The HCMC government has decided to halt all build-transfer (BT) projects that are still under negotiation pending new policies aimed at enhancing the effectiveness of such projects by maximizing the value of State land.
A section of Pham Van Dong Avenue, which is developed by a South Korean group in the BT format –
City chairman Nguyen Thanh Phong announced this change at a meeting on October 30 on the local socio-economic situation in the year to October.
The municipal government will organize a seminar on the implementation of BT projects in order to assess their investment efficiency, Phong said. Most BT projects in the city and elsewhere in the country have been implemented with capital from investors who are then allocated land in exchange for such infrastructure facilities.
Scientists and other experts at the seminar this week will review the previous BT projects. Then, the city government will gather these views to adopt a new policy on BT projects across the city.
BT projects under negotiation will be put on hold, waiting for a new and transparent policy. Competent agencies will have to make this known to investors, said the city chairman.
Su Ngoc Anh, director of the HCMC Department of Planning and Investment, said the city government has spent about VND1,000 trillion, or some US$44 billion, into infrastructure projects in the last five years, with a sizeable amount coming from BT investors.
The city is expected to spend an additional VND500 trillion to develop infrastructure in coming years. However, the city budget can meet around 30% of that amount at best, so BT projects are still needed.
As many as 18 BT and build-operate-transfer (BOT) infrastructure projects that are underway in the city requires a total of roughly VND59,000 billion. Currently, around 130 investors have signed up for either BT or BOT projects worth some VND350,000 billion.
Anh added investment steps like project investments and land bidding will be closely screened under the new policy.
Owing to BT and BOT projects, HCMC has been able to develop many important infrastructure projects like Truong Son Street, Tan Son Nhat-Binh Loi road, and Phu My and Saigon 2 bridges.
Experts said at a recent event that three important steps, namely project proposal, construction process, and cost management, should be paid special attention to in the process of carrying out BT and BOT projects.
Land scarcer for BT investors in HCMC
Land in HCMC is becoming scarcer for those BT investors who want to invest in infrastructure projects and receive land in return, according to the municipal government.
HCMC chairman Nguyen Thanh Phong said many land lots in the downtown area and Thu Thiem Peninsula have been exchanged for BT projects. Therefore, the city is running out of land in prime locations for BT investors, and investors should consider land in outlying districts.
According to the city’s vice chairman Le Van Khoa, priority will be given to important projects to avoid the situation where so many investors ask for land in primary locations.
Data of the HCMC Department of Planning and Investment shows that the city has had 23 projects developed in the BT format, including 17 transport infrastructure projects, with total investment capital of more than VND71 trillion (more than US$3.1 billion).
Besides, there are 130 BT projects under preparation with total investment capital estimated at more than VND395 trillion. Most of them are transport infrastructure projects.
Some projects being developed in the BT format in HCMC include four main roads of Thu Thiem Urban Area worth a total of VND12 trillion, a flood control project costing VND10 trillion, and Thu Thiem 2 Bridge project worth VND3.1 trillion.
In a document sent to the Ministry of Planning and Investment in September, the city said it has plans to exchange 16 lots of land for Thu Thiem 4 Bridge connecting districts 7 and 2 that requires an investment of VND5.2 trillion.
Other projects that would be carried out in the BT format in HCMC include Ring Road No.2’s section from Pham Van Dong Avenue to Go Dua Intersection and North–South Highway’s 7.5-kilometer section from Nguyen Van Linh Parkway to Ba Chiem Bridge Intersection.
Many BT projects have been opened to traffic in the city, significantly helping reduce traffic congestion. Some of them are Saigon 2 Bridge, Pham Van Dong Avenue, and approach roads to Phu My Bridge.
Bui Xuan Cuong, director of the HCMC Department of Transport, said the department will review BT transport projects in the city and organize a conference on BT investment early next month.
SGT