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Private infrastructure investment urged
Public-private partnerships (PPP) should be promoted as a tool to attract investment into localities since booming population in urban areas has put huge pressure on infrastructure, heard participants at a conference held in Ha Noi on Nov. 24.
The conference entitled "Local Authorities and Public-Private Partnerships" was held as part of the French Week in Viet Nam 2010.
Director of the French Development Agency Alain Henry said the PPP had played an important role in infrastructure development in Viet Nam, adding that the use of the model had been a trend throughout the world.
Experts say that around 60 per cent of the world population will live in urban areas by 2020 and there has been strong development in Vietnamese cities.
Average infrastructure investment should be US$6-8 per capita in urban areas. Localities should call for investment under the PPP model to pay for development, Alain said.
Deputy Minister of Industry and Trade Tran Tuan Anh said localities had always been an active factor in the country's socio-economic development.
Giving provinces power to map out urban planning themselves, to grant and to revoke investment licences was stipulated in laws and legal documents, he said.
Projects planned by local authorities accounted for 62 per cent of the State Budget's total investment, Anh said.
Investment should be poured into areas which had a rapid urbanisation rate, he said.
Because the private sector focused on investing in profitable projects, the Government and localities should create favourable conditions for them to invest in public services, which were not always profitable, he said.
He also said the PPP was a new concept that was not fully developed in Viet Nam due to the lack of a solid legal framework.
Some local authorities were still not ready for the private sector to participate in infrastructure development, he said.
PPP investments are primarily focused on areas such as transport, education and medicine, but still limited in the energy sector.
Investment funds that had already been established in Ha Noi, HCM City, Da Nang and Can Tho should be provided with policies and mechanisms to access both domestic and foreign capital resources, Anh said.
Director of CARO Constancy Company Herve Hocquard said statistics from studies conducted by his company showed that provincial budgets accounted for two-fifths of the State budget.
Viet Nam had seen an impressive growth rate as doi moi (Renewal) policies had created favourable conditions for economic development, he said.
He added it would have one of the world's highest urban populations, especially in delta area, meaning localities would need a lever for development to meet residential needs.
Co-operation among localities should be enhanced for the success of the PPP implementation, he said.
Nicolas Renard, assistant to the General Director of Veolia Environment Group, shared his company's experiences in implementing the PPP in the Asia-Pacific region.
The PPP supported authorities who were faced with growing populations and allowed them to access professional services, he said.
A stable legal framework with a clear economic and legal environment could reduce the risks of using PPP, he added.
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