High investment rates and uncertain profits are the two reasons why investors do not want to inject money in the waste treatment industry, despite investment incentives offered by the government.
Six years ago, the government promulgated Decree No 04 stipulating investment incentives offered to environmental protection activities. The legal document was was an important breakthrough for the treatment of solid waste.
Many investors, domestic and foreign, attracted by tax incentives, preferences in bank loan access and land use fees, expressed their wish to invest in the field. Many have received investment licenses.
However, the majority of the projects remain unimplemented or have encountered problems during the operation.
A number of waste treatment plants built at the investment cost of tens of billions of dong have reportedly encountered problems.
The VND33 billion plant in Song Cong Town invested by the Thai Nguyen provincial construction department is an example.
Just six months after it was put into operation in May 2011, a domestic business sent words intimating that it wanted to buy the plant for VND1 billion. However, the deal failed.
The VND33 billion solid waste treatment plant on Ly Son island of Quang Ngai province showed problems just two weeks after operation.
With low capacity, the plant could only deal with 1/10th of the daily waste volume in the district, or one ton of garbage.
The decision by the HCM City authority recently to move the rubbish waste at the dumping ground No 3 in Cu Chi district to the Da Phuoc Waste Treatment Complex, in Binh Chanh district, has become a hot topic of discussion.
An analyst said that though many waste treatment projects had been licensed, there were only two key projects in the country.
These include one in HCM City developed by Vietnam Waste Solutions (VWS) and the other in Da Nang City which opened in June 2015.
When asked why the licensed projects were not operating, Nguyen Van Tuan, chair and general of the Vietnam Environment JSC, said the problem was Decree No 04.
Under the Decree, investors would receive 10 percent of capital needed from central agencies, 40 percent of capital from local authorities and the remaining 50 percent from banks, which would lend up to 90 percent of capital needed.
However, in fact, the local authorities only agreed to give support in land allocation, while commercial banks refused to provide loans.
Source: vietnamnet.vn