Last updated: Tuesday, March 19, 2019


PPP Law Must Strengthen Foreign Investor Confidence

Posted: Wednesday, August 15, 2018

Minister of Planning and Investment Nguyen Chi Dung chaired the first meeting of the Drafting Committee and the Compiling Board of PPP Law on August 7.

At the meeting, representatives from ministries and branches, localities, and members of the drafting committee discussed the scope of regulation of the law, project implementation process, state capital contributed to the implementation of the project, preferential mechanisms, investment guarantee, inspection and post-sanctioned fines.

Mr Nguyen Dang Truong, Director of the Procurement Management Department, Head of the Compiling Board, said that PPP investment is a form that is based on a project contract between a competent state agency and investors, project enterprises to build, renovate, operate, business, manage infrastructure works and provide public services. It is necessary to distinguish between investment in the form of PPP and that in the form of socialised and private investment.

In addition, the current problem is the general order and procedure of PPP investment. Many steps in the construction process depend on the rules of the law but are not appropriate for PPP projects.

In order to address this issue, it is necessary that the PPP Law and Guiding Decree introduce provisions on order process and procedures; and stipulate the regulation that in case there are different provisions between PPP and other laws on order and procedures, the PPP Law will be applied.

The law needs to bring in specific regulations on the State capital in the project implementation, on the way to make, disburse and implement.

Regarding the management responsibility of the State on PPP projects, the main objective of the policy group is to clearly define the responsibilities of all parties in the project implementation process, including the post-check agencies, while issuing corresponding sanctions in case these agencies have not fulfilled their responsibilities.

The successful examples of PPP programmes implementation such as Korea, India and the Philippines have shown that in the early stages, the Government should have a master plan for supporting specific policies for PPP projects, in addition to normal forms of investment incentives such as tax and land preferences.

The above countries have established mechanisms such as the viability gap funding (VGF) and the reserve fund for government guarantees.

Therefore, the PPP Law should have appropriate incentives and policies on the basis of certain principles, while taking into account policies to accelerate the implementation of projects such as land clearance, mechanisms for raising capital for projects, state investment in project implementation, risk sharing.

Speaking at the meeting, Minister Nguyen Chi Dung said that this was a new and difficult law project, which is related to many issues of views difference and the current law and is difficult in practice. In the country, the projects had been implemented for many years and had a certain number of achievements, especially in the field of transport, contributing to improving the infrastructure, however, in the last 3 years, there had been not much that needed to achieve.

Minister Nguyen Chi Dung said that it was necessary to mobilise investment resources in the form of PPP to mobilise social resources. With the current law system, it was necessary to improve the procedures to strengthen the confidence of foreign investors. The five sets of policies outlined in the draft law covered relatively the content and were agreed at the meeting.

Regarding the progress of making PPP Law as required by Resolution 54/NQ-CP, Minister Nguyen Chi Dung said that there were no factors to delay the Law Project. Therefore, it was necessary for the ministries and branches to have strong determination with the highest responsibility and close cooperation from the beginning.

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