At the meeting with the Steering Committee for Public – Private Partnership (PPP) Investment, Deputy Prime Minister Hoang Trung Hai, also the head of the committee, appreciated the efforts of the Ministry of Planning and Investment, other ministries, agencies and localities for completing the institutional framework for PPP, preparing resources for executing PPP programmes, and establishing the list of potential PPP projects. However, the number of PPP projects is yet to mirror the actual need. Accelerating the progress of potential projects
PPP investment form is considered a decentralised movement where the State reduces its role and transfers its functions to the private sector to exercise public duties (i.e. investing, building, restoring, upgrading, expanding, managing and operating public works and services). This is considered an optimal form of investment cooperation and high-quality public services provision, which is beneficial to both the State and citizens because it utilises private financial resources and management while ensuring benefits for the people.
ADB Country Director for Vietnam, Tomoyuki Kimura said “Attracting private investment, mainly through the PPP method, will not only help fund projects but also get access to international expertise and technology that improves the efficiency and quality of public services. A reinforced legal framework for PPP will be able to enhance the comprehensiveness and quality of public services provided.”
According to the Prime Minister’s Decision 631/QD-TTg, among 125 national projects Vietnam will call foreign investment capital for until 2020, more than 40 projects will be carried out in the PPP form, mainly engaged in transport infrastructure, urban infrastructure and public administration.
According to the Bureau of Public Procurement under the Ministry of Planning and Investment, provinces and cities across the country have proposed 180 PPP projects and the ministry is considering 10 feasible projects. Currently, three projects are choosing investors, including the US$680 million Dau Giay – Phan Thiet Expressway, and seven potential projects are completing investment study documents. Two projects will be landed in the central region, including the US$25 million Danang City Bus System and the US$22 million Nhung water supply system (Quang Tri province.)
In early June 2014, the Quang Ninh Provincial People’s Committee announced a list of 67 PPP-pilot projects with the aim of extricating institutional and policy problems to attract external resources for urgent projects. Most projects are involved in technical and cultural infrastructures, housing facilities, office buildings, hospitals, schools and information technology. Among these projects, 6 will be implemented in the form of “public leadership – private administration”, 48 are in the form of “public investment – private management,” and 13 are in the form of “private investment – public use.”
At the meeting with the Steering Committee for Public – Private Partnership Investment in late May 2014, Deputy Prime Minister Hoang Trung Hai urged a quicker progress of 10 potential PPP projects. He noted that PPP projects often require a long-time operation and face complex problems. Hence, central and local agencies need to have well-prepared plans for personnel and expertise, particularly in economics, technology, finance and law, and set up specialised units in charge of PPP projects.
Unlimited involvement of State enterprises
Deploying the PPP model is one of the most important investment restructuring directions now. In fact, after more than three years of enforcement, Decision 71/2010/QD-TTg of the Prime Minister is a progressive step to speed up PPP projects in Vietnam. The word “pilot” makes investors feel insecure and uncertain. Meanwhile, pilot fields are limited; the State capital contribution is low (no more than 30 percent); approval process is complicated; and no common legal framework for PPP projects is established.
To overcome these shortcomings, the Ministry of Planning and Investment is focusing on completing the draft decree on PPP investment in a bid to ensure the consistency and effectiveness of PPP investment attraction policies.
The decree will address existing regulatory shortcomings, supplement PPP investment fields, and provide State shares in PPP projects. The establishment, ratification and disbursement of State funds for PPP projects is designed on the basis of current principles and regulations on management of State budgets spent on development investment as well as provisions on management and use of state assets. The draft decree also designs a specific mechanism for State participation in line with international practices. The new ruling also adds new contents concerning State involvement in support of project implementation. These rules are basically designed on the basis of State fund planning, management and utilisation principles while taking into account relevant provisions of the Draft Law on Public Investment.
Remarking on some contents in the draft decree on PPP investment, Deputy Prime Minister Hoang Trung Hai agreed on the draft decree approach where special cases will be reported to the Prime Minister for consideration and decision. He also agreed on State capital utilisation plans which will be proposed by project investors who are free to propose suggestion contents.
In this regard, he said State enterprises are being equitised and they are thus not prohibited from taking part in PPP projects. In addition, he agreed to allow investors to make feasibility study reports in case they propose investment projects and competent State agencies are responsible for appraising and approving these projects under the laws. With respect to investment assurance and support, the Deputy Prime Minister agreed not to specifically specify the application of foreign laws in the draft decree on PPP investment. Concerning the guarantee of foreign currency exchange, he affirmed the guarantee of foreign currency balance for important government-backed projects and programmes. The draft decree will not provide contents relating to loan guarantee and minimum revenue guarantee.
PPP is a consistent policy. The Government of Vietnam is taking positive steps to build appropriate mechanisms, facilitate investors to take part in PPP, and expand this model.
Nguyen Huy Hoang
Đăng ký: VietNam News