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Sunday, August 19 2018
Tiếng Việt
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Date 03/05/2018-08:26:00 AM
The first High-level Dialogue on PPP Development Cooperation in Vietnam
(MPI) – On May 2nd, 2018, the first High-level Dialogue on PPP Development Cooperation in Vietnam was held at the headquarters of the Ministry of Planning and Investment, under the co-chairmanship of Deputy Minister of Planning and Investment Vu Dai Thang and Country Director of World Bank in Vietnam Ousmane Dione. Attending the Dialogue were the representatives of development partners and ministries, branches, provinces of Vietnam.
Deputy Minister of MPI Vu Dai Thang speaking at the Dialogue: MPI

The Dialogue is an opportunity for the ministries, branches, provinces to exchange with the development partners on difficulties and problems in the implementation of the previous PPP programs and to discuss the specific implementation orientation to support cooperation in the coming time, in order to put PPP into reality, complete the infrastructure system.

Speaking at the opening of the Dialogue, Deputy Minister Vu Dai Thang said, after more than 30 years of innovation, Vietnam has achieved many accomplishments in economic development, in which the economic growth rate is always high as compared to other countries in the region and in the world. The economic structure is adjusted towards modernization, increasing the proportion of industry, services, reducing the proportion of agriculture and deepening and widening the international economic integration. However, it is a difficult problem for Vietnam to maintain the motivations, growth rate and to become an industrialized country in the coming time in the context of rising demand for energy and infrastructure for growth.

Specifically, according to the estimation of the Asian Development Bank (ADB), in the period 2015 - 2025, the investment demand for Vietnam’s infrastructure is about 16-17 billion USD and according to HSBC Bank’s estimation it’s about 17,2 billion USD. Meanwhile, the public investment capital of Vietnamese Government is becoming more and more difficult. Attracting investment in infrastructure under PPP form is a necessary solution in order to both attract foreign and domestic investment capital and take advantage of modern technology.

The Ministry of Planning and Investment, as a standing agency of PPP Steering Committee, has had many efforts in improvement of the PPP policies to attract private investment into infrastructure in a more efficient way. In the process of completing institution, the MPI has received attention and support from donors, to perform PPP in a methodical, professional way. However in the implementation process of Decree No.15/2015/ND-CP dated 14/02/2015 on investment under PPP form and Decree No. 30/2015/ND-CP dated 17/2/2015 providing detailed regulations for the implementation of a number of articles of the Law on Public Procurement on selection of investors still exist shortcomings, which does not create an attractive environment and flexible methods of investment that are convenient for the investors, especially for the foreign investors to cooperate with Government's agency in implementing the country's important infrastructure projects.

Therefore, to continue enhancing the legality, the National Assembly has assigned the Government the task of formulating the PPP Law, to affirm the determination of Vietnam in resolving legal difficulties and obstacles relating to this form. Besides completing the legal framework, support to promote the implementation of specific projects is also very important in the coming time.

Country Director of World Bank in Vietnam speaking at the Dialogue: MPI

Speaking at the Dialogue, Mr. Ousmane Dione, Country Director of World Bank in Vietnam assessed that PPP cooperation is an important theme to Vietnam’s development. Ministry of Planning and Investment has directed to boots the promotion of the important agenda for Vietnam. In the world, PPP is a successful model of many Governments to attract investment into infrastructure and bring about socio-economic benefits. The PPP framework is even more important when the Governments are facing fiscal difficulties. To make PPP work, we need to recognize this as a long-term partnership, the public and private sectors must share benefits and risks. Especially, sharing risks is an important factor, also, reasonable allocating resources, ensuring fair competition, doing its best to control risks of the project, benefiting both sides.

To ensure the success of the project, mobilizing capital from the private sector in both loans and equity, we need to understand that the private sector only accepts its participation when feeling comfortable about the distribution of risks and benefits. Therefore, not all projects are suitable to apply the PPP model. In some cases, infrastructure projects must be funded by public funds, when a project is identified as suitable for the PPP model, supports, coordination are necessary in order to select the right investor to implement the project. Besides, competent state agencies must have the capacity, knowledge of PPP to not only choose the investors but also to monitor the projects’ implementation in the future.

Mr. Ousmane Dione affirmed that the private sector’s participation is crucial. WB is ready to assist Vietnam in promoting PPP programs, attracting international investors. As of now, the Government of Vietnam has made a lot of effort to attract investment projects in the form of PPP, but the implementation process is still slow. Therefore, building the PPP Law is a great initiative. However, apart from building the law, the implementing is also very important. The construction, co-implementation of the master plan to perform PPP programs is very necessary. A well-designed PPP Law will open up a lot of great opportunities to perform PPP projects in Vietnam.

At the Dialogue: MPI

Sharing on the process of formulating the PPP’s legal framework and supporting from development partners, Mr. Nguyen Dang Truong, Director General of Public Procurement Agency, MPI said that currently, development partners support Vietnam through individual technical forms, contributing opinions on the content of the Draft, supporting through ODA projects, programs, and non-refundable aid. Mr. Nguyen Dang Truong also laid out specific areas that Vietnam wants to receive attention, supports from Development Partners in the coming time.

The process of developing the PPP Law is expected to last from 2018 to 2020 and will take place in three phases: Phase 1: Proposing great groups of policies to the National Assembly through the proposal to develop the Law. Phase 2: Law drafting, including some big contents of the Decrees providing guidance of the Law. Phase 3: Approving the Law and drafting of Decrees providing guidance of the Law. Until now, the MPI has completed consulting the ministries, branches, provinces, and enterprises and summited the proposal to develop the Law to the Government.

The proposal is expected to be considered by the Government at the Government’s regular meeting in May and then summited to the National Assembly in July 2018.

Sharing on the challenges of developing the PPP draft law, relating to PPP project’s financial content, Mr. Le Tuan Anh, Deputy Director General of Department of Investment, Ministry of Finance said that the role of the private sector is important, decides the success of PPP projects. On the side of the State, the responsibility for support is essential, financial mechanism’s consistency regarding PPP activities, allocation, management, payment, settlement and arising obligations is needed. In term of the management mechanism, the current input management should be replaced by the output management mechanism to promote the creativity of the private sector.

In addition, mobilizing investors in institutional building with PPP orientation, implementing long-term projects, sustainable plans should also rely on domestic resources. Mr. Le Tuan Anh posed a question: “Can we mobilize investment from pension funds, social insurance and how to participate if we can?”

Agreeing with Country Director of World Bank in Vietnam Ousmane Dione’s point of view that PPP is a long-term partnership that must share risks, ensure fair competition, Mr. Vu Tuan Anh, Deputy Director General of Department of PPP Management, Ministry of Transport believes that challenges in implementing transport projects are: the guiding documents are no longer fit with the reality, unclear regulations lead to different interpretations and the risk sharing mechanism is limited. Along with that, domestic capital markets are short of long-term credit, regarding the foreign capital, the risk sharing mechanism is not satisfying and the human resources are lack of capacity and experiences.

Sharing from the local side, Mr. Nguyen Hong Van, Head of PPP Division, Department of Planning and Investment of Ho Chi Minh City said, currently, the City is deploying the investment preparation procedures for 131 projects with a total estimated investment of 284,607 billion VND in the fields of transport infrastructure, environment, urban refurbishment, urban development, trade and service, education, healthcare, culture and sport. In addition, the City continues calling for investment for 243 investment projects in the form of PPP with the total estimated investment of 869,420 billion VND.

Difficulties during project implementation are: a long time for implementation, need for the coordination of many units, capital for investment preparation if using state budget, which following Public Investment Law will take a long time and has a small value of capital, not ensure the quality of investment preparation. HCM city plans to set up Fund for Project Preparation assigned to the State Financial Investment Corporation City for management, however, there are obstacles relating to organization and management of this fund.

Speaking at the Dialogue, Representatives of Development Partners from ADB, IMF, JBIC, JICA, USAID, GIHUB, EuroCham, Australia Embassy, Keximbank, British Embassy... all expressed commitments to supporting Vietnam in the process of developing the PPP Law. They confirmed willingness to support the PPP program of Vietnam and this is a suitable time to propose 6 tentative fields including: A National PPP Roadmap/Masterplan, drafting the Law, developing projects, building database, training and communicating.

Ending the Dialogue, Deputy Minister Vu Dai Thang highly appreciated the cooperation relationship between the development's partners with the Ministry of Planning and Investment in particular and with the Vietnamese Government in general. At the same time he emphasized, this is the first time the MPI and Vietnam’s ministries, branches, localities share with the development partners difficulties, problems in implementing PPP projects and have received attention, consensus, strong commitments to support Vietnamese Government in PPP development cooperation in the coming time, Vietnam wishes the development partners to cooperate with the ministries, branches, localities to deploy specific projects on PPP in the most modern methods./.

Hien Nguyen
Ministry of Planning and Investment

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