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Improved legal framework - prior condition for public-private partnership

Update: November, 21/2012 - 17:22

HA NOI (VNS) – Building regulations and management mechanisms for Public-Private Partnership (PPP) contracts in infrastructure development in Viet Nam are necessary to involve the private sector and ensure a win-win situation for involved parties, said Deputy Prime Minister Hoang Trung Hai.

Hai, also head of the National Steering Committee for PPP established late last month, chaired the first working meeting of the committee yesterday, in which he urged an improved legal framework for PPP implementation in next year.

In 2010, Viet Nam's Government launched pilot operation of PPP model in the country by approving Decision 71/2010/QD-TTg with very first regulations governing co-operation between public and private sector in infrastructure projects under PPP contract.

PPP is expected to be an effective mechanism to mobilize resources from private sector to join Government in infrastructure development, especially when Viet Nam is tightening its public spending and has increasing demand of infrastructure and public services.

Deputy PM Hai said that the implementation of PPP model in Viet Nam was not easy and its management mechanism was much more complicated that those applied for wholly-State- funded projects or wholly-private-funded projects.

According to Ministry of Planning and Investment which was assigned to co-ordination office for PPP, since PPP pilot programme was launched two years ago, parties have showed their interest to the possibility of PPP implementation.

It is said that partners and investors in development projects will be willing to join if there are sufficient regulations and mechanism that match with international norms including competitive bidding, transparency and accountability.

The ministry also says that donors help Viet Nam study and design needed conditions to develop PPP project.

Credit institutions including World Bank, Asian development Bank, French Development Agency also committed loans and ODA grants to carry out PPP projects.

At present, ministries and localities nationwide proposed projects with PPP contracts including Bien Hoa-Vung Tau Road, Ninh Binh-Bai Vot Highway, hospital logistic project, Duong River water supply project.

However, all the proposed projects face common problems laying in insufficient legal base as well as vague regulations to select projects, investors, risk sharing and contribution from State and private sector.

At the meeting, Deputy PM Hai also asked ministries and localities to select and propose projects carried out under PPP form.

Moreover, it was needed to improve enforcement and implementation forces specialising in PPP, he said. -- VNS

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