VietNamNet Bridge - More and more private investors are pouring money into the infrastructure development sector, which the State dominated until 2012.

The South Korean GS E&C’s building on Pham Van Dong Avenue built under the BT mode (build, transfer) once stirred public debate as GS E&C was one of the pioneers which invested in infrastructure projects. Also, the high value of the five land plots that GS E&C received in exchange for infrastructure items heightened public interest in the project.

The wave of private investors injecting money into infrastructure projects, however, began in late 2014. Vingroup, the largest real estate group in Vietnam, after putting Vinpearl Phu Quoc resort into operation in November 2014, has kicked off a new project on Phu Quoc Island to build a terminal at Phu Quoc International Airport, covering an area of 179.3 hectares in Duong Dong town.

T&T Group, after announcing that it wants to buy the Phu Quoc International Airport from the state, has recently said they want to buy the Hanoi Railway Station.

The station is also being eyed by Vingroup, which wants to take over three railway stations in Hanoi, Da Nang and Saigon and two airports in Sai Gon and Hai Phong. 

Analysts said that never before has the infrastructure sector been so attractive to private investors. Many large projects have resumed after many years of interruption. 

The Trung Luong – My Thuan highway project, a component project of the HCM City – Can Tho highway, is an example. The project kicked off in 2009, but to date, only the HCM City – Trung Luong segment has been completed and put into operation.

However, the project is expected to have a new start this year as the joint investors of Tuan Loc – Yen Khanh – BMT – Thang Loi – Hoang An – CII B&R have won the bid to develop the project under the BTO mode (build, transfer, operation). It is expected to become operational by 2018.

Another important project, the Trung Luong – My Thuan highway, resumed recently when Dai Quang Minh Real Estate JSC became the new investor of the VND12 trillion project.

Commenting about the opportunities for private investors to develop infrastructure, Le Quoc Binh, CEO of CII, said the potential is great because investments in infrastructure works remained modest.

However, Binh said it would be not easy to profit from infrastructure projects because the high level of capital needed and the high risks.

Investors prefer highway projects as there is no rival (there is no BOT highway on the same route). However, it willl take investors 15 to 20 years to recover investment capital.

DNSG