View of an elevated road system in HCM City. (VGP Photo) According to estimates from the Asian Development Bank (ADB), by2030, Vietnam's basic infrastructure investment needs will amount to around 480billion USD.
Infrastructure projects play a key role in spearheading thecountry's socio-economic development, especially those in the transport andindustrial sectors.
To speed up the process, the government has implemented severallegal frameworks and policies, including the Law on Investment in the Form ofPublic-Private Partnerships (PPP) in 2020 and several decrees and regulations.
Such moves aim to provide comprehensive guidelines and regulationson how to form public-private partnership projects.
However, there are still many shortcomings and limitations,according to economists.
Vu Tien Loc, Chairman of the Vietnam International ArbitrationCenter (VIAC) and former Chairman of the Vietnam Chamber of Commerce andIndustry (VCCI), said the private sector's participation would be the solutionto the country's infrastructure problems, given the state's limited budget.
In addition, PPP projects typically would offer opportunities tointroduce more efficient financial and construction management, as well as moreadvanced technologies.
Current regulations, however, had not managed to find a balancefor PPP projects on responsibilities, interests, and risk sharing amongplayers, a major setback in attracting more private investors.
Le Dinh Vinh, a lawyer from Vietthink Law Firm, said many PPPprojects faced prolonged land transfer, compensation, clearance, andresettlement issues.
It's often difficult for investors to gain access to long-termcredit or benefit from lower interest rates. There have also been grievancesover the slow disbursement of state capital.
According to Vinh investors often face more risks in the planningand construction phases. Even when a project is completed, risks continue withcapital return, contract modification, and revenue-sharing mechanisms.
In addition, policy changes, inflation, exchange rates, and taxesremain all factors that can hurt investors' bottom line.
A common issue investors have with the current PPP framework is alack of unity, clarity, and transparency across economic sectors andlocalities. In many places, the state's representative still views privateinvestors not as partners but as subjects for micro-management.
When things go wrong, investors' interests are often the first tobe ignored.
To address said issues, Loc urged the Government to quicklyimplement a detailed description of each party's rights and obligations,emphasising the amount of risk and difficulties they have to handle.
It's time the Government started building a conflict managementmechanism for PPP projects to handle potential disputes during and afterimplementation./.
VNA
