VIETNAM, July 12 –
HCM CITY — HCM City is seeking to attract infrastructure investment under public-private partnership (PPP) as part of a commitment to create a fair and flexible mechanism to align the benefits of administration and investors, a city official said.
Speaking at a conference in the city last week, Cao Thị Phi Vân, deputy director of the HCM City Investment and Trade Promotion Centre, said it was vital that risks in PPP projects are shared equally between the government, investors and banks.
The city would improve regulations for investments under BOO (build-own-operate), BOT (build-operate-transfer) and BT (build-transfer) contracts under the 2021 Law on PPPs, which provides a legal framework for all PPP projects. she said.
As the city government and private investors increasingly recognize the benefits of sharing resources for a common cause, PPP projects are set to take off in the city, according to Vân.
The investment model is particularly useful for the largest city to face capital shortages in infrastructure investment amid public debt pressures and limited state revenues.
It also helps the city address numerous urban issues related to traffic congestion, flooding and environmental pollution, she added.
The city has 22 projects under the PPP model, with a total investment of VND 64 trillion, including 11 completed projects mainly in the field of transport infrastructure.
Vũ Quỳnh Lê, deputy director of the Public Procurement Agency of the Ministry of Planning and Investment, said that a PPP is a contract between the state and a private investor, bringing together the expertise and resources of both sectors to provide services or infrastructure at a higher value. good for money.
However, a PPP contract would have more binding obligations than a normal contract, she added.
“Capable investors must ensure sufficient financial and technological capacity and experience to meet the requirements of project implementation, mainly large-scale projects,” she said.
Châu Việt Bắc, deputy secretary general of the Việt Nam International Arbitration Center in HCM City, noted, “there are problems in the implementation of BT projects due to the lack of specific guidelines and regulations.”
He called for a comprehensive review of the 2021 PPP Law, and detailed guidelines in the meantime to regulate the relationship between the Government and investors.
A risk sharing mechanism is also needed to ensure the benefits of the state and investors during project implementation as well as to resolve any disputes if any, he added.
He recommended that with contractual disputes remaining common at significant cost, investors should carefully study any risks that may arise to avoid any disputes.
Leif D. Schneider, vice president of the European Chamber of Commerce in Việt Nam’s legal sector committee, said that some minimum standards should be guaranteed by the government to reduce risks and costs for foreign investors.
It is vital to be flexible about the content, terms and conditions of PPP agreements. “Transparent bidding procedures are also necessary to foster investor confidence,” he said.
By 2025, the government plans to seek foreign investment in 157 projects in the fields of transport infrastructure, industrial parks and economic zones, energy, IT, waste and wastewater treatment, education, health, manufacturing and services.
Of these projects, 24 are in transit, while 23 of them are of the PPP model.
By 2025, HCM City will need to seek investment in its four metro projects with a total investment of US$9.7 billion, mainly through Official Development Assistance (ODA) and from the private sector.
The population of HCM City has grown to 13 million, including immigrants from other parts of the country. It urgently needs new hospitals and schools, while the city is struggling to pay about 200,000 state employees.
Public investments alone are not enough to meet the growing demands for infrastructure development in the country’s largest economic center. – VNS