Vietnam - Japan PPP: Completing Legal Framework

Bui Quang Vinh, Minister of Planning and Investment, said: Amid global and domestic economic downturn, Japan’s stable ODA granting for basic construction like infrastructure, airport and seaport is a positive sign. But, investment in infrastructure system construction, particularly traffic, requires huge capital and long time. Therefore, the governments of Vietnam and Japan should have closer cooperation, especially in creating clear legal framework.

 

PPP investment for infrastructure development is a very successful experience in many developed countries in the world like France, the UK and Germany as well as emerging industrial countries like China and India. In Vietnam, this formation remains relatively new. Although investment formations like BOT (build - operate - transfer), BT (build- transfer) and PPP have been legalised by the Decree 108/2009/ND-CP, applicability is low and fails to meet expectations. Therefore, Minister Bui Quang Vinh said Vietnam now very much needs supports from international donors to build a policy framework for public - private partnership in accordance with international practices and Vietnamese circumstances. Japan has rich experience in public - private partnership. Therefore, this policy dialogue not only helps Vietnam improve the policy framework for public - private partnership but also creates favourable conditions for Japanese investors to get involved in major projects in Vietnam.

 

On the Japanese side, Yukio Edano, Minister of Economy, Trade and Industry (METI), said, Japan with its competency is ready to cooperate in infrastructure, airport, road, and energy production fields, thus helping accelerate industrialisation in Vietnam. Frank and open dialogues will help resolve obstacles and strengthen cooperation efficiency. Nonetheless, the Japanese side also raised voice to licensing standards for secondary retail establishment and raise concerns over cumbersome customs clearance procedures and weak supporting industries in Vietnam.

 

A representative from Sumitomo Corporation said, to attract Japanese companies to set foot in infrastructure investment, Vietnam also needs to adopt policies to expand currency exchange scope to facilitate Japanese companies investing in the country. In addition, bidding regulations also need to be amended to add focus on technological factor rather than only price competition. Vietnam must choose modern environment-friendly technologies for the sake of its sustainable development. In addition, bidding procedures must be improved to be clearer airy and faster. Apart from operation and maintenance after projects put into use, the Japanese side is very keen on personnel training, operating technology transfer, and maintenance operations for Vietnamese engineers. And, Vietnam also needs to prepare for this.

 

Remarking on Japan’s proposals and recommendations, Minister Bui Quang Vinh said Vietnam will continue to tune up legal foundations and policies to match new situations. Nevertheless, polling and amendment need time and roadmap. As regards customs clearance issue, he added that the streamlining and reduction of procedures is also major concern of the government and customs sector of Vietnam. At present, Vietnamese authorities are working very hard to accelerate the roadmap of implementing electronic customs procedures.

 

In response to bidding procedures, Minister Vinh said project bidding time remains slow, thus causing difficulties for investors in implementing projects as scheduled. Hence, amendments to the Procurement Law are being actively carried out. In particular, Vietnam also pays more attention to the quality of technology and has deeper assessment on technology. Bidding procedure must be quicker and more transparent. As regards conversion of Vietnamese dong into foreign currencies, the Ministry of Planning and Investment has sent a request on this matter to the State Bank of Vietnam (SBV).

 

Regarding licensing procedure, Do Nhat Hoang, Director of Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said the opening of the secondary retail establishment depends on social and economic situation in specific periods. Compared with other countries, the penetration into Vietnamese retail market is relatively slow. So, if specific standards are issued, Japanese companies will meet certain difficulties. However, Vietnam will offer certain incentives for Japanese investors and companies intending to enter this market.

 

Based on dialogue results, Minister Bui Quang Vinh affirmed that Vietnam will continue implementing the contents of Vietnam - Japan Joint Initiative. And, the country will also urge Japanese enterprises to invest in supporting industries, not only big corporations but also small and medium enterprises (SMEs).