BETTER MANAGEMENT OF BOT, BT PROJECTS NEEDED: INSPECTORATE

The Government Inspectorate has found irregularities in the management of BOT (Build-Operate-Transfer) and BT (Build-Transfer) projects in HCM City, including the use of inappropriate contractors.

The Inspectorate’s report, which examined the implementation of BT and BOT projects in HCM City, found that the city was mobilising resources properly to invest in infrastructure, but had several shortcomings in investment preparation, including the publication of lists of projects, selection of investors, and preparation and approval of reports on project feasibility.

In addition, shortcomings were found during the investment execution process, which included contract signing, project progress, bidding and selection of contractors, acceptance of payments, and maintenance.  

Based on the findings, the Inspectorate recommended that Prime Minister Nguyễn Xuân Phúc instruct the ministries of transport, construction, finance, and planning and investment as well as the city People’s Committee to take action to remedy the situation.

The Inspectorate asked the ministries of planning and investment, finance and transport to work with the Government on issuing appropriate documents or regulations on paying back the capital of BOT and BT projects.

The ministries were also requested to develop a policy for maintenance and repair expenses to ensure economic efficiency and to improve management, inspection and supervision of projects.

The HCM City People’s Council was told to approve investment policies for BOT projects before issuing investment registration certificates so that returns on investment could be ensured.

The city People’s Committee was urged to direct the Department of Construction to compile statistics on projects funded with State capital in the city.

Speaking at a recent meeting in HCM City, Võ Văn Hoan, head of the People’s Committee Office, said the city had faced numerous challenges in developing infrastructure projects since the early 2000s, especially a shortage of funds.

He said that many road infrastructure projects in the city required huge amounts of capital but the city’s budget was overstretched, while budget allocations by the central Government were insignificant.

To deal with the capital shortage, the city has sought stronger private sector engagement by developing infrastructure projects under the BOT or BT investment models.

From 2010 to 2015, HCM City signed contracts with eight investors to develop 13 road and environmental protection projects under the BOT or BT model with total investment of nearly VNĐ33 trillion (US$1.45 billion).

Five of them have been completed, while the remaining eight projects are still under construction.

The Government Inspectorate said that many of the projects now underway are moving at an extremely slow pace, leading to losses and cost overruns.

Source: VNS