014 - 08:14
Workers on a construction site to extend a stretch of National Highway No 1A in the central province of Ha Tinh. — VNA/VNS Photo Trong Dat
HCM CITY (VNS) — With public spending on infrastructure development proving insufficient, the Ministry of Transport is seeking to attract private investment.

According to the ministry's Planning and Investment Department, transport infrastructure is not well developed, affecting the country's socio-economic development.

In big cities, incompetent infrastructure planning and slow site clearance are blamed for creating many traffic bottlenecks.

The transport sector faces a shortage of capital for infrastructure development in 2014–20 estimated at VND960 trillion (about US$45.7 billion).

Capital from the State budget is estimated at VND70 trillion and VND110 trillion ($3.3 billion-$5.2 billion) from the Government's bonds, plus VND100 trillion ($4.7 billion) from foreign investment sources. Thus, an additional investment of VND680 trillion ($32.3 billion) is needed for infrastructure development.

In this scenario, private investment becomes important.

Le Anh Tuan, head of the ministry's PPP (Private-Public Partnership) projects management unit, said the ministry has rolled out the "red carpet" to private investors for a number of projects in BOT (build-operate-transfer), BT (build-transfer), and PPP modes to be completed by 2016.

According to Nguyen Hoang, head of the ministry's Planning and Investment Department, in 2011-13, the ministry had mobilised nearly VND90 trillion ($4.2 billion) from private sources for major transport projects. The figure included VND43.7 trillion ($2.1 billion) for BOT projects to expand National Highway No 1A, nearly VND6 trillion ($286 million) for BOT projects to expand National Highway No 14, and nearly VND40 trillion ($1.9 billion) for other projects.

The ministry will continue to seek private investment for aviation, rail, and waterway projects and hold auctions for the purpose. — VNS

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