10:44 | 11/10/2017 Economy
(VEN) - Given the reduction in state investment, mobilizing capital from the private sector is important to satisfy Ho Chi Minh City’s development investment demands.
Investment capital needed
Ho Chi Minh City (HCMC) needs an estimated VND850 trillion for its vital projects/programs in the 2016-2020 period. These include improvement of the city economy’s growth quality and competitiveness, increasing the quality of the city’s human resources, administrative reform, minimizing traffic jams and traffic accidents, flood control, coping with sea level rise, minimizing environmental pollution, and urban development.
Transport infrastructure development, environmental protection and flood control projects alone need 60 percent of the total estimated investment capital, while the city’s coffers can satisfy only 20 percent of the projects’ capital demand.
According to the city Department of Planning and Investment, 23 public-private partnership (PPP) project contracts have been signed totaling VND71 trillion or US$3 billion in value, while the city is working to kick off 130 other projects totaling an estimated VND395 trillion or US$17 billion in value.
Flexible investment attraction
Su Ngoc Anh, director of the Ho Chi Minh City Department of Planning and Investment, said the department is implementing various solutions to attract investment capital from the private sector. One major source of investment are public-private partnerships (PPP) in construction of state office buildings, housing for low-income earners, transport and social infrastructure, infrastructure of industrial parks, agricultural zones and high-tech zones, and information technology infrastructure, trade, science and technology, meteorology and hydrography.
The city will continue to improve its business investment environment, expand information technology, remove bottlenecks associated with administrative red tape, and apply bidding as a way to allocate resources in order to create conditions for businesses from all economic sectors to invest in the city.
The city will diversify forms of payment to investors, implement payment on a flexible basis and suggest appropriate policies in accordance with international practices and trends and domestic laws to attract investors.
Through public-private partnerships, the Ho Chi Minh City Finance and Investment State-owned Company (HFIC) has signed a memorandum of understanding (MoU) to borrow capital for two projects - a VND99 billion project to build a District 7 Medical Center and a VND800 billion project to construct Service Zone 1 of Pediatrics Hospital 1. Since 2010, HFIC has funded 160 infrastructure projects worth more than VND25.8 trillion in the city.