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Central city ramps up PPP projects

Update: May, 31/2014 - 10:12
JICA has been helping Da Nang complete the pre-feasibility studies (PFS) for two projects, the Hoa Lien Water supply plant and Khanh Son waste treatment plant, this year.— Photo baodanang

DA NANG (VNS)— The Japan International Co-operation Agency (JICA) will support Public-Private-Partnership (PPP) projects in the central city ahead of ramping up assistance for PPP projects through out Viet Nam in the future.

Assistant director of JICA's Private Sector Investment Finance division, Oyama Tomohide, made the pledge at a recent conference on capital mobilisation for PPP projects in Da Nang.

"JICA will give assistance to private companies in the city to improve skills and management of PPP projects. Most private companies in the city and Viet Nam have little experience in managing the investment model," said Oyama.

"JICA will negotiate with the Japanese government in providing the Project Development Fund (PDF) or Viability Gap Funding (VGF) for boosting the capacity of private sectors," he said, adding that nearly all of the private sector was seen as lacking skills and proper management when operating PPP projects.

He said JICA has been helping Da Nang complete the pre-feasibility studies (PFS) for two projects, the Hoa Lien Water supply plant and Khanh Son waste treatment plant, this year.

Vu Quynh Le, deputy director of the Procurement Management Agency under the planning and investment ministry, said Viet Nam's infrastructure was in need of more funding, but the country could only supply about 20 per cent of the total fund.

"It's a big imbalance between infrastructure and investment. Viet Nam needs at least US$40 billion, but can only supply around $8 billion. The dilemma is the result of Viet Nam's failure to provide a complete set of laws or instructive documents governing PPP projects, posing many challenges for the private sector," Le said at the conference.

"The government only launched decrees on Building-Operation-Transfer (BOT), Building-Transfer-Operation (BTO) and Building-Transfer (BT) projects as well as a decision on pilot PPP project," she explained.

She said only 300 BOT, BTO and BT projects, comprising 10 FDI projects, have developed since 2010. While no PPP projects had proceeded from 2010.

She added that Da Nang was a frontrunner in Viet Nam in deploying PPP projects, as they had co-operated with JICA on key projects.

Le Thi Phuong Lien, from the city's department of planning and investment, said the city had joined with the Asian Development Bank and the International Finance Corporation in conducting feasibility studies of some public transport and waste treatment projects four years ago.

"We positively co-operated with JICA in 2012 in preparation process for PPP projects. We hope to complete FS of two major PPP projects – the Hoa Lien Water Plant and Khanh Son Waste treatment plant next month," Lien said.

"We face too many problems including personnel training, skills of management and negotiation with PPP projects, while pubic investment is limited," she said.

She added the city had also inked co-operation deals with Singapore's Tamasek for capacity training in PPP projects, backed by a total fund of 324,000 Singapore dollars (US$258,000) for 2014-15.

Da Nang has also flagged 16 potential PPP projects relating to environmental sustainability, software parks, hospitals and infrastructure.

Two projects, the Hoa Lien Water supply plant and Khanh Son waste treatment plant, are estimated to be worth US$259 million. — VNS


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