BT or Not BT: Vietnam’s Infrastructure Development Dilemma

On 29 April 2026, Ho Chi Minh City broke ground on a new administrative complex in the Thu Thiem urban area, to be built by Sun Group under a Build-Transfer (BT) contract. The project carries a price tag of approximately VND29,600 billion (US$1.2 billion), with a 26-storey tower as its centrepiece, designed to house up to 8,000 civil servants when completed in 2028. It is one of four major BT and Public-Private Partnership (PPP) projects simultaneously launched in the city that day, with a combined value of VND142,000 billion (US$5.5 billion). The spectacle prompts an obvious question: why is a model that was formally prohibited less than five years ago, precisely because of its corruption risks, once again being deployed at the national scale?

The BT model’s mechanics are deceptively simple. A private investor finances and constructs public infrastructure, and the state repays them, typically with land. For the administrative complex mentioned earlier, for example, Sun Group proposed to be compensated with 10.5 hectares of prime land in Thu Thiem, plus VND773 billion (US$29.4 million) in cash. To prepare for the new wave of BT projects, Ho Chi Minh City authorities have set aside 33 plots of prime land to pay BT investors.

The problem lies in this exchange. Construction costs can be inflated, maximising the value of the land the investor receives in return. Furthermore, the compensatory land can be underpriced, effectively gifting large plots of prime real estate to well-connected parties. The result is a double-entry corruption opportunity—one that has historically enabled large-scale graft. Auditors and land management experts have long flagged that BT projects are easily abused by investors. In Hanoi alone, the Government Inspectorate found that various BT projects implemented during the 2015–2020 period were vehicles for serious corruption, generating losses running into trillions of Vietnamese dong.

The model’s previous heydays came during the 2010s, when BT contracts proliferated, often channelled to investors with close ties to officials. When the late General Secretary Nguyen Phu Trong’s anti-corruption campaign gathered pace in the late 2010s, these projects became emblematic of the cronyism the government had committed to dismantling. The 2020 Law on Public-Private Partnerships, therefore, explicitly excluded BT from the PPP framework altogether, citing its negative consequences and the structural absence of adequate supervision over land transfers. The ban was presented as a reckoning, not merely a technical revision.

Yet BT is back, and on a considerable scale. From July 2025, the model was formally reinstated, unlocking a cascade of major projects. In December 2025, Vietnam simultaneously launched 234 projects with a combined investment of VND3.4 quadrillion (US$129 billion), many of which use the BT model. In April 2026, the government issued a resolution to streamline BT procedures, providing a legal framework for dozens of pending schemes. The breadth and pace of these commitments signal not a tentative pilot but a deliberate strategic shift.

In the current context, reviving the BT model is a defensible, if uncomfortable, choice. The question for Vietnam is not whether to use BT, but how to govern it.

Several factors explain this reversal. The most fundamental is fiscal. Infrastructure development has been identified as a core pillar of General Secretary To Lam’s vision for double-digit annual GDP growth and high-income status by 2045. Yet this requires massive resources. For the 2026–2030 period alone, the government’s medium-term public investment plan amounts to a staggering VND 8.22 quadrillion (US$316.5 billion), making private capital not merely desirable but essential if Vietnam is to meet its development targets without weakening its fiscal standing.

Speed is a second, equally critical rationale. The National Exhibition and Convention Centre stands as the defining exhibit. Completed by Vingroup in under 10 months, and now ranked among the world’s top ten exhibition facilities by scale, the project demonstrated what a disciplined private conglomerate can achieve when freed from the bureaucratic inertia and procurement bottlenecks that routinely afflict state-managed works. This is a particularly significant point in Vietnam, where public investment projects are notoriously prone to delays and cost overruns.

A third logic, less discussed but equally important, lies in Vietnam’s ambition to cultivate world-class private corporations. Channelling large infrastructure contracts to Vingroup, Sun Group, and their peers is not simply about getting buildings erected more quickly. It is also an act of industrial policy — one that builds corporate scale, project management expertise, and financial depth in companies that To Lam envisions as future global competitors. BT contracts are therefore as much about constructing corporations as they are about constructing highways and bridges. 

That the Communist Party of Vietnam understands the risks embedded in BT is not in doubt. The decision to redeploy the model reflects a clear hierarchy of priorities: economic development over anti-corruption caution. To Lam’s approach to the latter has always been pragmatic. Right after becoming Party chief in August 2024, he stated plainly to officials that “we must not hinder economic development in the process of fighting corruption.” The implicit reference point is the Nguyen Phu Trong years, when officials and business leaders froze in the face of prosecution risk, contributing to a period of economic underperformance. To Lam has absorbed the lesson that corruption-fighting and growth can conflict, and when they do, he has signalled that growth takes precedence.

In the current context, reviving the BT model is a defensible, if uncomfortable, choice. The question for Vietnam is not whether to use BT, but how to govern it. This requires rigorous, independent oversight of construction valuations and compensatory land pricing, the two mechanisms through which BT graft flows. It also demands that contracts be distributed across a wider pool of capable investors rather than concentrated in a handful of conglomerates, both to diffuse economic benefits and to reduce systemic exposure to any single actor.

Vietnam abandoned BT once because it proved too easy to exploit. Whether it can now manage the model with sufficient discipline to prevent history from repeating itself will be the defining governance test of the To Lam era. If BT is to serve Vietnam’s ambitions rather than subvert them, the state must prove it has built not only better infrastructure, but also stronger institutions.

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