T&T Group and the desire to connect infrastructure

Vietnam is the leading country in Asia in infrastructure investment, accounting for 5.7% of GDP/year. Although the majority of the investment still comes from state resources, more and more large private economic groups are participating in infrastructure investment, sharing the burden on the state budget.

From logistics, highways to airports On September 14, Vinh Phuc ICD Logistics Center (SuperPortTM Vietnam) - the first port of the smart logistics network in the ASEAN region announced its new vision in Vietnam . The joint venture project between T&T Group (Vietnam) and YCH Group (Singapore) built in Vinh Phuc, with the ambition to develop into an important center connecting the supply chain between China and Southeast Asia, with the goal of zero net emissions by 2040. Mr. Tran Duy Dong, Chairman of Vinh Phuc Provincial People's Committee, expects the project to improve the quality of logistics services, dry ports for domestic goods clearance, helping to reduce costs, customs clearance time, and transportation of goods...

T&T Group và khát vọng kết nối hạ tầng — *SuperPortTM Vietnam announces new vision with commitment to achieve net zero emissions by 2040.*

A few days earlier, in early September, T&T Group started construction of Nam Phuc Tho Industrial Cluster - Phase 1. With a scale of 41.7 hectares and a total investment of 780 billion VND, this is currently the largest industrial cluster in the capital, aiming for sustainable development, pioneering the development of clean industrial clusters. Instead of investing in one field, T&T Group is expanding its ambition towards diverse infrastructure projects, but very consistent, demonstrating a strategic vision of building its own infrastructure ecosystem - something that only a few private enterprises in Vietnam are doing. In July, the joint venture of investors T&T - Cienco4 and Quang Tri province started construction of Quang Tri Airport project, with a total investment of more than 5,800 billion VND. This is the second airport invested by the private sector after Van Don (Quang Ninh). Before Quang Tri, after more than 5 years since Van Don airport was put into operation, no airport had successfully implemented investment under the PPP (public-private partnership) method. In fact, the door for private investors to enter the airport is very narrow, but the groundbreaking of Quang Tri Airport shows the great determination of T&T Group. Mr. Do Quang Hien - Founder, Chairman of the Strategy Committee of T&T Group said that he had many times wondered what to contribute to Quang Tri, a sacred land with many relics associated with wars. Investing in Quang Tri airport not only serves the goal of promoting socio-economic development, but is also a project to continue and pay tribute to the heroic land, while attracting investors to this land, contributing to "opening the sky", helping Quang Tri take off.

Within just 2 months, T&T Group has consecutively started 2 infrastructure projects with a scale ranging from several hundred billion to several thousand billion. Identifying infrastructure as one of the core business areas, over the past years, this group has focused resources to participate in investing in this field. Being present since the time when a series of large enterprises in the transportation sector were equitized in 2015 - 2016, T&T Group is currently a major shareholder of Quang Ninh Port, a deep-water seaport with the scale of a national general port and an important regional hub on the key economic corridor of Quang Ninh - Hai Phong - Hanoi. Particularly for key expressway projects, T&T Group is the investor in the Bao Loc - Lien Khuong expressway project (Lam Dong), and is also the only private investor interested in the Hanoi Ring Road 4 project up to this point. Opening a "narrow door" for private enterprises Despite such determination and aspiration, in reality, investment in infrastructure is still a "narrow door" for private investors. For example, the Bao Loc - Lien Khuong expressway project, although it was implemented in 2021, up to now, according to the representative of the investor consortium, the project still has many problems related to the revenue sharing mechanism, the ratio of state investment capital, legal procedures and compensation policies for site clearance, and costs for infrastructure construction in resettlement areas. The representative of T&T Group affirmed that the investor consortium has always shown determination since being assigned the project, but must find the best way to implement the project.

According to Associate Professor Dr. Tran Chung, Chairman of the Vietnam Association of Road Transport Construction Investors (VARSI), private investors are eager to minimize adverse risks during project implementation and operation. In essence, attracting private investment in the public-private partnership (PPP) method must harmonize the interests of all three entities: the state - private investors - people. Although the PPP law has been enacted and removed some major obstacles in the mechanism, according to him, from practical experience, there is still no harmonization of interests, when the disadvantage is still more on the side of investors. "Private investors want to contribute with the state and want to play an equal game as a partner with the state. But sometimes, the authorities are playing the role of a manager rather than a partner. For example, some current BOT projects are not collecting fees, although they have been discussed for many years but have not been resolved, while businesses with heavy debts still have to pay interest on loans," said Associate Professor, Dr. Tran Chung.

According to this expert, one of the major difficulties for private enterprises is capital. Infrastructure projects require a large amount of capital and long loan periods, so it is necessary to form an investment fund for transport infrastructure development, thereby creating a capital flow with preferential interest rates for investors. In fact, the difficulty in attracting private enterprises to participate in investing in large infrastructure projects worth several thousand billion VND is not only due to the shortcomings in the previous mechanism such as the State's contribution not exceeding 50%, risk ratio division, etc., but mainly due to the difficulty in the capital that investors must mobilize. This capital source in Vietnam currently mainly relies on credit capital from commercial banks. One of the three major strategic breakthroughs set by the Party and State is infrastructure, aiming to turn Vietnam into a developed industrial country by 2045. According to the World Bank (WB), Vietnam needs to supplement public investment with many policy reforms to attract private investment in infrastructure, especially in green projects, reducing emissions. Source: https://dantri.com.vn/kinh-doanh/tt-group-va-khat-vong-ket-noi-ha-tang-20240920120258602.htm