Private investors can all see great potentials in infrastructure projects. However, a lot of things still need to be done to turn the potentials into reality.
Le Quoc Binh, General Director of the HCM City Infrastructure Investment Joint Stock Company (CII), when asked about the opportunities in infrastructure projects, said there are numerous projects, but not all of them can be suitable to enterprises.
“You need to be sure
that you can make profit and you can find the output for the projects,” he
said.
Analysts have reminded the case of Phu My Bridge project developed by the Phu my Bridge BOT Company. To date, there are still problems with the Vanh Dai Dong Road (east belt), linking the interprovincial highway No. 25B and the Binh Thanh crossroad, thus making it difficult for the investor to collect fees to recover the investment capital.
Andy Ho, Managing Director of VinaCapital, a fund management company, said of the four funds being managed by VinaCapital, VNI, or the Vietnam Infrastructure Ltd has been facing biggest difficulties. VNI has the discount rate of the NAV (net asset value) on fund certificate at 44 percent.
A part of the fund’s value has been lost due to the investments in the shares of the listing infrastructure development companies. The managing director also said the toughest investment deal is the one in the Phu My Bridge. The fund is now trying to withdraw capital from some projects to get money back to pay to investors.
Analysts, while believing that infrastructure items prove to be a profitable investment field, said that the “playing field” just fits powerful players with long term powerful financial resources, because it will take investors a long time to take back the investment capital.
At present, most of the private infrastructure investors are multi-field enterprises, which have the incomes from different sources, thus allowing them to use the profits gained from short term investment deals for developing long term infrastructure projects.
Bitexco is a typical example. It has been successful with the 1A Highway and the byway in Thanh Hoa City under the mode of BOT (build, operation, transfer). And is has become the first private investor undertaking the project on the Dau Giay – Phan Thiet highway under the mode of PPP (private public partnership) with the support by the World Bank.
However, analysts said there are very few enterprises like CII or Bitexco, which have their own advantages in capital or sources of income (setting up stations to collect fees).
In fact, executing infrastructure projects has caused headaches to many real estate developers, while many of them have to slacken the project implementation.
PPI, for example, planned to increase its chartered capital and raise funds to serve the development of road projects by exploiting the huge land fund (13 projects, 377 hectares) in HCM City, Long An and Binh Duong. However, since the real estate market has got frozen, it would be very difficult for PPI to fulfill its plan.
In 2011, when starting the BT (build, transfer) project on building the inter-provincial highway No. 830--linking HCM City and Long An province, PPI once thought of exploiting the land fund along the project in order to raise funds for the BT project implementation (capitalized at 2.6 trillion dong). However, it would be not easy for it to make the plan come true.
Regarding the Dau Giay – Phan Thiet project, the capital for the project would be from the private economic sector and the funds to be raised by the Government. Bitexco would be the first investor, while the second one would contribute the remaining 40 percent of capital through international bids.
DNSG
