An anti-flooding project in HCMC – PHOTO: LE ANH

Most privately invested anti-flooding projects in the city have been developed under the Build-Transfer (BOT) format. However, the city’s limited funds for the format and shortcomings in payments have made this format less attractive for private investors.

Vu Van Diep, director of the Technical Infrastructure Management Center under the Department of Construction, said at a press conference on June 9 that HCMC has spent more than VND25 trillion on anti-flooding projects over the past five years but the city still has 22 flood-prone areas. Moreover, even though the rainy season has just begun, several streets in HCMC are already flooded.

The BOT format is infeasible for anti-flooding projects because it’s hard for investors to collect anti-flooding fees and such projects would create controversies in society.

Similar to anti-flooding projects, waterway projects too are struggling to attract private investors. Since 2015, there has been only one waterway project of the Transport Ministry carried out under the BOT format.

While private investors of road projects can build toll stations on the roads to collect fees, it is infeasible to build toll stations on waterways.

Road projects, which make it easy for investors to collect fees and retrieve their investment, seem to be the only infrastructure sector attractive to private investors. However, the recent mushrooming of BOT projects and unreasonable distance between BOT tollgates have sparked opposition among the community.

To solve these problems, the National Assembly issued Resolution No. 437 in October 2017 stating that investors can only set up tollgates on newly built roads.

According to data from the Ministry of Transport, as of early May 2020, 58 out of 60 BOT projects were left with revenues lower than the initial estimation, while the revenues of 17 projects did not meet even half of the expectations. This proves that even road projects are losing their appeal among private investors, and infrastructure investment is facing an increasing number of challenges. SGT