A toll booth station on Phap Van - Cau Gie Highway which was built under build-operate-transfer practice. (Photo thanhnien.vn) Hanoi (VNS/VNA) - Ownership rights and risk-sharing mechanisms must be clarified inpublic-private partnership (PPP) law to encourage the participation of privateinvestors and ensure efficiency as well as transparency of PPP projects, according to TranChung, Chairman of the Vietnam Association of Road Traffic Investors.
The draftPPP law is expected to be passed at the 14th National Assembly’s ninth meetinglater this month.
Chung saidthat the nature of PPP was a fixed-term contract between the Governmentand a private investor to get the private sector involved in providing publicservices and products.
Under thelatest draft, regulations about ownership rights, obligations of the contract’sentities and how to handle disputes and violations remained vague and neededmore consideration, said Chung.
Duong DangHue from the Vietnam International Arbitration Centre (VIAC) said the lawshould clarify the ownership rights of investors in PPP projects, which wasimportant to attract the private investment and ensure accountability. Thelatest draft ignored this issue, Hue said.
Pham Van Thuong,deputy general director of Construction Investment 194 Joint Stock Company,said in PPP, risk-sharing was the core to attract investors.
Thuong addedthat investors expected the Government would protect their rights even whenthere were changes in policies and planning which might cause drops in revenue.
To attractprivate investors to PPP projects, the Government needs preferential policiesin areas like banking credit and lending rates, Thuong said.
Regardingthe risk-sharing mechanism in the latest draft, lawyer Le Dinh Vinh from theVIAC said the investor was still at a disadvantage compared to the Government.
Under thedraft, when the project earns higher revenue than planned, the excess willbe shared between the Government and the investor. However, when the project’srevenue is lower than planned, the Government would share the loss with theinvestor only when there were changes in policies and planning which affectedrevenue collection.
Vinh saidthe mechanism should be given more consideration to ensure balance.
Anotherimportant matter in PPP was regulations about handling disputes,VIAC lawyer Nguyen Tien Lap said.
Lap saidthat in many countries, about 60 percent of PPP projects did not reach theexpected targets in terms of financial efficiency, quality and technology. PPPwas a way to raise private investment but in fact, the investment was mainlylent by banks and the risks would be on the Government if the investorswent insolvent.
Lap said PPPprojects should be focused more on the community’s benefits rather than theGovernment, investors or lenders.
In addition,transparency must be ensured when implementing PPP projects, from selectinginvestors, raising capital, fee levels, payback period and revenue.
Vietnam, todate, has 336 projects implemented following PPP practice, mainly transportinfrastructure projects./.
VNA
