Overhead view of a project under the North-South Highway Project. (Photo: VNA) The Law on Public-Private Partnership was supposed to, in theory, address threemajor problems endemic in Vietnam’s infrastructure projects; slowprogression, overbudget and poor quality. However, according to many in thefield, the law has failed to tackle a number of fundamental issues, which hasdiscouraged and hindered investors to commit to infrastructure projects.
Dr Tran Chung, President of the Vietnam Association of Road Traffic Investors(VARSI) President, said the relationship between the State and investors, as ofright now, was extremely one-sided.
Chung said PPP contracts, in essence, were agreements in which the State andinvestors work together to share risks, benefits and responsibilities forprojects. Ideally, they should be equal partners and treated as such under thelaw. The 2021 Law on PPP, however, has failed to clearly define their rightsand responsibilities.
"In reality, the State (or local governments acting on behalf of theState) almost always considered themselves to be regulators and investors asthose to be regulated, not as equal partners," he said.
This old-school mindset was a major issue in getting investors to show interestin PPP projects.
Dr Duong Dang Hue from the Ministry of Justice, said there were instances inwhich local governments imposed unreasonable demands on investors that brokeseveral laws. He said local governments or governmental offices were likely tosecure far greater bargaining and decision-making power compared to investors,which ultimately hurts projects and discourages investors from joining in thefuture.
For example, in a number of Build-Operate-Transfer (BOT) projects under theNorth-South Highway Project 2017-20, the State's representative demandedinvestors borrow exclusively from financial institutes, which was in violationof the 2020 Law on Business that allows investors to choose how to securecapital and the 2021 Law on PPP which does not specify how investors securecapital.
"Current laws do not specify investors must raise capital exclusively fromfinancial institutes and therefore such demand was unlawful andunacceptable," Hue said.
He called for a comprehensive review of the 2021 Law on PPP and the immediaterelease of a detailed guideline in the meantime to regulate the relationshipbetween the State (and its representative bodies) and investors.
Dr Vu Tien Loc, President of the Vietnam International Arbitration Centre(VIAC), said the PPP model has been a successful one employed by many countriesaround the world to attract investors in building infrastructure projects. The2021 Law on PPP, once updated, will help resolve many of investors' concernsand contribute to a trusting relationship between the State and investors.
The meeting was jointly organised by the Vietnam Chamber of Commerce andIndustry (VCCI) and the United States Agency for International Development(USAID)./.
VNA
