The Ministry of Finance recently revealed a draft decree allowing the use of public property to make payment to investors that implement construction investment projects in the form of build-transfer (BT projects).
According to the drafter, the draft is designed to implement the Law on Management and Use of Public Property, which will take effect in early 2018.
Public property would be used to make payment to investors that implement construction investment projects in the form of build-transfer__Photo: Internet
Under the draft, public property includes land, infrastructure facilities and property used for the management and provision of public services and assurance of national defense and security by state agencies, organizations and units.
The use of public property to make payment to investors would be required to adhere to the principle of parity and difference offsetting between the value of BT projects and value of the property used to make payment to BT project investors that would be selected in accordance with the bidding law.
The value of public property used to make payment to BT project investors would be determined based on market prices at the time of making payment and included in the state budget estimates under the state budget law, the draft says.
Meanwhile, the value of a BT project covers expenses for ground clearance (if any); construction costs; equipment, project management and construction investment expenses; loan interests; and other related expenses.
The determination of these expenses must comply with the construction investment law and the value of a BT project would not be changed after being approved by competent state agencies, except where there is a written permission for adjustment of the scale, technical design and loan interests of such project.
According to Nguyen Van Duc, General Director of the Dat Lanh Real Estate Company, the current mechanism of appointment of investors in BT projects is to blame for the loss of public property. He suggests solving the problem of “group interests” before implementing BT investment projects nationwide.
Sharing the view, Bui Quang Tin, CEO of BizLight business school, said unclear mechanisms of determination of public property value and bidding may lead to the development of “group interests”. If selected investors are financially incapable, the implementation of BT projects will be at high risk of emerging bad debts, he said.- (VLLF)