Monday, November 26, 2007

Vietnam has infrastructure need of $53 billion USD

Viet Nam must strive for constructive development

HA NOI — The Deputy Minister of Planning and Investment, Nguyen Bich Dat said that Viet Nam must continue to pursue the development of comprehensive infrastructure at an international construction trade fair, Con-Build, on Wednesday.

"Analysis of the National Project List, which was released in September to attract foreign investment, further highlights this country’s need for more infrastructure systems," Dat said.

According to the list, as many as 109 of 163 planned projects, costing US$53 billion were planned for large-scale public systems, services and facilities.

Huge projects with investment capital of $5-6 billion each include the Nghi Son Oil Refinery Complex in Thanh Hoa, Oil Refinery No 3 in Ba Ria-Vung Tau and Long Thanh International Airport in Dong Nai.

A number of port, petrochemistry and railway projects, worth $1-2 billion each are also in the pipelines.

To maintain economic growth over 8 per cent, spending on infrastructure must increase by about 11-12 per cent of GDP, instead of the current 9-10 per cent, the deputy minister said.

"The economy seems to be outgrowing its infrastructure, particularly roading, telecommunications and electricity systems," he said.

To counter the negative effects of such rapid growth the Government has moved to mobilise [investment] sources. However, funds drawn from the State budget and ODA (Official Development Assistance) are insufficient to satisfy identified shortcomings.

Government officials are looking for additional capital of about $2.5 billion a year from the private sector due to budget restrictions and the approaching deadlines of preferential financing. It is hoped that increased private investment, together with co-operation with foreign enterprises will meet the requirements of the nation’s limited infrastructure.

Private investors have funded around 60 BOT (Build Operate Transfer) projects worth $44 trillion; 43 of which are traffic works. To the detriment of infrastructure development such investors have overlooked electricity, water, post and telecommunications projects.

It has been suggested that the slow clearing of sites for construction and ineffective Government planning have further stalled the development of adequate infrastructure systems. — VNS