Ho Chi Minh City will call for investment in 130 projects in the public-private partnership (PPP) model, worth over VND380 trillion (US$16.72 billion) amid local budget limitations.

PPP projects have helped HCM City to address many urban problems related to traffic, flood tide and environmental pollution.

The city requires around VND850 trillion (US$37.4 billion) to invest in infrastructure projects in the 2016-2020 period, with over 50% of the investment needed to deal with floods and environmental and traffic problems, however, the local budget can only account for 20% of the total investment.

The information was announced at a conference, held in Ho Chi Minh City on June 14, to review the PPP investment in infrastructure and the plans for the 2017-2020 period, in a bid to facilitate enterprises participating in this field.

Ho Chi Minh City currently has 153 projects in the form of the PPP model, with a total investment of VND450 trillion (US$19.8 billion), including 23 completed projects primarily in the fields of transport and environment.

Although the number of PPP projects accounted for only 5% of the total number of public investment projects in Ho Chi Minh City, the source of funding of PPP projects was five times higher than the city's public investment in the 2011-2015 period.

Therefore, the PPP model is considered as one of the most appropriate solutions to the city in the future.

PPP projects have helped the city to address many urban problems related to traffic, flood tide and environmental pollution.

Chairman of Ho Chi Minh City People's Committee, Nguyen Thanh Phong, said that the PPP model has brought about great benefits to the city, helping to raise idle capital among the people and enterprises, which has helped to promote socio-economic development.

Phong noted that the PPP model will be an optimal solution in dealing with capital shortage on infrastructure investment, amid the pressure of public debt and limited local budget.

VND300 trillion needed for infrastructure projects in HCMC

The HCMC government will need around VND300 trillion (US$13.2 billion) for its urban infrastructure projects by 2020 but its budget can meet half the amount at best, heard a meeting on June 13.

The city will be able to arrange a mere VND164 trillion for these projects by 2020, said Le Thi Huynh Mai, deputy director of the HCMC Department of Planning and Investment.

City vice chairman Tran Vinh Tuyen said the city’s population had grown to a whopping 13 million, including migrants from other parts of the country, so the city had come under huge pressure to carry out new infrastructure projects, especially in the inner-city districts which account for 12 million residents.

The city is in dire need of new hospitals and schools while the city is working hard to pay for about 199,000 State employees.

The central Government has asked the city to reorganize its administrative agencies and make some of them financially independent to ease the burden for the State budget, he added.

According to a Department of Planning and Investment plan presented on June 13, the city will opt for public-private partnership (PPP) as a key investment format for future infrastructure projects, including 54 projects previously allowed to use State capital, totaling more than VND18.4 trillion.

The city will push for 105 PPP projects worth a total of VND334.6 trillion and encourage the private sector to participate in 98 others capitalized at about VND128.8 trillion, according to the department.

The department said the city will introduce an attractive mechanism for luring private capital into vital projects, especially for social housing, resettlement and infrastructure.

Nhan Dan/SGGP