The Finance Ministry has proposed a regulation on foreign aids-funded projects that aims to prevent further construction delays, which have plagued a number of recent projects.
Speaking to Vietnam News Agency, Nguyen Thanh Do, head of the ministry's Department for Debt Management and External Finance, said the government needs a regulation which will ensure that all procedures and pertaining to investment and site clearance for infrastructure projects be completed before international donors finalize loan agreements.
His proposal came after Japanese contractor Tokyu Corporation demanded Hanoi authorities to pay it US$10 million in compensation for the delay of its project.
The Japanese firm said it has been waiting for the site to be cleared where it has been contracted to build a road that would lead to Nhat Tan Bridge, claiming the delay cost has cost it money.
The compensation, if paid, would be the first of its kind in Vietnam for official development assistance (ODA)projects.
Tardy site clearances have also delayed the Hanoi-Thai Nguyen Highway project and one to build a road to connect Noi Bai International Airport and Nhat Tan Bridge. Japan is funding both projects.
Do said the proposed regulation could cause ODA loans to be used more effectively and pointed out that Vietnam has recently seen a reduction of low-interest loans from foreign donors.
Contributing factors to the decline in ODA include the global economic crisis, the fact that Vietnam's economy is growing and that Vietnam is now considered a middle-income nation, he said.
International donors have lent Vietnam a total of $78 billion in ODA since 1993.
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