PPP to hit first gear to drive projects

PPP is the knight in shining amour to address Vietnam’s infrastructure woes

The Ministry of Planning and Investment (MPI) has proposed a special task force, including 23 members from ministerial and governmental agencies, be formed to push such projects ahead.

The government expects the public-private partnership (PPP) model, which involves collaboration between the government and the private sector in carrying out  projects with social benefits, to be hugely popular with investors.

The government is now piloting this model with the Dau Giay-Phan Thiet expressway project and last year established an inter-ministerial team to draft a legal framework for this model.

However, a MPI source admitted the existing team had failed to significantly push PPP projects. Even though this is an inter-ministerial team, it does not have legal power to coordinate and attract state agencies into PPP, which had caused delays in introducing a specific institutional framework and of criteria for selecting investors.

“It is essential to redefine the task force to create a consensus and close cooperation between governmental agencies to push PPP projects,” said the source.

The MPI proposed the new task force to have 23 members led by the MPI minister. Other members include a vice minister of Finance, a vice minister of Justice, a vice minister of Transport, a vice chairman of Government Office and a State Bank deputy governor.

With the participation of high-ranking officials at ministerial agencies, this task force would have power to improve cooperation between state authorities, said the source, adding that this would also strengthen the confidence of private investors and international institutions.

In early November 2010, the Vietnamese government gave birth to a mechanism piloting PPP investment model via Decision 71/QD-TTg which came into force from January 15, 2011. Accordingly, a competent state agency will draw a PPP investment wish-list every year and select the most capable investors through a competitive bidding processes.

However, until now little progress has been made with only the 100 kilometre Dau Giay-Phan Thiet expressway project to have started.