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Gov’t moves to stimulate FDI flow into transport
Prime Minister Nguyen Tan Dung has asked the Ministry of Transport to accelerate preparations for several major road projects in order to encourage the flow of foreign direct investment (FDI) into this field.
Under a PM official dispatch, the ministry is permitted to assign consultancy contractors for projects to build belt roads No. 3 and 4 in Ho Chi Minh City and expressways to link Quang Ngai-Quy Nhon, Nha Trang-Phan Thiet, and Dau Giay-Lien Khuong in the south.
The ministry has also been given the go-ahead to put into place a number of projects to facilitate investment in the construction of Ninh Binh-Nghi Son, Nghi Son-Bai Vot and Dau Giay-Phan Thiet highways.
Tong Quoc Dat, Deputy Director of the Department for Infrastructure and Urban Development under the Ministry of Planning and Investment (MPI), said that Vietnam requires 118 trillion VND (7.4 billion USD) each year to develop transport infrastructure.
However, the annual amount of capital invested in this area now stands at between 2-3 billion USD, most of which is sourced from the state budget and government bonds, Dat said.
According to the MPI’s Foreign Investment Department, the transport sector attracted just 45.6 million USD in FDI in the first eight months of this year, accounting for 1 percent of the country’s total registered amount.
This poor result is attributed to the government’s failure to adopt attractive incentives for foreign investors in this field. Other shortcomings, including complicated investment procedures and tardy project site clearance, are also hindering the influx of foreign investment.
In that context, many local businesses have joined hands with the State to develop transport facilities. Statistics released by the MPI show that the transport sector accounts for 95 percent of the 80 infrastructure projects jointly carried out by the State and businesses under the form of BOT (build-operate-transfer), with a combined capital of 90 trillion VND (5.5 billion USD).
Industry experts said that, to attract more investment from both at home and abroad, Vietnam should now focus on building a legal framework in accordance with international practices and its own conditions, in addition to a proper supporting policy.
VNA
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