Investors are no longer interested in BT projects

Many important infrastructure projects with huge capital have been implemented in HCMC thanks to the ‘exchange of land for infrastructure’ initiative. 

Nguyen Van Linh Boulevard and Pham Van Dong Road are two large works in HCMC implemented under the BT mode. 

According to the HCMC Planning & Investment Department, 130 more projects with total investment capital of VND395 trillion will be implemented under the BT mode, accounting for 73 percent of total PPP (public/private partnership) projects.

The avenue along Sai Gon River is one of the most noticeable ‘exchange of land for infrastructure’ projects. Tuan Chau Group, the investor, wants a land area of 12,000 hectares, or 5 percent of the total land fund of HCMC, in exchange for project implementation.

Sources said the land plots Tuan Chau wants are mostly situated in Cu Chi district and others are located along Provincial Route No 7, in Binh Thanh, 12 and Hoc Mon districts. 

Another large project is the anti-flood work implemented by Trung Nam Group, capitalized at VND10 trillion. At least 50 percent of the construction workload has been fulfilled and the project is expected to be completed by 2018.

Asked about the land area the city had promised, a representative of Trung Nam said the group had eyed several land plots, but the land assignment has yet to be done. 

In 2015, Trung Nam proposed to assign two land plots in district 7 (5 hectares in total), including a 1.8 hectare land plot in the new urban area in the south of the city, and a 3.3 hectare land on Dao Tri street along Sai Gon River.

However, as the land plots had legal problems, the investor then eyed three other land plots. According to the city’s planning & investment department, the value of the total land plots has yet to reach 15 percent of the project’s total estimates.

As the investor which built the Tham Luong waste water treatment plant in district 12 under the BT mode,  Phu Dien Investment, Construction & Trade JSC now does not want to continue applying the BT mode when building a sewer system, a component project of the waste treatment plant project.

The company has suggested another investment mode, under which it will build the sewer system with its own money and take back the investment capital by collecting fees for waste water treatment, VND1,500 per cubic meter, for 15-20 years.

A real estate expert said investors are no longer interested in the BT mode because the land plots in advantageous positions are running out.

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Thanh Lich