Privately-funded infrastructure projects in city stalled

Source: Pano feed

Van Nam


Construction of the underground parking lot project at Le Van Tam Park in HCMC’s District 1, for example, will be put on hold until August next year instead of getting off the ground last month, according to the project owner.


Speaking with the Daily on Wednesday, Le Tuan, general director of Investment and Development for Underground Space Corporation, informed that his company dared not carry out the project at a time of economic uncertainties.


Given dong depreciation and inflation, the total cost of the scheme has been pushed up to US$196 million, almost doubling the initial estimate of US$100 million, Tuan said.


Tuan’s company now is seeking approval from the city’s government to postpone the project’s construction by one more year until August, 2014, meaning the work can only be completed and put into use by 2017 when the economy is expected to recover.


The underground parking project at Le Van Tam Park is only one among 21 infrastructure works that the city’s government already made plans to start construction in 2012-2015. All of them are to be developed under the investment formats of build-transfer (BT), build-operate-transfer (BOT) and build-transfer-operate (BTO) with combined investment of roughly VND30.5 trillion.


Other projects in the city whose construction has been delayed include an underground parking area at Trong Dong Stage, an underground parking lot at Tao Dan Park, and Thu Thiem 2 Bridge among others.


In a report sent to the Ministry of Finance last Friday, the municipal government said that investment capital planned for the city’s infrastructure development was mainly used for site-clearance, resettlement and repayment of ODA loans, and the city cannot afford costly infrastructure projects.


The city therefore has mobilized investment capital by calling for investors under the BT, BOT and BTO formats and has achieved initial results in this regard.


However, according to the city, new BT, BOT and BTO projects can hardly be implemented the scarcity of cleared land citywide as many investors prefer the form of ‘land in exchange for infrastructure.’


Furthermore, it is impossible to install so many toll stations while the toll fee levels are no longer attractive to investors.


The city from now to 2020 will need an average of up to VND60-70 trillion annually to execute infrastructure projects and water supply and flood fighting schemes but its budget can only provide some VND10-12 trillion, or less than 20% compared to the actual demand.




Đăng ký: VietNam News