Despite the efforts to attract private sector investment into infrastructure projects, 50% of the investment are still sourced from the state budget and ODA loans, while drivers still suffer from high road tolls.

Total investment into road constructions have reached USD14.2bn of which USD7bn has been sourced from the state budget or ODA loans, according to a report from the Central Institute for Economic Management (CIEM).

In order to boost the country’s development, infrastructure must be improved. According to the Ministry of Transport, total investment needed to develop infrastructure until 2020 is estimated at USD48bn. However, the state budget can only afford 28% of the projected costs.

The private sector has helped to improve the infrastructure recently but there are still many shortcomings.

According to the CIEM, out of the USD14.2bn investment for road construction, USD7bn is sourced from the state budget or ODA loans and USD3.13bn from project bonds issued by the Vietnam Expressway Corporation. Over USD4bn are from bank loans for several expressways and road projects like the Phap Van-Cau Gie Expressway.

Government also failed to attract foreign investments.

CIEM warned about construction quality and said they had seen capital of various project exceed estimations when the projects fell behind schedule.

"It is becoming the norm. For example, investment in the 61.9km-long HCM City-Trung Luong Expressway was estimated at VND6.5trn (USD291m) but adjusted to VND9.9trn. The Hanoi-Hai Phong Expressway also had its investment adjusted from VND24trn to VND45trn," the CIEM reported.

Huynh The Du, managing director of Fulbright Economics Teaching Programme said Vietnam's roads were much more expensive than other countries. The Ben Buc-Long Thanh Expressway costs USD25.8m per kilometre while the average costs in China and the US are USD10.9m and USD17.4m.

The world's average toll fee is VND1,500 per kilometre per vehicle but this rate is much higher in Vietnam. A 18-tonne-container has to pay VND8,000 per km to use the Hanoi-Hai Phong Expressway.

Some investors only fixed the existing national highways and then renamed them as expressways to collect toll money. The report also showed that the appointment of contractors is enabling corruption, creating pathways for financially weak and incompetent contractors to get the projects.

In addition, the government still gives huge preferential treatments to several projects yet is unable to verify and assess their quality, while the public are left with paying higher tolls.

Dtinews