Investors neglect BOT railway projects
The Vietnam National Railway Administration has earlier recommended 20 railway projects to be developed under the forms of BOT (build-operate-transfer), BT (build-transfer), and BTO (build-transfer-operate).
In early 2010, the list of projects was submitted to the Ministry of Transport. However, so far none of them has been carried out as they are still awaiting investors, said Nguyen Van Doanh, deputy director of the railway administration.
Among the 20 railway projects calling for investment in 2010-2020, there are some large-scale ones such as the 381-km Lao Cai-Hanoi-Haiphong line using 1.43-meter-wide double track, costing VND91.2 trillion.
Other notable projects are the Bien Hoa-Vung Tau route stretching 114 kilometers with an estimated investment cost of VND15 trillion, and a 49-km railway connecting Trang Bom in Dong Nai with Hoa Hung in HCMC worth VND11 trillion, including an overhead section from Binh Trieu to Hoa Hung Station.
In comparison with BOT road projects, it is more difficult for BOT railway projects to attract investors due to slow capital recovery, said Ho Minh Hoang, general director of Ca Pass Investment Joint Stock Company.
"Railway projects demand large funds. The greatest problem in the mechanism for luring investment into BOT and BT projects is capital contribution of investors,” Hoang stated.
He demonstrated: "For example, investors in a VND20-trillion BOT project must satisfy 15-20% of the capital demand. Investors cannot afford such high capital costs.”
Furthermore, cumbersome administrative procedures also discourage investors from joining BOT projects, said Hoang.
* The Vietnam Railway Corporation will kick off construction of three railway flyovers in the central region on Wednesday, with an aim to reduce the number of traffic accidents at railroad crossings. One flyover will be developed in Danang City and the other two in Quang Ngai Province.
The total investment cost of the project is some VND895.2 billion. The project is scheduled for completion prior to December 31, 2012.
