Hanoi Department of Planning and Investment has explained a decision to give investors 700 hectares of land in different locations in Hanoi in exchange for the construction of five roads with a build-transfer contract.

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The department claimed that the project had already been considered and researched from 2009 to 2015. Hanoi’s authorities gained prime ministerial approval to appoint investors. The main reason for handing over large amounts of land was because they had limited funding. The policy to attract the private sector to invest in infrastructure projects has been implemented since 2016.

It also said that all procedures were carried out in accordance with Resolution 15 issued in 2015 about private-public-partnership projects. The investors will only be allowed to use 26% of the 700 hectares to recover their investment.

However, many auditing agencies expressed doubts about the transparency of the policy. The State Audit Office of Vietnam recently submitted a report on the use of the state budget in 2016 which showed violations in 17 build-transfer projects. Violations were often during the investor capacity appraisal process, and many investors proved incapable of shouldering the projects later on.

Appointing contractors reduces competitiveness and may end up with projects being awarded to incapable contractors. Giving away land is a violation of the Land Law. Such methods can cause losses to the state budget as the project and land transferring times are unclear and the transactions may be unfair.

Build-transfer projects face less opposition from the public than build-operate-transfer projects, however, State Auditor General Ho Duc Phoc said it was still easy for the projects to be used for personal gain.

Many experts opposed the method, saying that if the government is in difficulty, it should auction the land instead of exchanging it for investment in projects.

Dtinews