Hanoi, October 19 (Engineering Daily) -- Vietnam needs more reasonable policy to attract FDI(Foreign Direct Investment) into major transport infrastructure projects e.g. North-South expressway and Long Thanh international airport.
The Ministry of Transport reported that FDI into the road converges to specific models: the foreign investors invest capital and directly participate in management and commercial exploitation after the project completion; acquire the right to exploit the routes being exploited; or acquisition of domestic enterprises’ capital for investment and commercial exploitation.
With the three forms, a few foreign investors have expressed their interest in Vietnam: Nexco (Japan) proposed to build Phap Van - Cau Gie expressway; IL & FS (India) wanted to buy a 70% stake in the BOT Hanoi-Hai Phong expressway project; Vinci (France) proposed to buy the right to charge the Cau Gie - Ninh Binh expressway. However, no project has been awarded or contracted to implement up to now.
Furthermore, in railways, Russian and Czech investors proposed to cooperate with Vietnam Railway Corporation to set up a joint venture to manufacture locomotives and wagons, but failed due to the domestic market is small and limited ability to export.
In addition to the limited market situation, it is pointed out that ineffective legal system has prevented the investment.
The Ministry of Transport pronounced that it is difficult to attract FDI for the characteristics of transport infrastructure. It is required to have large capital and the payback period is long and that Vietnam does not have proper legal system/policies to encourage the investment.
The ministry of Transport added "For now, we have three key methods to open the valve for FDI. They are development of a PPP investment law and a risk-sharing mechanism, and forming a state support fund and ensuring openness and transparency."
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