(Construction) – The Ministry of Transport has set a target from now to 2030 to build 5.000km of expressways. To achieve this target, there is no choice but to strengthen cooperation between the State and the private sector, in which BOT form is very important. However, this form has showed signs of slowing down because the BOT’s economic problem is not clear, leading to many risks for investors. To improve this essential investment environment, Deo Ca Group (DCG) has proposed specific solutions.

The person who introduced the new concept of the three letters P in the public-private partnership contract type is Mr. Ho Minh Hoang – Chairman of DCG. Those letters P, including “P – the State budget capital”, “P – the investor equity” and “P – the mobilized capital”, may not be completely correct with their concept translated from English (Public – Private Partnerships) but they are suitable for the construction investment context in Vietnam today.

The first letter P represents the State budget capital, which shows the political determination of local leaders when using local budget for land clearance and partial support of the construction and using the central budget to participate in support of the project construction.

The second one represents the investor equity, which is the choice of investors with experience, financial capacity and management capacity.

The third one represents the mobilized capital, which is the capital raising from other investors in many fields through issuing bonds and signing BBC contracts.

By assigning the local authority as the competent authority to proactively propose and clear the land, control the material source and mobilize capital from other investors in many fields such as real estate, commercial services, logistics, etc., the problem of investment and payback for the project will become easier.

Mr. Nguyen Van Hai, DCG’s General Director, said: “2021 – 2030 is the period when the transport infrastructure will strongly develop because the Government and the National Assembly pay great attention to it (such as inter – regional works, the North – South highways in the East). The “3 letters P” model is the key for us to implement in the coming time.

With experience in successful investment in many large BOT projects such as: Deo Ca Tunnel, Hai Van 2 Tunnel, Bac Giang – Lang Son Expressway, Trung Luong – My Thuan Expressway, … DCG affirmed that PPP method is optimal for transport infrastructure investment in Vietnam.

However, the current PPP investment environment has many shortcomings that put many investors at risk. They stem from the fact that State management agencies do not always fulfill their commitments to investors as they invite. For example, the State budget capital amount of 1.180 billion VND in the Deo Ca Tunnel project has not been disbursed; the toll collection at La Son – Tuy Loan toll station according to the signed contract has not been resolved.

When investors face difficulties, the State agencies only stop at considering the shortcomings of the capital financing mechanism of banks. Mr. Hai said that Bac Giang – Lang Son Expressway, a component project of the North – South Expressway, was not supported by the State budget like others, although the investor had to reduce one toll station. That leads to a decrease in revenue compared to the signed financial plan of the project.

The PPP Law has come into force. However, in order to successfully implement PPP projects without dêpndence on credit sources , in addition to issuing bonds and signing BBC contracts as prescribed by the law, the DCG’s representative said that the localities with the advantage of real estate potential need actively mobilizing capital from investors with relevant interests. For example, People’s Committee of Lam Dong province has recently mobilized for the Tan Phu – Bao Loc Expressway (the expected capital amount is 8.500 billion VND, but in a short time, nearly 20.000 billion VND has been mobilized). That’s one way to do it. Basically, it still requires a dedicated investment fund for the PPP investment method.

By THANH XUÂN – PHƯƠNG MAI

Source: https://baoxaydung.com.vn/tap-doan-deo-ca-hien-ke-thuc-day-phat-trien-dau-tu-ha-tang-giao-thong-305940.html