State-funded infrastructure projects come into focus
Minister of Planning and Investment (MPI) Vo Hong Phuc said the government would focus on clarifying articles in the Investment, Procurement, Enterprises and Construction laws to make them more harmonious. Overlapping laws and regulations relating to state-funded construction projects are blamed for wasted capital.
A recent National Assembly Standing Committee report revealed that 3,979 projects fell short of schedule, accounting for 13.9 per cent of state budget-funded construction projects in 2007. The figures were 3,595 projects, representing 13.1 per cent in 2006 and 2,280 projects, accounting for 9.2 per cent in 2005.
The committee reported that complex procurement procedures delayed the Ca Mau fertiliser plant by two years. Investment capital for the plant with a capacity of 800,000 tonnes of fertiliser per annum was pulled up to $900 million from a projected $500 million because of inflation. According to local authorities’ studies in southern Vinh Long province, it took up to 42 months for government funded projects to go through the licence application-to-building process.
It takes 29 and 23 months, respectively, for projects in provincial and district levels. The Ministry of Construction, meanwhile, reported that a construction project encountered 33 administrative procedures in Hanoi and Ho Chi Minh City. The preparation process to start construction is approximately three years.
Deputy general director of the MPI’s Department for Legislation Tran Hao Hung said one of the major tasks in reforming laws and regulations was to improve the legal framework for build-operate-transfer (BOT), build-transfer (BT), and build-transfer-operate (BTO) projects.
Inharmonious criteria for bidding and licencing related to many kinds of laws and regulated by different ministries and local authorities were big obstacles that discouraged investors, particularly those from the private and foreign-invested sectors, Hung said. Phuc said that along with laws and regulation improvements, priority would be given to increased quality of planning as well as the qualification of plans.
The National Assembly Standing Committee said the stoppages and delay of 2,971 construction projects worth VND33,358 billion ($1.98 billion) this year made by ministries and local authorities in a bid to curb inflation also reflected their poor planning, assessment and decision making activities. Total state budget funds for construction projects amounted to VND237,447 billion ($14.1 billion) during 2005-2007, accounting for more than 20 per cent of the overall state budget financed investment.
