Infrastructure investment still lags

Infrastructure investment still lags

Lawmakers, as well as economists and lawyers, have called for a better legal framework for Public-Private Partnerships (PPP) in Viet Nam, where demand for public infrastructure is high.

During a seminar yesterday held in HCM City and organised by the HCM City Institute for Development Studies, Dr Tran Du Lich, a member of the National Assembly, said the country needed a law with transparent and clear regulations on the PPP form of investment.

Without such a law, local and foreign enterprises believe it is too risky to invest in infrastructure and public-service projects.

The State budget is limited for such projects, which take up about 20 to 30 per cent of investment demand.

Lich said the country should develop a better policy to attract local and foreign investment in infrastructure facilities, especially urban transport systems.

HCM City has used PPP investment to build infrastructure, with several PPP projects carried out under the BOT (Build – Operate – Transfer) form. Interest-rate subsidies were also given as part of the PPP contractual agreements.

However, several issues about the relationship between State and private enterprises during the investment project, as well as details about preferential policies, need to be clarified and made more specific in regulations and laws.

Prime Minister Nguyen Tan Dung's Decision No. 71, which dealt with attracting PPP investment, was not enough to attract investors, according to Lich.

Before the decree was issued, about 100 projects under PPP, which were either BOT or BT (Build – Transfer), were not successful because there was an insufficient legal foundation, which easily discouraged investors.

Many seminar participants said the private sector should partner with the State in developing infrastructure, as the State budget for basic development was limited and funds from Official Development Assistance had decreased.

Investment demand, especially for the transport sector, is very high in HCM City and the country in general.

Between 2011 and 2025, the city needs about VND880 trillion (US$42 billion) for infrastructure development, while the entire country needs US$160 billion for building transport system from the 2010 – 2020 period.

Nguyen Trong Hoa, head of the HCM City Institute for Development Studies, said it was necessary to develop measures to attract investment funds from other sources, as the State budget and ODA funds were shrinking.

An expert at the institute, Hoang Thi Kim Chi, agreed, saying that the Government should develop a comprehensive legal framework as well as clear and appropriate policies to encourage investors.

Several public projects have been carried out under PPP in HCM City, including Binh An, BOO Thu Duc, Kenh Dong and Can Gio water treatment plants. The Phu My Bridge, Dau Giay – Phan Thiet Freeway and HCM City – Trung Luong Freeway projects were all public-private partnerships.

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