Friday, 15 Dec 2017

Motivation to attract investment for development

Updated at Thursday, 05 Oct 2017, 08:08
The Hanoitimes - Experts said, recently, the business environment of Hanoi has been significantly improved. The PCI Index in 2016 has increased 10 places and ranked 14 out of 63 provinces. This is one of the conditions for Hanoi to attract investment for development.
At the Conference “Hanoi 2017 – Cooperation and development”, Hanoi has approved 48 projects with total capital of 74 trillion VND. At trade promotion events in Vietnam and abroad, Hanoi has signed memorandum of understandings (MOUs) with foreign partners at value of 5.2 billion USD; 15 MOUs with local partners for value of 135 trillion VND. However, capital demand for the development of Hanoi remains large, as such, in the period of 5 years 2016 – 2020 of Hanoi, the city will need  approx. 110 – 114 billion USD (nearly double the period 2011 - 2015). 

At present, investment for Hanoi is coming from three main sources: public investment, ODA fund and social resources under the form of Public – Private Partnership (PPP). However, the state budget is limited and ODA fund is reducing. With the social resources, Hanoi has put up effort in improving the investment environment to call for enterprises with high financial capabilities. Therefore, in order to implement efficiently infrastructure projects, Hanoi need to focus on solutions to mobilize financial resources, with an aim to meet the investment demand of priority projects. The Chairman of Hanoi People’s Committee Nguyen Duc Chung said, any investors want to invest in Hanoi have to be qualified for the following criteria: commitment for capital; deposit a part of the investment fund, so when the implementation process is slowing down and not meet the requirement, investors will lose the deposited fund; ensure the project quality to meet technical specification.

According to the Decree No. 63/2017/ND-CP stipulates some preferential mechanism and financial policies for Hanoi, the state budget of Hanoi is identified based on a higher state budget allocation compared to other cities/provinces under direct management of the central government. However, with regard to regulation for investment mobilization for development, for some large scale projects under fields of environment, transport, inland water under the management of Hanoi, Hanoi has to report to the Government and the National Assembly to support the projects from the state budget. 

In recent months, in oder to speed up process of some priority transport projects, Hanoi has requested the government to apply preferential mechanism policy. Specifically, the proejcts of constructing bridges over Red and Duong river with total investment of 57 trillion VND, Vinh Tuy bridge phase 2 with investment of 2.5 trillion VND, the completion of ring road No. 2,3, 3.5 and 4 with total investment of 66 trillion VND.

With regard to this matter, former vice director of National Economic Institute – Dr. Vo Tri Thanh said, the number of projects Hanoi going to implement in 2017 -2020 are many. As such, in order for these projects to be efficient, it is necessary to review and choose projects in the order of importance to be suitable with the financial capability. In term of applying for preferential treatment, it is necessary to be considered to facilitate the implementation progress. “Preferential treatment has to be within the legal framework, which is to ensure transparency and clarity. Based on this foundation, Hanoi need to request the government to remove difficulties and approve the city with preferential financial mechanism. In reality, Hanoi has proposed some preferential treatment and policies to remove difficulties in the current Law of Capital, which allows Hanoi to study the development of the modal urban government” – Vo Tri Thanh said; at the same time, he warned: “but if Hanoi is approved with preferential treatment, the city must prove it not only improve the image of the capital, but also spreading the positive effects to other cities”.
Nguyen Tung - Thuan Hung
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