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More support for transport infrastructure investment

by PV08 September 2015 Last updated at 11:00 AM

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More support for transport infrastructure investment
(Photo: Workplaceinsight)
VTV.vn - Which projects require capital and how to raise capital are two key questions discussed at a recent conference on transport infrastructure development in Hanoi.

Public investment in Vietnam was compared to a meal by Fulbright scholars. If each person is to pay for their food, he or she will order food that they can afford. But if the bill is split evenly, everyone will order the most expensive food. This mentality is similar to equal allocation of public budget to regions. Regions will ask for more than the real amount. This will lead to shortages, including for transport.

The Ministry of Transport has called for about 13.5 billion USD in transport infrastructure investment. This is considered an important issue because the budget for the 2016-2020 period can only meet about 28% of the cost for transport infrastructure.

The Ministry of Transport are also preparing guidelines for the implementation of decrees to promote public private partnership forms of investment. When the legal framework is completed, the ministry is eyeing to attract another 13.5 billion USD in transport infrastructure investment.

According to experts, private sector involvement in public infrastructure is necessary. However, the balance of investment is important because 85% of capital for private sector involvement in public infrastructure are actually bank loans anyway, which charge higher interest than can be sourced by government.