Infrastructure needs private sector

ME - Viet Nam should strengthen its private-public partnership (PPP) models to attract investments for infrastructure projects

This conclusion was reached at an international conference held by the Ministry of Planning and Investment in Ha Noi yesterday.

Speaking at the conference, Deputy Minister of Finance Tran Xuan Ha said it was vital for Viet Nam to focus on infrastructure projects in order to further develop the nation and to eventually become a middle income country.

According to economists, the capital for infrastructure development in the 2010-20 period will account for 11 per cent of the total gross domestic product

(GDP). However, only US$60 billion, which accounts for 8.4 per cent of the GDP, had been used for infrastructure projects in the 2001-10 period.

Ha said the PPP’s methods were a sound policy and would help the Government avoid an increase in its debt.

"Legal framework, comprehensive schemes and simple procedures should be standardised to attract more investment and boost the co-operation between public and private sectors," Ha said.

World Bank Country Director for Viet Nam Victoria Kwakwa said the organisation, in co-operation with governmental agencies, finished the market-oriented PPP system, which would attract more private capital for infrastructure and pilot projects.

A loan programme to help Viet Nam build highways was also approved at the conference. The first pilot projects would be also carried out according to the agreement, Kwakwa added.

Ha Khac Hao, deputy director of the Ministry of Transport’s Planning and Investment Department, said the ministry had asked for investment in eight highway projects. They include Ninh Binh-Thanh Hoa Highway with a budget of $1.4 billion, Da Nang-Quang Ngai Highway with a budget of $1.6 billion.

Currently, 16 Build-Operate-Transfer (BOT) projects with a small amount of investment capital are being implemented.

"There needs to be a legal framework for the preparation, implementation and management of the PPP projects. It’s necessary to further strengthen the Government’s support of these projects," Hao said.

Government officials also said that the development of the PPP policy’s legal framework had been completed.

Ha said this would become a milestone for the PPP method, which would hopefully attract more capital investment in country’s infrastructure in the future.