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HoREA: BT, BOT projects can lead to corruption

Van Nam
Tuesday,  Nov 7,2017,23:38 (GMT+7)
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HoREA: BT, BOT projects can lead to corruption

Van Nam

A view of the cable-stayed Phu My Bridge in HCMC, which was built in the BOT format - PHOTO: LE ANH

HCMC -  Though build-operate-transfer (BOT), build-transfer (BT) and no-bid contracts have been relied on to raise huge amounts of capital from the private sector to fund infrastructure projects, they have resulted in corruption, according to the HCMC Real Estate Association (HoREA).

In a report which HoREA chairman Le Hoang Chau is expected to present at a seminar today, Chau said BOT and BT had helped mobilize domestic and foreign capital to develop infrastructure, thus contributing to social and economic development.

But these investment formats have given rise to corruption and group interests, he noted.

Offering BT, BOT and no-bid contracts for infrastructure projects has become widespread but investors are not financially strong, with 90% of total capital needs coming from bank loans. Therefore, most of these projects have fallen behind schedule and shown signs of irregularities.

Meanwhile, these investment forms lack effective monitoring systems, especially independent ones. Investors have taken advantage of this to make gains and occupy land at lower-than-normal prices.

HoREA proposed holding competitive tenders to choose investors for infrastructure development projects.
The city government recently ordered all BT projects under negotiation be put on hold.

Su Ngoc Anh, director of the HCMC Department of Planning and Investment, said the city government has spent about VND1,000 trillion on infrastructure projects in the last five years, with a sizeable amount of it coming from BT investors.

The city is expected to spend an additional VND500 trillion on infrastructure development in the coming years. However, the city’s budget can meet around 30% of that figure, so BT investment is still needed.

As many as 18 BT and BOT infrastructure projects that are underway in the city require a total of VND59 trillion. Currently, around 130 investors have signed up for PPP projects worth some VND350 trillion.
Anh noted project development and land bidding will be closely monitored.

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