As Vietnam’s demand for investment in infrastructure continues to surge, from transport, urban development, healthcare and education to digital infrastructure and energy, the biggest question is no longer “whether to do it or not,” but “where to get the money to do it.”
The state budget cannot shoulder all these demands when fiscal space must also prioritize social welfare, national defense and macroeconomic stability.
As the Government and policymakers seek ways to mobilize off-budget resources for infrastructure, BT projects should be viewed as a public finance instrument rather than merely a governance risk.
According to experts, legal regulations have undergone many changes to control the risks of BT projects. The legal framework has been adjusted towards tightening the process and increasing transparency about the use of land funds and public assets when paying BT investors.
First, an important turning point was the enactment of the 2020 PPP Law. When this law took effect, BT contracts no longer belonged to the group of PPP contracts applied to new projects. This was not the “death” of BT, but a temporary suspension to review and restructure the legal mechanism, avoiding the repetition of previous inadequacies when BT operated in a legal environment that was not tight enough.
Second, the biggest risk of BT in the past was directly related to using land funds to pay investors. This issue is now strictly controlled by the 2024 Land Law, which clearly stipulates the principle: all land funds used for payment must be valued according to the market mechanism.
Along with that, the 2017 Law on Management and Use of Public Assets and guiding decrees have added mandatory regulations on independent price appraisal, auditing, and public disclosure of public asset use plans to pay investors. This helps significantly limit the risk of undervaluing public assets if the process is implemented correctly.
Another important change point is the strengthened monitoring role at many levels. The post-audit mechanism is now much more rigorous than in the previous period, making the legal risk for implementers higher if they violate regulations.
Removing the bottlenecks of land valuation, payment mechanisms
The principle of “equivalent value” has been clearly stipulated in Decree 257/2025/ND-CP.
Of course, valuation needs to consider many possible impacts; if land valuation is too high, the state itself will push up land prices in the market, making it increasingly difficult for people to access housing. The experience of some countries is that instead of high land valuation, taxes are increased to have long-term revenue.
“When land prices do not correctly reflect market prices, the entire philosophy of BT value exchange is distorted: the State risks losing public assets, while investors doubt the transparency of the project. Therefore, to make BT operate healthily again, the problem of valuation must be thoroughly resolved,” Nhan said.
The current foundation is the new legal framework from the 2024 Land Law, which has fundamentally changed land valuation thinking: abolishing the land price frame mechanism, while innovating the method of building land price frameworks according to market principles based on actual transaction data, land databases, and standardized appraisal methods.
There are still concerns that BT projects lack a fully unified mechanism for determining infrastructure construction costs, creating the need for more transparent and realistic cost-control tools.
According to Nhan, the claim that “there is no unified mechanism for determining construction costs in BT projects” has merit when looking back at earlier periods. When project costs were not controlled according to market standards and clear technical criteria, the exchange mechanism between “infrastructure value” and “land value” became highly vulnerable to distortions.
“To make BT transparent, it is not enough to value land properly, infrastructure itself must also be valued correctly,” he said.
Nhan argued that the legal foundation for controlling construction costs is now more complete, especially following the 2014 Construction Law, amended in 2020, along with the system of cost norms, pricing frameworks and investment benchmarks regularly issued and updated by the Ministry of Construction.
He believes that BT costs should be controlled from the project preparation stage through standardized investment benchmarks. Every BT project should be compared against standard investment costs for each category, such as urban roads, bridges, hospitals or schools. Projects exceeding benchmark thresholds must provide independent technical explanations.
Tran Chung