Foreign investor to join financial center project in HCMC

Jun 15,2017

HCMC will cooperate with a global financial group to build large financial centers in a move to attract foreign investment capital into key projects in the city, said city vice chairman Tran Vinh Tuyen.

The city will need up to US$40 billion for urban infrastructure, environment, health, education and manpower training projects as part of its seven breakthrough programs from now to 2020. Therefore, the city is calling for investments from various sources as its budget cannot afford this hefty capital demand.

The city government has held talks with the global financial group over construction of financial centers, Tuyen said at a meeting with department leaders on June 13.

Initially, this company would seek foreign capital for an extension metro line connecting HCMC and neighboring Binh Duong Province, Tuyen said but made no mention of the foreign group’s name.

Currently, the city relies on four financing sources to implement infrastructure development projects, namely the State budget, official development assistance (ODA) loans, bond issues and foreign investments.

According to the HCMC Department of Planning and Investment, the city’s total investments amounted to VND1,193 trillion in the 2011-2015 period, with an average annual growth rate of 9%. This amount accounted for around 30% of gross regional domestic product. In which, VND 250.8 trillion (21%) came from the State, VND 729.4 trillion (61%) from the non-State sector, mostly enterprises, and the remainder from other sources.

The city favors public-private partnership (PPP) when it comes to executing infrastructure projects. There are 20 build-transfer (BT), build-operate-transfer (BOT) and build-own-operate (BOO) projects already signed with a combined value of around VND 67.2 trillion.

In recent years, some foreign groups have expressed interest in developing a financial center in HCMC. Malaysia’s Berjaya once suggested building a financial center in District 10 before France’s Vinci Construction in October 2016 proposed cooperating with Berjaya to carry out the US$930-million project.

Three U.S. investors have recently suggested building a financial complex covering 11 hectares in Thu Thiem new urban area in District 2 with a total investment of US$4 billion.

According to financial experts, the city will contribute greatly to the nation’s gross domestic product, industrial production, export-import revenues and budget collections. The city is poised to become the financial center of Vietnam.

Source The Saigon Times