BOT, BT (Build - Transfer) are two methods in PPP in new form. They are considered the dual force to attract investment.
Transportation Investment – One of many fields that cost a lot.
Photo: Road under construction in Nhon Trach district.
The expansion of PPP
Mr. Le Quang Binh - Deputy Director of Ministry of Transportation (MT) considered PPP a stronger investment attraction than BOT. He explained: “With BOT, Investor shall give up all the construction fee and get payback from tolls then. And with PPP, investors still follow BOT but in additional, get capital support from the government and still get payback from tolls then”. It is the capital support from the government that make the investment attraction more attractive.
Mr. Tran Nhu Hoang – Chairman of Board of Director of Cuong Thuan IDICO Development Investment Corporation JSC - A big Company in Transportation Investment, also admitted that PPP was getting a lot of attention from many investors.
Chairman Tran Nhu Hoang said that the 30% capital from the government is a huge support for the investors to implement the project, especially the clearance and compensation.
This method of attraction may result in 80 new PPP investment projects from Ministry of Transportation by 2016. The total investment capital was up to 223 trillion VND, 33/80 projects were completed and are in use, 47 are in progress. Currently, the PPP department of MT is considering 60 more projects including 42 road projects (10 of which are the key expressway projects); 7 airway projects; 6 domestic waterway projects, 5 railway projects and 2. According to the plan, investors shall be chosen and 23 projects shall be invested and implemented with the total capital of 40 trillion VND in 2016.
Key project in Dong Nai
According to Mr. Le Quang Binh, PPP is mainly for projects that demand larger capital. Investors use BOT mostly for under 1 trillion VND projects without government support and PPP is for over 1 trillion VND projects”. Said Mr Le Quang Binh. In Dong Nai province, the inter-port road project in Nhon Trach district is registered to be the provincial key PPP project. Mr. Vo Tan Duc – Deputy Chairman of Nhon Trach People’s Committee – said that, in order for the port to develop, the inter-port road really need to be constructed soon. This project needs a large investment, which is up to 6 trillion VND.
According to the plan, the inter-port road is 15km long, through Dai Phuoc, Phu Huu, Phu Dong, Phuoc Khanh and Vinh Thanh commune. It is nearly 100m wide, including 61m wide main road, two 8m wide frontage roads on the sides and 3m wide pavement. The project is planned into 3 phases: Phase 1 to construct the first 4 lanes, phase 2 to construct the next 4 lanes and Phase 3 to construct the last 4 lanes. Total capital of 6.355 trillion VND, in which, nearly 3 trillion VND is for phase 1. The project is expected to finish the expertise and permission from Ministries and Departments in July and to be approved in the end of quarter III 2016 and ready for bidding according to the law. This road will bridge 15 ports which have been invested to be in South West seaport (group 5). This project is full of expectation to attract large PPP investment for transportation.
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