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PPP promoted as aviation sector development solution
The public - private partnership investment model will become a suitable method to attract private investors to join in the development of Viet Nam's aviation infrastructure, according to a conference held in Ha Noi on Thursday.
Public private partnerships (PPP) were discussed at a conference on aviation infrastructure development in Viet Nam conducted by the Viet Nam Ministry of Planning and Investment (MPI), Airis Holdings LLC, Zurich Airport and HSHNordBank.
Speaking at the conference, Deputy Minister of MPI Dang Huy Dong said infrastructure projects always faced difficulty finding financing, even in other countries. If the PPP model were to be applied here it would bring handsome benefits for infrastructure development, he said.
The Government has committed to enhancing the PPP model soon in the prioritised sectors of aviation and road transportation. The Government would also strengthen the application of the PPP model in other sectors such as education, science and technology, Dong added.
A representative from the US Embassy in Ha Noi told participants the Vietnamese Government needed to quickly complete legal documents related to the PPP model to assist in the development of the country. Effective use of the PPP model would help Viet Nam to access heretofore unheard of levels of financing, and would create a more transparent and effective process by which public procurement decisions. The result would be the development of a new PPP law in Viet Nam, the representative said.
The US government stood ready to continue supporting the MPI and the Vietnamese Government to carry out policies and laws based on its experience using the PPP model, the representative said.
Thomas E Kern, CEO of the Zurich Airport, said the PPP model could be carried out successfully in the development of Viet Nam's aviation infrastructure with participation from partners in Ha Noi. He expressed is hope that the model would result in high quality aviation infrastructure projects and that Viet Nam's economy would develop strongly towards the greater use of the PPP model.
To successfully implement this model Viet Nam would face many difficulties, including creation of a legal framework, a comprehensive policy on PPP, and administrative procedures barriers would need to be lifted in order to ensure a competitive edge for both domestic and foreign investors, said deputy general director of the Bank for Investment and Development of Viet Nam Tran Thanh Van.
Transparency in the choice of investors would be a prerequisite for successful implementation of the PPP model, he said.
Viet Nam's aviation industry currently included 22 airports, five international and 17 serving only the domestic market. The majority of these aviation terminals were built prior 1975, with short runways allowing the take-off and landing of only small aircraft to serve relatively short domestic routes, Van said.
None of the country's existing airports could feasibly be transformed into gateways to other Asian countries to exploit Viet Nam's geographical advantages, he said.
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