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HCMC seeks PPP in healthcare

Update: March, 28/2019 - 09:00
Nguyễn Thành Phong (left), chairman of the HCM City People’s Committee, speaks with Ousmane Dione, Country Director for the World Bank in Việt Nam, during a break at a workshop on Public-Private Partnerships held yesterday in the city. — VNS Photos Bồ Xuân Hiệp
Viet Nam News

HCM CITYPublic-Private Partnerships (PPP) will fail if the private and public partners do not share both risks and successes, Ousmane Dione, Country Director for the World Bank in Việt Nam, said at an international workshop held in HCM City on Wednesday.

“PPPs must be a win-win exercise for all stakeholders,” said Dione. “The legal, regulatory and institutional frameworks also need to be clear and robust to enable investors to accept risks over the longer term with some certainty of the framework within which these risks are being taken.” 

HCM City is an emerging economic powerhouse in the Southeast Asia region and among the country’s most attractive destinations for foreign direct investments, according to Dione. 

“To maintain its economic competitiveness and to meet the challenges stemming from an ageing demographic, the city needs further investment in infrastructure, especially in areas like transport, health, education and the environmental sectors,” he said.

Like most cities across the world, public investment alone will not be sufficient to meet the city’s large infrastructure and service delivery needs.

Dione said the city should work towards leveraging more from the private sector. 

PPPs have helped governments provide much-needed infrastructure to underpin future economic growth, as well as provide broader social benefits, he noted. 

Many countries in the region have already successfully delivered PPPs, including Singapore, Indonesia, Malaysia and Turkey. 

“However, failures have occurred,” he said. “For PPPs to be a success, there must be recognition that this is a long-term partnership in which both the public and private sectors need to share not only rewards but also risks.”

“As with any partnership, if the risks and rewards are not shared fairly, then it is very likely that the partnership will fail,” he added. 

The Vietnamese Government has introduced regulations to promote private sector investment in infrastructure, service delivery and equipment provision.

However, despite some successes, mostly in the transport and energy sectors, private sector investment remains relatively low. 

Clear rules of engagement, transparency in bidding and procurement, and appropriate risk-sharing arrangements between the public and private sectors are all needed, speakers said.  

The Government is currently drafting a new PPP law which will consolidate all the PPP-related legislation under one law and provide a full regulatory framework.   

Lack of funds

Nguyễn Thành Phong, chairman of the city’s People’s Committee, said that PPP cooperation was necessary because of the city’s shortage of funds for public infrastructure and services.

Currently, the number of PPP projects account for only 5 per cent of the total public investment projects in the city.

“The city is committed to creating the most favourable conditions for investors in the city,” Phong said.

Lê Thị Huỳnh Mai, deputy director of the Department of Planning and Investment, said: “The city is facing challenges in providing infrastructure to support a growing population, higher living standards, urbanisation, public services, and rehabilitation of aged infrastructure.”  

According to data on the proportion of private capital, the city budget in recent years has only provided enough capital to attract further investment. The city budget accounts for only 8 per cent of the city’s total investment fund, she said. 

Sebastian Eckardt, a World Bank economist based in HCM City, said it was necessary to improve accountability in public services and strengthen management of public debt and fiscal risk.

The secretary of the city’s Party Committee, Nguyễn Thiện Nhân, noted that investment in the form of PPP involves State agencies, investors, beneficiaries and people affected by construction projects. “A comprehensive PPP model needs to ensure benefits for the four entities,” he said.

The seminar also addressed private investment in three major fields (solid waste treatment, wastewater treatment and flood control; health; and education). 

The city’s Department of Planning and Investment will publish information about the workshop at www.ppp.tphcm.gov.vn. to ensure transparency for investors. — VNS  

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