Infrastructure projects now resume operation

The Ben Thanh – Suoi Tien subway station is expected to resume operation soon as approval has been received to raise capital from VND17 trillion to VND47.3 trillion. The subway station No 2 (Ben Thanh – Tham Luong) has received permission to increase capital by twofold to VND47.9 trillion.

Prior to that, the subway station No 1 project stalled in 2018 after 62 percent of work was implemented because of problems in payment methods to Japanese contractors.

A senior official of the HCMC Transport Department said if the project is sped up, the first subway station in the south may be completed by 2020, which would have a positive impact in the eastern part of the city.

In addition, the suburban districts 9, 12 and Hoc Mon are expected to see the kick-off of the Belt Road 3 project. The Ministry of Transport has submitted to the PM an investment plan of the first phase of the project. 

The road section, to go through HCMC, has investment capital of VND20 trillion. Of this, HCMC will spend VND2.9 trillion from its budget to accelerate site clearance.

Several other transport projects have warmed up again, including the closing ?of Belt Road No 2 (from Phu Huu to Go Dua), and a flood prevention project, capitalized at VND10 trillion in the southern part of HCMC.
 
State agencies emphasized the important role of infrastructure projects in creating an attractive investment environment. 

JLL listed Vietnam among the countries which is attaching importance to developing infrastructure with many huge projects ratified.

These include a project on building 2,000 kilometers of new highways, subway projects in Hanoi and HCMC and airport projects.

Many investors and real estate developers are committed to investing in the market with a high growth rate, JLL commented.

Capital

Le Hoang Chau, chair of the HCMC Real Estate Association, said that funding infrastructure projects is one of the biggest challenges with capital needed of up to $22 billion. Of this, only one third is funded by the state and local budgets, while the remaining $14.6 billion must be mobilized from other sources.

Meanwhile, the long arguments about BT and BOT projects, plus the changing payment methods, have partially made the private capital flow shrink. In 2018, no BT or BOT project started in Vietnam.

However, the bottlenecks are being solved. The PM earlier this year released Resolution 160 allowing a number of BT projects signed prior to January 1, 2018 to follow the payment method with public assets.

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