The lack of transparency in Vietnam is causing foreign investors to consider BOT (build-operate-transfer) projects cautiously.
The Ministry of Construction (MOC) believes the country needs more reasonable policies that would help improve the quality of BOT projects. Dinh Trong Thinh from the Finance Academy believes this is a good solution in the context of limited resources, but he pointed out that foreign investors are reluctant to participate in BOT projects.
The Ministry of Construction (MOC) believes the country needs more reasonable policies that would help improve the quality of BOT projects.
The development program is not clear enough, and investors cannot foresee the efficiency of the projects, he said. Having well organized development plans which can show the prospects of projects and future performance is important.
Thinh said auctions in Vietnam are organized in a way that lacks transparency. This explains why many foreign investors give up after attending the bids. It is also difficult to access information about figures, information and investors.
In addition, policies and investment incentives in Vietnam change, which makes it impossible for investors to calculate the profits they can expect from projects.
“As for BOT projects, if the government of Vietnam offers reasonable benefits and ensures transparency in implementation, foreign investors will show interest,” Thinh said.
An analyst said the biggest problem in BOT projects is the lack of transparency.
“If this is settled, investors would think that they have no reason to refuse to participate in projects which can bring profit and have low risks, because they are backed by the government. They understand that with the projects, they will have good relations in Vietnam and can expand their investment activities in other business fields,” he said.
The analyst said it would not be a problem if foreign investors bring their workers from home countries to Vietnam. He said that Vietnamese workers are capable of undertaking work in BOT projects.
When negotiating agreements, or ODA (official development assistance) or BOT projects, it is necessary to clarify the provisions about the use of foreign workers. Vietnam would only allow foreign workers to undertake work which cannot be done by Vietnamese.
“The problem lies in the prices negotiated between construction companies and investors,” he commented.
Japanese East Nippon Expressway Company Limited (NEXCO) and Japan Expressway International Co., Ltd (JEXWAY) have become first foreign enterprises to set foot in a Vietnamese BOT project after acquiring 20 percent stake of FECON Corporation in the Phu Ly Bypass project.