Barriers must be removed for vital transport infrastructure

Last week, Prime Minister Pham Minh Chinh issued an official telegram calling for “the highest sense of responsibility and the full engagement of the entire political system” to accelerate site clearance for national key transport projects.

“This is a complex stage as it is closely linked to the production, business, and livelihood activities of the public,” said the telegram.

Despite the significance of these tasks, site clearance, resettlement, and technical infrastructure relocation for numerous projects across various localities remain behind schedule. These include the eastern North-South Expressway; Tuyen Quang-Ha Giang, Bien Hoa-Vung Tau, and Hoa Lien-Tuy Loan expressways; Ho Chi Minh belt road No.3, and two components of the Khanh Hoa-Buon Ma Thuot expressway.

Prime Minister Chinh urged leaders of affected localities to mobilise all available resources to expedite site clearance. He also asked them to engage directly with residents to address their concerns flexibly, and to coordinate with investors to prioritise site clearance in critical areas.

For projects scheduled for completion in 2025, localities have been instructed to accelerate the construction of resettlement areas and the relocation of high-voltage power lines, ensuring that project sites are made available by the end of August.

Specific localities, including Tuyen Quang, Quang Binh, Quang Tri, Danang, Phu Yen, Khanh Hoa, Dong Nai, and Binh Duong, have been directed to mobilise maximum resources to remove obstacles, with the goal of providing full site clearance for aforementioned ventures.

“Provinces and cities must ensure that authorised agencies and localities work closely with the Ministry of Industry and Trade and Vietnam Electricity to expedite the relocation of high-voltage power lines, especially in areas requiring significant removal,” PM Chinh emphasised.

In a related development, PM Chinh also launched a 500-day campaign last week to complete 3,000km of expressways. The resolution of the 13th National Party Congress identifies comprehensive infrastructure development as one of the three strategic breakthroughs. The country aimed to have 3,000km of expressways in operation by 2025, and 5,000km by 2030.

The National Assembly Economic Committee recently urged the government to accelerate the construction of national infrastructure projects, which have been delayed, to enhance public investment disbursement.

“All obstacles related to site clearance and the supply of sand and land materials for project foundations must be resolutely addressed,” the committee asserted.

National-level infrastructure projects include Long Thanh International Airport in Dong Nai province; the eastern section of the North-South Expressway; Hanoi’s ring road No.4 and Ho Chi Minh City’s ring road No.3; the first phase of Khanh Hoa-Buon Ma Thuot expressway and Bien Hoa-Vung Tau expressway; and the first phase of the Chau Doc, Can Tho, Soc Trang expressway.

National Assembly deputy Tran Anh Tuan from Ho Chi Minh City attributed the slow progress of these projects to cumbersome bidding procedures.

“The current procedures for bidding and contractor selection apply uniformly to all projects, regardless of their scale,” Tuan said. “I believe that these procedures should be tailored to the scale of each project, allowing smaller projects to follow simpler processes, which would enable faster completion.”

Earlier this month, PM Chinh issued another official telegram outlining key tasks and solutions for promoting growth, controlling inflation, and stabilising the macroeconomy in the third quarter of 2024. Among these tasks, accelerating public investment disbursement is ranked second only to continued support for businesses and individuals.

“Public investment disbursement must be further accelerated and act as a catalyst to attract more private investment and strengthen public-private partnerships,” the telegram said.

According to the Ministry of Finance, the total sum for 2024, as allocated and carried over from previous years, is estimated to reach nearly $32.3 billion. However, it is estimated that total disbursement in the first seven months of this year reached about $10.2 billion, or 31.61 per cent of the year’s plan.

The government has also tasked the Ministry of Planning and Investment with researching further amendments to the Law on Public Investment, Law on Investment, Law on Bidding, Law on Public-Private Partnership Investment, and Law on Enterprises, as well as other regulations that are no longer suitable for current realities. All of these will be consolidated into a law revising multiple laws, overseen by the Ministry of Justice.

Jonathan Pincus, senior international economist at the United Nations Development Programme in Vietnam, highlighted the significant role of provinces, noting that they account for 84 per cent of public investment and have near full authority to select and implement projects.

“In the absence of a national system for feasibility assessment and ex-post project evaluation, it is difficult to estimate the contribution of public investment to economic growth, improvements in living standards, or access to essential services,” Pincus said.

He pointed out that provinces often favour small projects that can be completed quickly to meet expenditure targets.

“The implementation of larger projects of national and regional importance is often delayed by negotiations between various local and national agencies and weak coordination among provinces,” he added. “Strengthening regional planning and evaluation mechanisms, as required under planning laws and regulations, should be a priority.”

Nguyen Ba Hung, principal country economist Asian Development Bank in Vietnam While Vietnam’s economy has shown resilience in the context of global economic uncertainty, near-term prospects through 2024 and beyond still face heightened risks coming from the external environment. In this context, it is crucial that policymakers stay vigilant for timely responses, while efforts to boost the domestic economy both through short-term support measures and longer-term reforms. The government has been proactive in policy response in the right directions, both in fiscal and monetary measures. Regarding the key growth drivers of the economy in 2024, that the biggest priority should be placed on increasing public investment disbursement. In 2023, as much as $30 billion of public investment was planned, of which $26 billion has been disbursed already. In 2024, an estimated $27 billion for this type of funding has been budgeted, with the government hoping that 95 per cent of which will be disbursed. If this becomes true, it will really boost demand in the market, lead to employment generation, and foster overall economic activities. Maintaining the momentum of public investment will be crucial because that is what is going to rejuvenate economic activities, generate employment, and put more money in the hands of people to enhance domestic consumption. Currently, inflation remains low and there is liquidity in the hands of people. Domestic consumption needs to remain strong to offset the adverse impact of export-related activities. For long-term sustainable development, the government should double down on reform efforts to improve the business environment, especially in the context of green transitioning, addressing climate change and private sector development, and building on continuous strength in foreign direct investment attraction.