Criteria For Infrastructure Project Selection: A Case Study In Cantho City, Vietnam

Vietnam has been successful in expanding access to infrastructure services over the past twenty years. The investment in infrastructure spreads all over the country, supports to growing economy, and expands the basic services to poor rural areas. Entering WTO since October 2006 offers Vietnam, new chances in economic expanding and opens new challenges for infrastructure as well. Dealing with high demand in infrastructure services, the Vietnam’s authority tries to attract capital from many sources of funds in order to expand and invest more infrastructure projects in both central and local government. However, the investments are still spreaded, uncompleted and the maintenance works are also neglected. One of main reasons is weakness and shortcoming in planning, selecting and budget allocating process. Setting project selection between different projects commonly accord with the absence of economic criteria. It will be a wasting of resource to carry out the project that brings the lower socio-ecomomical benefit compared with others. The efficiency and effectiveness of selecting infrastructure projects are hence the main concern of local authority.

Nguyen Thi Xuan Dan made a study to develop infrastructure prioritization criteria for each kind of infrastructure project at local government in Vietnam. His study focused on (1) in-depth understand laws and regulations for transportation project investment then specify shortcoming of regulations existed, (2) investigate and evaluate the current project selection process in Vietnam in term of criteria as well as procedure of so that its strengths and weaknesses can be identified; and (3) develop and propose criteria for each step of infrastructure project selection process in Vietnam.

He found out that there are many laws and regulation related to the infrastructure project investment. It consists of four main laws that are Law on Organization of People’s Councils and People’s Committees, Law on Budget, Law on Construction and Law on Investment affect the making investment project. Relevant laws include Law on land, Environment law, Law of tendering and Technical standards and grad of the project in Vietnam. In addition, there are a large number of Decrees, Circulars, and Guidelines for investing infrastructure project in Vietnam. In the review of laws and regulations and interview information, the three short comings of current regulations were identified: (1) taking long time to recommend, adjust when getting problems in large mechanism of Vietnam government with vertical horizon administration, (2) limitation of updated regulation documents, and (3) and deficient in good coordination of circulars and guidelines.

His study also pointed out some weaknesses that still exist in the current selection process such as (1) there is no establishment of criteria, guidelines and regulations for prioritizing project. Without prioritization, the project selection passes the conceptual and investment elaboration stage difficultly and complicatedly, (2) the setting up of criteria for project selection process is also not paid attention. The selection of project is based on this importance factor and project policy compliance under budget availability.

His thesis abstract is copied and posted

ABSTRACT

In accordance with the fast growing of socio-economic development in Vietnam, the demand for enhancing and expanding the infrastructure structure is very high. However, under budget limitation of developing country, local government should have an adequate selection to possibly pick the most promising project for investment. The objective of this study is to propose the criteria for selection process of infrastructure project of local government. In order to achieve this target, the investigation of existing project selection process was carried out to identify strengths and weaknesses three stages conceptual, investment project elaboration and approval stage of this process. Data collection related to the investigation was collected from legal documents, working report and interview information from Cantho, Vietnam. Using secondary data analysis, the study specifies five factors influencing the project selection. Since, the identification of criteria from these factors for each stage of selection process was eight, eleven, and six criteria should carefully consider in conceptual stage, investment project elaboration stage, and approval stage. Finally, based on the evaluation of developed criteria, recommendations are conducted for improving the criteria of infrastructure project of local government in Vietnam.