Public partner investor shield urged

CA - The rights and interests of investors must be valued in the public-private partnership (PPP) model, said Dang Xuan Quang, deputy director of the Ministry of Planning and Investment's Department of Foreign Investment.

It would be important to seek investment from the private sector in PPP projects, he said, adding that a mechanism must be worked out for distributing risk between the Government and private investors.

Private enterprises were often hesitant to join PPP projects because they believed they would encounter difficulties in recovering the invested capital, let alone make a profit.

A Japanese business representative said at a seminar held yesterday in Ha Noi that enterprises investing in PPP infrastructure construction projects could only realistically expect to recover their capital after 30 to 40 years.

This lengthy time frame forced enterprises to be particularly careful in considering such projects.

He also emphasised that the Government needed to fully commit to the partnership, sharing the risks as well as the benefits with private enterprises. A demonstration of increased support from the State would help promote the implementation of the PPP model.

According to the Ministry of Transport, other governmental measures would also be required to successfully implement PPP projects, such as capital contribution, preferential land clearance policies and tax incentives.

The Ministry of Planning and Investment estimated that Viet Nam was in need of US$16 billion annually to invest in infrastructure development, but capital allocation from the State budget would only meet half of the demand.

The practice of the PPP model was considered an ideal way for the country to deal with a shortage of capital while also achieving the goals set for infrastructure development.

The pilot application of the PPP model was stipulated in the Prime Minister's Decision No 71 issued last year.

To date, four out of 27 proposed projects were selected to be adjusted to the PPP model, including three traffic projects and one water supply project.