Doing away with ‘barter trade’

The good news now is that the HCMC government has decided to do away with the so-called barter trade in infrastructure development. The weird form of barter trade – which is not the preferable non-cash transaction, but the absence of money as a means of payment in modern-day business – has for quite a long time prevailed in not only the city but other parts of the country, under which an investor will develop a certain infrastructure project and is allocated land in return.

For many years, there have been concerns about such an investment form, officially known as the Build-Transfer (BT) format as part of a wider public-private partnership that also includes the Build-Operate-Transfer (BT) format.

In 2013, the Ministry of Planning and Investment voiced its concerns about the BT format, saying there remained many loopholes in regulations governing this form. Ever since, many State agencies have also complained about the waste of the country’s land resources, as vast areas of land have been offered to investors at low prices in exchange for roads and bridges.

Most recently, Ho Duc Phoc, head of the State Audit of Vietnam, told a conference in Hanoi three weeks ago that flaws are awash in the BT format, as it is fertile ground for interest groups due to the lack of transparency. Investors in BT projects have for the most part been appointed by local authorities instead of having to go through a tight screening process or a competition.

In an effort to remedy the situation, the HCMC government has just decided to put on hold all those BT projects still under negotiation, pending a new set of procedures governing this investment format. The key aim, said HCMC Vice Chairman Tran Vinh Tuyen at a seminar last week, is to make the whole process transparent and to ward off all possible irregularities. A report at the seminar shows that as many as 130 investors have submitted schemes to develop infrastructure projects in the city under either BT or BOT, with total estimated capital of VND350 trillion, or roughly US$15 billion.

The city government does not mean to shun the BT format, which is said to have helped the city mobilize over VND20 trillion in 2015-2017 for infrastructure projects. However, land instead of being handed over to investors will be put up for auction, and the money will be used to reimburse such investors. Investors for infrastructure projects will also be chosen via competitive bidding.

Such a move apparently will help enhance transparency in capital construction, and is seen a farewell to the old-fashioned barter trade in this field.

However, more efforts need to be taken to do away with the weird barter trade still rampant in other areas of the economy. Donating a social housing building to get land for a commercial condo project, or building a school or a medical center in a certain region to gain similar privileges are just a few examples of barter trade that should be removed, if real transparency is to be achieved.

Source: english.thesaigontimes.vn

Collect by Nhu Ai SAPUWA