Talking with us about the construction project of the North-South Highway, economist Pham Chi Lan - former member of the Prime Minister’s Research Committee, said that domestic private companies can do it. Why strict regulations are set to prevent them from participating?
Economist Pham Chi Lan said that domestic private companies can completely build the North-South Highway project.
North - South highway, doubts
The Ministry of Transport has just announced the construction of the North - South Highway, how do you evaluate the implementation of this road?
- I am very worried about the current way, the North - South highway will be created by many pieces, not a smooth road from the beginning to the end like a strong piece of silk connecting the country. The bumpy joints lacking of the uniformity are inevitable.
It is like the road in Thai Nguyen, each Contractor builds a section. A road built by over 70 contractors. Each contractor builds few hundred meters. These few hundred meters are according to this contractor’s standard, another few hundred meters comply with another standard, the joints are bumpy.
According to planning, the North-South Highway is divided into several component projects including 8 BOT projects. Recently Deputy Minister of Transport Nguyen Nhat said that: “For these component projects, domestic companies were unqualified to participate as stipulated”. Is the Ministry of Transport’s leadership arbitrary when evaluating the capacity of domestic infrastructure construction companies?
- I think that it doesn’t make sense if after 44 years of reunification, over 30 years of reformation, Vietnam’s capacity is not enough to build their own North - South road.
Sun Group successfully builds Ha Long - Van Don highway and then the modern airport there. Ca Pass tunnel built by Deo Ca Group is also very good ... Domestic companies have already done, why it is said that they cannot do it.
If it is divided into 11 component projects, including 3 public investment projects, 8 BOT projects for 654km, so each project is less than 60km. 60km of highway with 4 to 6 lanes, can’t domestic private companies do it?
During the fierce war, when making Truong Son street, there is nothing in hands except human strength, this legendary road is built. Then, we successfully build the industrialized Truong Son road in the 1990s under the condition of having not much accumulation, there is no ODA.
Such roads are built, now with better conditions from means, equipment, technology, knowledge ... there is no reason for not being able to do it. I do not believe that domestic investors cannot do it. Why we aim at foreign investors?
In the bidding documents, the Ministry of Transport sets up the financial capacity score to the Investor of 60% of the total scores. Most of domestic companies do not meet the financial capacity of this regulation. That is the key for domestic investors to “be unable to participate”?
- Deputy Minister Nguyen Nhat reports to the National Assembly’s Economic Committee that: “Domestic private investors cannot be able to participate as stipulated.”
Why they do not allow companies to link together or let them mobilize by corporate bonds or mobilize any other source of capital to have enough capital for the project?
The regulation must be something that does not reject the reality in our country, most companies are not big enough to build very big projects but have enough capacity to participate, combine one another to do it. Do not force domestic companies to stand outside the matches taking place in our country.
The contractor selection should give priority to domestic investors to raise money from local people for domestic companies to develop together, create job opportunities for domestic laborers. Each project is an opportunity for domestic companies to grow up. How can companies grow up if they do not implement big projects? Now, when they can build big roads and they are left out by setting strict conditions.
The key is “as stipulated”. So the Ministry of Transport or a certain level sets regulations to leave Vietnamese companies out.
What consequences from Cat Linh - Ha Dong railway make us think about the scenario of Chinese contractors participating in the construction of North - South Highway?
- A woman selling vegetables at the market also says that Chinese contractors make such a messy way, why we let Chinese contractors continue to build Cat Linh - Ha Dong railway.
I am very afraid of these 8 projects of this North - South Highway falling into the hands of 8 Chinese contractors, then there will be 8 projects similar to Cat Linh - Ha Dong railway all over the country. I wonder how many years it will last, how the quality as well as the synchronousness is, when each project is built in a different way.
What are the opportunities for domestic companies to participate in the construction of this highway?
- I think, these 8 BOT projects should be built by domestic companies. Now, if they want domestic private companies to participate, they need to amend the regulations.
If it stipulates 60% of the corporate capital, let them combine capital, form partnership. If the Chinese contractors come here, the capital is not of that Contractor. They have Government and banks behind them.
Change of preconception about BOT
One of the very important factors in BOT investment is capital mobilization. In fact, capital from banks is very difficult to disburse with a series of strict conditions, should we consider borrowing capital from abroad?
- When domestic private companies suffer from capital issue, it is difficult to borrow from domestic banks, we should borrow from abroad. However, be careful with their conditions. In the case of building BOT, it is not possible to mortgage by that project or product because that project becomes the national product of taxpayers.
A lesson in front of our eyes. For the capital lent by China for us to build Cat Linh - Ha Dong railway, we have to pay 26 billion VND of interest per day, it has been postponed to 10 times but it has not been finished, especially it increases capital to many times.
Currently, traffic BOT projects are considered to be bad by a number of people, it is for group interest, how do you feel about this investment form?
- The bad prejudice is from the fact that we create a bad image first with a series of problematic BOT projects. Those bad things are not entirely caused by the investors, but by the people who make such BOT decisions.
Many projects, investors with no construction experience, no capital, even they are heavily indebted, they are allowed to do it.
In fact, BOT is an extremely important and successful infrastructure construction investment channel in many countries. When this form of investment is introduced into Vietnam, it becomes distorted and deviatory.
The media should set an example, name the true companies for information. There must be good examples for people to look at.
Does the overall picture of BOT infrastructure investment in Vietnam only have a dark color?
- It does not really like that. There are very beautiful examples such as people building Ca Pass Tunnel and roads in some other provinces. The media should set an example, name the true company for information. There must be good examples for people to look at.
The press should have lots of articles to get the opinions from objective analysis experts on the difficulties of BOT investors.
From that fact, should we have a PPP investment law soon?
- It is very urgent. But when making laws, it must be transparent, consult experts, scientists, companies and people. The Government regulations to companies must be consulted at least 60 days before issuance.
It is necessary to quickly have clear investment law so that the investment policies ensuring the BOT projects are properly implemented.
BOT design is basically to mobilize domestic force, share the burden with the Government. For big projects, it can be mobilized from abroad. But not everything is foreign investment, we need to further promote internal force.
Thanks!
Written by Nguyen Quang Thanh
