Caution urged on transport projects

Permanent deputy chairman of the Viet Nam Bridge and Road Association Nguyen Ngoc Long spoke with Tuoi Tre (Youth) newspaper about transport infrastructure projects.

Why did you say authorities needed to be cautious when finishing infrastructure projects built under the BOT (build, operate, transfer) and BT (build, transfer) models?

We must pay greater attention to how these projects affect society. These projects have already had an impact on people because they have cleared massive portions of land and rebuilt old roads. You also can’t forget that once the projects are finished and toll stations erected, people will bemoan the new fees that they will have to pay. So, I’m just saying we need to be prudent with how we handle these cases.

What is the status of the BOT and BT projects?

Facts have shown that the nature of between 70 and 80 per cent of BOT or BT transport infrastructure projects has changed when they are completed. Some important projects now rely on State funds. There were BOT projects which must be changed because they failed to please the project’s investors and local authorities (or State management offices). A typical example is Binh Trieu Bridge, which was a BOT project but toll collections led to traffic jams which forced city authorities to buy back the project.

In my opinion, we need to summarise and assess the advantages and disadvantages that are produced by BOT and BT projects. There are project, which were initially proposed to be implemented under the BOT model, but they were reconfigured into Public-Private-Partnerships at the last minute. This is what happened with the Dau Giay-Phan Thiet Highway which is being built. Many international organisations want to provide private companies with loans, but the Government must provide the collateral.

You said we must carefully consider what projects will follow the BOT and BT models. Which factors do we need to consider carefully?

We must select sufficient and committed investors. We should not choose an investor who has a lot of money, but knows nothing about the transportation sector or infrastructure projects.

Secondly, policies related to the management of transportation infrastructure projects must be consistent. Thirdly, it is a must that projects are closely supervised during construction.

BOT projects have the ability to mobilise funds from investors and share risk with them rather than with the State. Hence, punishment must be meted out to BOT investors who failed to fulfil the contractual terms that they signed on to.

Is it true that some investors do not pay attention to BOT projects’ life-span after they retrieve principal and transfer the project to the State?

Due attention must be given to sustainable development when BOT projects are approved. Many BOT investors aim to secure project deals quickly, but do not pay the same attention to making sure the project develops properly. So by finding dedicated honest investors, the projects run smoothlier. – Vietnamnet

Tags: Vietnam transportation