“The quality of transportation projects have been improved, but some works are still downgraded quickly. I confirm that the reason is not the shortage of capital,” said Minister of Transport Ho Nghia Dung on March 14.

To curb inflation, the total investment for transport will reduce. What will your Ministry do to ensure the construction pace of key projects?

“Before the government issued solutions to control inflation and stabilize macro-economics, the government and the National Assembly instructed relevant agencies to reduce 50 percent of capital of projects funded by the government bonds in 2011.”

For the transport sector, we need VND20-25 trillion ($1-1.25 billion) in 2011, but the state budget will allocate only VND11 trillion (US$550 million).

To deal with the reduction of capital, we have classified projects. We will give priority to projects that can be completed in 2011. Ongoing projects which can be disbursed quickly are the second priority. Projects that are not kicked off yet are canceled.

Transport projects are often implemented in a long time so the total investment often changes to fit the fluctuation of the costs of construction materials. What will your Ministry do to assist investors?

“We focus on some solutions, including speeding up site clearance and professionalizing project management boards.

It is very difficult for contractors to find capital at present, so the Ministry of Transport will try its best to pre-pay capital to contractors to facilitate contractors to purchase materials and prepare other conditions. The Ministry will check the disbursement later.”

Is the shortage of capital the reason for the low quality of some transport works?

“The quality of transport projects has improved, but some works are still downgraded quickly, as the local media has reported.  However, I confirm that the reason is not the shortage of capital, but the responsibility of contractors in terms of management, techniques and construction.”

Could you tell us more about the improvement of mechanisms to facilitate the private sector to invest in transport projects?

“The consistent policy is raising capital from all sources to invest in transport infrastructure. I think that we need an investment fund which offer high incentives for transport projects.”

The Ministry of Transport is striving to increase the rate of BOT (build-operate-transfer) projects to 30-50 percent of the total transport projects in 2011.

Most recently, the Co Chien bridge project has been kicked off in the form of PPP (public private partnership). For bigger projects like the Phan Thiet – HCM City highway, which is funded by international donors, the state will provide reciprocal capital while private firms will contribute their capital.

PV