Infrastructure projects require long-term capital flows
At many infrastructure projects, key expressways and inter-regional connectivity routes, the biggest problem for investors is not only technical or construction progress but also long-term capital to implement projects and recover capital over decades.
Mr. Ngo Truong Nam - General Director of Deo Ca Transport Infrastructure Investment Joint Stock Company (HOSE: HHV) said that in the period 2026-2030, the total capital demand for transport infrastructure is about 3 million billion VND, of which roads are about 1 million billion VND to complete 5,000km of expressway; railways are about 1.7 million billion VND, focusing on deploying the North-South high-speed railway line, international connection routes such as Lao Cai - Hanoi - Hai Phong and the urban railway network in Hanoi, Ho Chi Minh City; the rest is aviation and maritime. This scale far exceeds the capacity of the budget and traditional credit, making diversification of capital sources an inevitable requirement.
Without an effective long-term capital mobilization channel, Vietnam's large-scale infrastructure development goal will hardly be realized," Mr. Nam emphasized.
According to Mr. Ngo Truong Nam, bank credit - the main source of capital for PPP transport projects in the past - is facing limitations in terms of credit limits by customer, short-term mobilized capital terms for long-term loans, and risk management requirements, so it cannot meet the needs. Meanwhile, the stock market has characteristics suitable for the infrastructure sector such as long-term cash flow compatibility mechanisms, risk sharing, capital structure optimization when reducing dependence on the budget and banks, and the ability to attract international capital.
However, Mr. Ngo Truong Nam also acknowledged the challenges that still exist when the investment and capital recovery cycle of transport infrastructure projects is often longer than other industries, many projects last from 15 to 25 years. Revenue and capital recovery time depend on macroeconomic factors such as planning, connecting transportation networks. Market awareness of the infrastructure investment model is still limited, while this is a sector of great significance to the economy, prioritized for investment by the Party and State with stable cash flow in the long term.
In particular, some PPP/BOT transport projects have been affected by changes in mechanisms, policies or planning adjustments, leading to fluctuations in traffic volume, revenue and initial financial plans. These factors make financial investors set high requirements for the stability of policies and financial support mechanisms.
From those practices, Mr. Ngo Truong Nam proposed to continue promoting the upgrading of the stock market to strongly attract international capital flows; review and improve regulations related to securities issuance, capital increase and capital mobilization; improve the legal framework for long-term capital mobilization tools such as project bonds, construction bonds, infrastructure investment funds; study adjusting the law on PPP in the direction of increasing risk sharing; and thoroughly handle the existing problems of some PPP/BOT transport projects and ensure the stability of the legal framework.
Promote IPOs, bond markets to increase supply to the market
From the capital problem of infrastructure businesses, it can be seen that the medium and long-term capital needs of the economy in the coming period are very large, while traditional capital channels such as budget and bank credit have certain limits.
Ms. Vu Thi Chan Phuong - Chairwoman of the State Securities Commission - said that to realize market development goals in the coming time, the State Securities Commission has built and completed a system of groups of solutions, focusing on two key groups: supply development and investment demand development.
The supply development solution group will focus on the stock market, bonds and derivatives - important components of the stock market. Accordingly, the management agency will continue to promote the completion of the IPO mechanism associated with listing, support FDI enterprises to conduct initial public offerings and listing, and propose to promote equitization and divestment associated with the stock market.
The State Securities Commission also supports innovative startups, developing trading boards with appropriate standards for innovative startups. The Ministry of Finance has coordinated with the Ministry of Science and Technology to develop regulations defining innovative startups, and the management agency is developing regulations on transactions of these enterprises.
