Govt eyes PPPs on public infrastructure
Govt eyes PPPs on public infrastructure
The government plans to develop a legal framework to support public-private partnership (PPP) investment, hoping that the move will make development of public infrastructure more transparent and efficient, according to an official from the Ministry of Planning and Investment.
The Investment Promotion Department's Legal Division Director Ms Thavichanh Thiengthepvong said the ministry was drafting a public-private partnership investment scheme, creating opportunities for the private sector to take part in the development of public infrastructure such as roads and bridges.
“One of the advantages of public private partnership projects is transparency. All of the companies which want to take part in the project must go through a bidding process,” she told Vientiane Times at a workshop on investment promotion policy earlier this month.
Ms Thavichanh said she expected the legal framework would be put into practice over the next few years, in an effort to make the development of public infrastructure projects more transparent and efficient.
The Lao government promulgated an investment promotion law in 2010 but the law does not provide a clear framework on PPP projects, creating difficulty for the authorities to boost PPP investment in the construction of public roads and bridges.
In the past, the government allowed the private sector to invest its own funds to develop public infrastructure first and made an agreement with the investor to pay off the debt later. However the investment scheme was made without a bidding process causing the cost to be too high.
As part of measures to curb rising public debt, the government has cancelled the investment scheme and has assigned the Ministry of Planning and Investment to develop concrete measures to ensure that public investment must undergo a bidding process in accordance with law.
There have been a number of successful developments using public private partnership investment schemes in the construction of hydropower plants, including the Nam Theun 2 project.
Officials from Ministry of Public Works and Transport said the government had also received assistance from World Bank to conduct a feasibility study to upgrade Road No. 13 North from Vientiane to Vangvieng and Road No. 13 south from Vientiane to Pakxan, under a PPP scheme.
The officials said the development project was feasible as the number of cars is rising in the country. Upgraded roads will also improve transportation of goods and road safety.
The PPP road project will collect money from road users so as it can generate income to pay off debt.
vientiane times
