Improve investment efficiency through public-private partnerships in Vietnam

Public-private investment partnership (PPP) is seen as a strategic option to mobilize private investment and improve public service delivery.

However, the implementation of PPP projects in Vietnam in general still faces many difficulties and obstacles leading to a low number of successful projects and the private economic sector is still cautious.

This is the opinion of many experts at the Investment Legal Support Forum with the topic Public-Private Investment in the New Context of Ho Chi Minh City coordinated by the Vietnam International Arbitration Center (VIAC) Organized by the Ho Chi Minh City Trade and Investment Promotion Center on April 24.

Institutional challenges

Lawyer Ngo Thanh Tung – member of Hong Duc International Limited Liability Law Firm (VILAF) said that investment cooperation in the form of PPP has many advantages such as bringing clear results and ensuring project quality. and there is risk sharing between parties.

Vietnam is one of the countries that has been pursuing PPP as a strategic option to mobilize private investment and improve public service delivery.

However, the implementation of PPP in Vietnam faces many difficulties and obstacles, leading to a low number of successful projects and the private economic sector is still cautious, especially investors with real potential. want to seriously participate.

According to lawyer Ngo Thanh Tung, one of the main challenges in implementing PPP in developing countries is the lack of clear and consistent legal and regulatory frameworks.

Therefore, the roles, responsibilities and rights of public and private partners as well as procedures for project selection, appraisal, approval, procurement, contract management, monitoring and evaluation are unclear.

In addition, the issue of institutional capacity and human resources of the public sector is also a factor that hinders the success of PPP projects.

In addition, underdeveloped financial markets and high capital costs lead to limited affordability for PPP projects.

Sharing the same opinion, Associate Professor, Dr. Duong Dang Hue – Vice Chairman of the Enterprise Legal Club, former Director of the Department of Civil-Economic Law, Ministry of Justice commented that the PPP Law currently has many The regulations are unclear, overlapping, contradictory and cause inadequacy when applied in practice.

Current legal documents on PPP do not have regulations on the state’s responsibility when violating contractual obligations; The mechanism for risk-profit distribution is not really fair and is time-consuming for investors.

Investors are not given favorable conditions in managing and doing business of PPP projects. These shortcomings cause private investors to suffer many disadvantages and lose the balance of rights and interests with state agencies when implementing projects.

Dr. Tran Du Lich – Vice Chairman of VIAC, Chairman of the Advisory Council implementing Resolution 98/2023/QH15 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City According to information, up to now, the city has called for 54 investment projects in the form of PPP (41 projects in the fields of culture, sports, and health according to Resolution 181/NQ-HDND; 5 projects in the fields of culture, sports, and health according to Resolution 181/NQ-HDND; BOT project for existing road traffic works and 8 other projects in the fields of education and sports have just been called for investment capital by Thu Duc city on April 17).

The city is also making great efforts to implement the regulations in Resolution 98/2023/QH15 in implementing PPP projects in the city.

However, the process of calling for implementation of PPP projects is facing some problems such as lack of specific instructions as well as issues related to the suitability of the PPP form for some projects.

Enhance fairness and transparency

Lawyer Ngo Thanh Tung pointed out that successful PPP projects often require strong political commitment and support from the Government through providing a comprehensive and strict legal and regulatory framework; Encourage private sector participation and innovation.

Determining the roles and responsibilities of public agencies and relevant agencies in preparing and appraising the effectiveness and feasibility of the project is very important. Investors also need to be provided with a transparent, fair and competitive public procurement process.

Previously, most PPP projects focused on traditional sectors such as transportation, energy, water or waste management. But recently, PPP projects in social sectors such as sports and culture have become a relatively new phenomenon emerging in Vietnam.

Implementing PPP projects in the social sector will help improve the quality and accessibility of public services; promote social cohesion, stimulate economic growth and tourism.

However, social sector PPP projects also face many challenges due to their effectiveness being difficult to evaluate in a short time, depending on the preferences and perceptions of users and beneficiaries.

To improve efficiency in implementing social sector PPP projects, Lawyer Ngo Thanh Tung believes that the Government, the public sector and the private sector need to apply some specific measures, such as: develop and apply appropriate methods and indicators; engage and consult with stakeholders; provide financial and non-financial incentives and support, integrate and align social sector PPP projects with national and local development plans and strategies; ensure transparency and accountability of PPP projects.

Meanwhile, Associate Professor, Dr. Duong Dang Hue also made a number of recommendations to improve legal regulations, enhance the role and protect investors participating in PPP projects.

Specifically, the National Assembly needs to carry out activities to supervise the implementation of the PPP Law and while not promptly amending and supplementing laws, decrees, and guiding circulars; It is necessary to research, draft and issue PPP project contract samples.

In addition, relevant agencies and departments also need to continuously synthesize problems and inadequacies to accompany investors and promptly resolve their problems. Only then will the PPP project attract new investment sources, have more improvements and be implemented more effectively.

Ms. Luong Thi Thanh Ngan – Private Sector Development expert, Vietnam Resident Representative Office, Asian Development Bank (ADB) – shared that each PPP project can be divided into the first 3 phases, middle and end. Improving the success rate of PPP projects requires careful research and screening from the beginning.

In other words, it is necessary to plan and select projects suitable to the form of investment; approach costs over the entire project life cycle; appropriate risk allocation. The next stage requires a competitive and transparent bidding process. The final stage must enforce the contract to ensure trust.

The key to the success of PPP is to have a consistent and clear legal framework; High political determination and continuous improvement of the State sector’s participation capacity./.