Vietnam’s infrastructure woes to be addressed with the help of private investors.
Improving infrastructure is the backbone of developing a country and its economy. It enables the easier movement of people. Helps to draw in other investment by enhancing that location’s attractiveness. The streets free up making it not only easier for individuals to move around but also industries that rely on moving goods by land. Subsequently the economy benefits and is why infrastructure is often earmarked as an important area that needs attention.
For Vietnam the story is no different. Vast capital is needed to be injected to the little infrastructure that exists. The Ministry of Planning and Investment have forecast that the country needs 1,380 kilometres of highway. This is contributing to their overall estimation that the country requires USD 480 billion solely for infrastructure alone.
There is no denying that Ho Chi Minh City’s streets are throbbing with traffic. Car ownership has increased thanks to a growing middle class. Consequently much of the city comes to a gridlock which is not helped by the lack of public transport on offer.
It has been reported that there at 37 traffic congestion spots in the city. The authorities have recognised the problem but need vast capital in order to rectify the issue. However according to the Ho Chi Minh City Transport Department the city can only chip into just over 30 percent of the VND 553.879 trillion required for 203 transport infrastructure projects.
Raising capital
Cue the need for private investors to help take some of the load. So over a hundred businesses were requested to join a conference in Hanoi on urban development to help generate funds to inject into improving infrastructure.
A number of promising responses were made. Including one from Vietnam’s largest developers, Vingroup. The have committed to helping the issue by agreeing to invest VND 100 trillion into a railway. Cherry picked from a list of projects that the were discussed at the conference, 11 of which are designated to urban infrastructure.
Infrastructure developer CII were excited at the prospects too. The firm intend to inject capital into projects in return for land. Bypassing any sort of bidding process to make for a smooth transaction. It is a win-win situation for both parties and will help address the much needed infrastructure issues that the country faces.