|
Public-private partners need legal basis
The main issue that needed to be addressed for an effective implementation of PPP (Public-Private Partnership) in Viet Nam was the successful development of the legislative framework, according to Solicitor Samantha Campbell from Gide Loyrette Nouel.
"That includes refining the current regulations in place for both Build-Operate-Transfer (BOT) and public services tendering," she said.
According to Campbell, whose company provides commercial and legal assistance to companies involved in infrastructure activities in Viet Nam and in Southeast Asia, the development of much broader PPP model framework is needed that incorporates PPP models other than the BOT, Build-Transfer (BT) and Build-Transfer-Operate (BTO).
"This would allow projects for the rehabilitation of existing infrastructure or the construction of new infrastructure to be implemented, and give the private sector a bigger role in management without losing control," Campbell told the Viet Nam News.
Vu Quynh Le, Director of Centre for Procurement Support, Public Procurement Agency said the Ministry of Planning and Investment planned to submit the proposal for the pilot project to promote the implementation of PPP this March.
According to Le, although the PPP model has been introduced in Viet Nam for several years in the form of BOT, BT and BTO projects, a pilot project about PPP implementation in Viet Nam is still necessary because many irresolvable issues have emerged during the implementation process so far.
"It is high time that Viet Nam approached the PPP model the way it is being conducted in other countries," Le said.
For example, according to the pilot project, a competitiveness mechanism will be implemented which means that investors will be required to take part in bidding process in order to be selected.
"Only bankable projects would be eligible for selection," Le said.
Le said it would be a total shift because "We know that is one of the notable shortcomings in the way we do now."
Campbell said the new pilot project was the big step forward to improve the practical implementation of PPP.
According to Le, in the pilot stage, the projects are mainly confined to improving infrastructure including those to build Dau Giay- Phan Thiet and Ninh Binh-Thanh Hoa express highways.
According the latest Global Competitive Report 2009-10 published by the World Economic Forum, in terms of infrastructure, Viet Nam ranks 93 out of 133 countries in the survey.
"This is a very low ranking which means there are a lot to be done," Le said, "To achieve the target of Viet Nam becoming an industrialised country by 2020, establishing good infrastructure is an indispensable part."
In the next decade, as part of the socio-economic development plan, developing infrastructure will be a Government focus. This will be translated into a capital requirement of US$16 billion each year, but currently only some $7-8 billion is available.
"That's the moment when the PPP model can be a good solution because if properly implemented, it will increase the investment efficiency as it can utilise each sector's strengths," Le said.
The latest relevant legal document, Decree 108, which took effective from January 15, provides guidelines for investments under BOT, BTO and BT models.
"One of this decree's improvements is to demonstrate the need for competitive bidding for projects proposed by investors, while under the previous decree, selected projects didn't necessarily need to be tendered out," said Campbell.
The decree also clearly set out key investor protections including tax incentives, exemptions from land rent during construction and operations, the right to mortgage land or infrastructure for project financing purposes.
The newest point in the decree enabled the application of foreign law to project contracts and possibility of international arbitration, she said.
According to Campbell, there is a need to develop the legislation for wider PPP models, not only BOT, BT and BTO. "The World Bank and the MPI are working together on it."
She also noted that the regulatory framework was not the only issue. Others included the lack of clear identification of public authority roles and that negotiations over project contracts have tended to be a very slow procedure.
"We are anticipating that the pilot project can address those issues," she said.
Ha Noi leads the way in dedicating a large ratio of capital to develop its infrastructure.
"And the demand for infrastructure projects is still on the rise after the expansion of Ha Noi," said Hoang Manh Hien, vice chairman of the Ha Noi's People Committee.
"To respond to the socio-economic development requirements, capital has to be drawn from a variety of resources, and we very much welcome the participation of the private sector," he said.
vietnamnews
|
