Land clearance, lack of capital obstacles to highway construction

CA - Ground clearance and lack of capital are still two major obstacles for infrastructure construction in 2010.

This year, the Ministry of Transport plans to carry out 40 national highway and road projects, but it will be difficult to maintain its pledge on progress of ongoing and new projects.

Site clearance has been the most serious obstacle for many years.

To improve the situation, experts suggest that a rule to clearly define responsibility of related authorities, including management board of project, local authorities and contractors, should be issued.

The new rule would adjust the Government's instruction to separate site clearance as a part of a project. There is no regulation about the responsibility if the work does not meet the time requirement.

Without such regulations, no units or individuals have been fined, despite the fact that the delay of ground clearance is more and more common.

Compensation to residents who must resettle is another part of ground clearance.

Many new regulations have brought active changes in the administration of a master plan, site clearance, compensation and resettlement.

But many people who had to move before the new regulations were issued received less money than is now required.

Limited capital

Last year, the transport industry disbursed a record of VND35 trillion for infrastructure.

This year, the industry needs more capital, around VN$45 trillion (US$2.3 billion), an increase of 20-30 per cent, for 40 new projects.

According to the Minister of Transport, Ho Nghia Dung, it will be a challenge to provide enough capital for these projects this year.

"The ministry will soon report to the Government so it can find VND4 trillion ($200 million) for corresponding capital for projects," he said.

At present, the ministry has VND10 trillion from Government bonds while they need VND18 trillion.

In addition, capital for Build-Operate-Transfer (BOT) model last year reached VND10 trillion but this year, the figure would be 1.5 times higher.

To ensure capital for projects, along with mobilising capital from the State budget, Government bonds and ODA, the ministry has carried out programmes to call for more investment under BOT, build-transfer, build-operate and public-private partnership models. The ministry has also improved administrative reform to cut expenditures by giving more power and responsibility to localities and units.