Gov't warned against profligate, lopsided spending on transport infrastructure

By Mai Ha, Thanh Nien News

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Trucks and cars drive on a newly built bridge on a road linking Hanoi with northern Vietnamese provinces in the suburbs of Hanoi. Photo: AFP Trucks and cars drive on a newly built bridge on a road linking Hanoi with northern Vietnamese provinces in the suburbs of Hanoi. Photo: AFP

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As the government plans to earmark more than VND1 trillion (US$48 billion) for transport infrastructure over the next five years, many experts are urging caution, saying Vietnam cannot afford it.
Speaking at a conference held by the Vietnam Institute of Economics and the Bank for Investment and Development of Vietnam on Monday, a senior transport ministry official admitted the government would be able to afford only 28 percent of the amount.
But according to Ministry of Planning and Investment's estimates the rate is even lower – only around 7 percent.
Nguyen Duc Kien, vice chairman of the National Assembly's Economic Committee, said since the government cannot afford such huge sums and private investments would not be a “magic” key to the funding issue, the government needs to focus on sectors with better efficiency instead of spreading itself too thin.
La Ngoc Khue, a former deputy transport minister, agreed, saying the government needs to review the entire transport infrastructure which is "lopsided."
Roads are always the top priority, while railways and waterways are almost "forgotten," which is the opposite of the trend around the world, he said.
For instance, not a single meter of new rail track has been laid in the past 40 years, he said. As for waterway projects, not only are they too few but also most have been delayed for years, including the expansion of the sole channel between Ho Chi Minh City and the Mekong Delta, he said.
Worse, local transport infrastructure has not been well developed, even though it has received huge investment.
Spending on transport infrastructure in Vietnam is equal to around 4-5 percent of the country's GDP over the past two decades, compared to the global average of 2-3 percent, Huynh The Du, a lecturer for the Ho Chi Minh City-based Fulbright Economics Teaching Program, said.

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