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Public-private partnerships require legal framework
A clear legal framework is imperative for the public-private-partnership (PPP) model to attract private sector investment for development projects, experts say.
Dang Thanh Tam, Chairman of the Sai Gon Invest Group, told the Viet Nam Investment Summit yesterday that the State was yet to create the legal framework for the PPP form of co-operation to make things clear to potential investors.
The State should facilitate private investors in terms of procedures and financial leverage, for instance, providing credit guarantees and preferential tax polices, said Tam.
The PPP model had the potential to ease the burden on the State budget, he added.
Infrastructure projects like roads generally require large amounts of capital but take a very long time to recoup, thus the Government should offer incentives, Tam said.
He cited the Ha Noi-Hai Phong Expressway Project, now being implemented under the PPP model, as an example.
In this case the developer was given the right to carry out a 600-700 ha urban complex in Gia Lam District, Ha Noi.
Provinces along the expressway, like Hai Duong will also benefit from the road. People would be able to live in Hai Duong and work in Ha Noi, and this would promote the province's real estate market while stabilising prices in the capital city, he said.
Tam also said roads to mountainous areas will not attract private investment without the Government's involvement.
Dang Huy Dong, Deputy Minister of Planning and Investment, said that in about two months, the Government would announce the list of projects that it would seek the PPP form of investment for.
Priority would be given to roads, power and water supply projects, followed by the environment, education and other sectors, he said.
For pilot projects, the Government would select those that are feasible, not too complicated and have income generation potential, he added.
The Government was also determined to cut administrative procedures by 30 per cent at all levels, which would benefit investors, Dong said.
Truong Anh Minh, Chairman of the Phuoc Nam Industrial Park, said the Government had been encouraging investment from the private sector, but it needed to do more.
He suggested that the State specify projects that it wants private investment in. "Projects that are more suitable for the private sector should be left exclusively to it," he added.
Andy Ho, Chief Investment Officer for VinaCapital, noted that the country lacked adequate infrastructure including roads, bridges, railways and ports.
Most of the funding for these projects came from ODA (Official development assistance) and Government bonds, he noted.
The PPP form of investment could ease the pressure on these sources and on the Government budget, other experts said.
Today, the conference will discuss several related topics including the evaluation of investment risks and returns, reasons Viet Nam should be part of investor portfolios and opportunities as well as challenges in the real estate sector.
The Viet Nam Investment Forum 2010 is organised by Singapore-headquartered Terrapinn, which specialises in B2B (Business to Business) conferences.
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