Economic Sector

Last updated: Wednesday, May 15, 2019


Transparency and Simplicity of Administrative Procedures to Facilitate PPP Investors

Posted: Friday, June 22, 2018

Decree 63/2018/ND-CP on public–private partnership (PPP) investment took effect from June 19, 2018. The decree aims at removing current bottlenecks in this field, perfecting PPP investment guidelines in a transparent and open manner for projects, and simplifying administrative procedures for investors.

Mr Vu Dai Thang, Deputy Minister of Planning and Investment, said, the Government issued Decree 63/2018/ND-CP to eradicate bottlenecks and further improve regulations on PPP. Some important changes include clarifying procedures for deciding PPP investment projects; expanding State funds for PPP projects; providing stricter regulations on BT projects; abolishing procedures for granting investment registration certificates for PPP projects; supplementing the process of carrying out high-tech PPP projects; promote the decentralisation of public service delivery agencies, and enhancing the publicity and transparency of PPP information.

To overcome current shortcomings of BOT and BT projects, the decree stipulates that competent authorities must closely supervise investment preparations; that the process of making feasibility study reports must be advised by concerned parties; that project information must be publicised; and that signed contracts must be disclosed to public supervision.

Despite having abolished investment registration certificate procedures for PPP projects in order to simplify administrative procedures for investors, Deputy Minister Thang also said that Decree 63 added regulations on disclosure of project contract information. Fundamental project contract information must be publicised on the National Procurement Network in a bid to tackle legal gaps resulting in corruption in PPP projects. The decree also specifies the time limit for information disclosure is also clearly defined.

As for BT projects, the Decree 63 provides a separate chapter on execution processes for further administration. According to the new rule, BT projects are put for auction only after such documents as feasibility studies, technical designs and cost estimates (to make sure that chosen investors and BT project value are relatively accurate); land fund intended for investors must be defined and approved in the feasibility study report to provide a basis for organising tenders to pick up investors; and detailed construction plans for the land fund must be approved before feasibility study report is passed (to make sure that the land fund value is appropriate to the market price).

In addition to amendments, Decree 63 features new important points like furthering decentralisation, autonomy and accountability from central to local levels; crossing out financially incapable investors; broadening State engagement in PPP projects and increasing private involvement in public investment projects converted to PPP projects to reduce budget burdens.

In the past years, the PPP investment form in Vietnam has been diversified with the participation from private sector and foreign investors. As a result, infrastructure projects, especially transport and energy projects, have been deployed strongly. Through PPP projects, the private investment has contributed to changing local appearances, significantly improving the infrastructure system of the country. As for the transport sector, PPP projects built and operated thousands of kilometres of National Highway 1A and Ho Chi Minh Road (Central Highlands section), and large bridges (Co Chien, Rach Mieu, Viet Tri and Yen Lenh among others). As for the power sector, most of corporate funds has been invested in the form of independent power producer (IPP), including foreign capital, and in the form of build - operate - transfer (BOT). Typical power projects include Phu My 2.2 and Phu My 3 gas-fuelled power projects, Mong Duong and Vinh Tan coal-fired thermal power projects. Besides these two economic sectors, private investment will be encouraged into wastewater treatment, waste, health, education, and agriculture and service trade in the coming years, said Mr Tran Viet Dung, Chief of the Procurement Management Bureau, the Ministry of Planning and Investment.

“These changes are expected to create and build up the investor confidence in an open, transparent investment environment and well-prepared projects. However, it is important to give investors a message that compliance with current regulations will be a safe and effective way to do business,” he said when remarking on Decree 63/2018/ND-CP.

Nguyen Thanh

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