Getting PPP investment into law

December 09, 2013 | 15:00
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Public-private partnership (PPP) investments are becoming increasingly popular in Vietnam. Deputy Chairman of the National Assembly’s Finance and Budget Committee Tran Van highlights how the Law on Public Investment should be changed to foster such projects.


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The Ministry of Planning and Investment (MPI) is working on a draft decree on PPP investment. Can you shine some light on the PPP model in general?

PPP is an investment model between state agencies and investors to execute, manage, and operate infrastructure or public services projects. The MPI is developing decree on PPP investment it is quite new to Vietnam and is only overseen by regulations in a prime minister decision from 2010.

That said, it has been somewhat a part of the legal framework since as far back as 1997 with the most recent decree from 2009, which regulated investment under the build-operate-transfer (BOT), build-transfer-operate (BTO), and build-transfer (BT) models, three PPP forms. Many parts of the law have been found suitable to these models, but it needs to be expanded to attract diverse capital sources into the transport sector.

Does the draft Law on Public Investment already being reviewed by the National Assembly, to be decided upon early next year, regulate PPP investments?

The draft does cover PPP investments but the content is sparse and unfocused. As PPP is quickly becoming more popular, more specific regulations are needed.

Should there be an entire section of the Law on Public Investment devoted to PPP investment?

Since the PPP model is socially sensitive, often has long-term contracts of up to 20-30 years, and involves numerous parties, I do believe a thorough legal framework is necessary.

Also, the law needs to regulate that the state must take the initiative in conducting feasibility studies and announcing a list of PPP projects, rather than waiting for private investors to propose the projects.

When drawing up annual budget estimates, it is important to set aside capital to fulfill state obligations in PPP projects and this should be a part of the law.

The law should also cover the investments of state businesses into PPP projects to ensure they are making effective investments rather than something outside their purview.

If an entire section is devoted to PPP investment, what would you hope to be within?

Firstly, there needs to be specific regulations covering fields, principles, conditions, project procedures, the mechanism of state capital usage and management and forms of state support. It should also cover benefits and obligations, as well as the sharing of risk between different parties and the responsibilities of state management agencies.

The law also needs to cover PPP investment into specific fields, and cover the different forms of PPP including BOT, BT, BOO, BTO, design-build-funding-management-operate-transfer (DBFMOT), build-funding-operate-maintenance (BFOM), and operate-management (OM).

By By Manh Bon

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