Southern hub projects hit brick wall

Ho Chi Minh City build-transfer infrastructure projects have run into rough ground.

Though accommodating just three build-transfer (BT) infrastructure projects worth $532.3 million in total investment, the city faces myriad difficulties relative to giving land to BT project developers, according to Ministry of Planning and Investment.

Developer Petroleum Urban and Infrastructure Investment Joint Stock Company of beltway 2’s southern section in Binh Chanh district said the firm just received the land given in exchange for the BT project’s implementation in July 2011.

The land, however, is not clear and it was given late, delaying the beltway project and costing developer a big chunk of money for planning and land acquisition.

In case of four kilometre Ha Huy Giap road which links Thuan An town in southern Binh Duong province to Ho Chi Minh City’s District 12 developer Idico Infrastructure Development and Investment Joint Stock Company (IDI) said the city authorities agreed for the company to use two land plots in District 12 and land areas alongside the road to recoup capital.

However, it cost VND1.218 trillion ($58.84 million) for land acquisition, almost equal to the project’s total investment of VND1.231 trillion ($59.46 million).

According to Ho Chi Minh City Transport Department’s road construction division deputy head Nguyen Thanh Tuan, in light of project contracts land acquisition was the responsibility of competent state agencies.

The city authorities have assigned the people’s committees in districts where BT projects run through to take charge of clearing relevant land. However, land acquisition saw little progress, hindering the projects’ pace.

For instance, stagnant site clearance delayed the VND1.352 trillion ($65.3 million) Tham Luong-Ben Cat waste-water treatment plant for almost two years.

“Though the BT project was ratified in January 2010 and planned to come online within 2011, however, it is still in the land acquisition stage,” said Vo Van Canh, an investor consortium representative.

Another bottleneck in BT project implementation was the valuation issue, particularly in regard to the valuation of land areas without associated technical infrastructure.