Transport enterprises expect the PPP Law

To overcome these constraints, the Ministry of Planning and Investment is proposing and developing an Investment Law in the form of PPP.

Must be attractive enough to investors

Assessing the obstacles of mechanisms, policies and laws need solving in the development of PPP law in the near future, lawyer Dr. Le Dinh Vinh of Vietthink Law firm said. According to survey results of more than 70 BOT and BT projects in the transport sector implemented, 100% were contracted for reasons of insufficient number of investors, while the lack of transparency in the bidding process has made investors feel bad and distrustful, the appointment of bid leads to many instances that appointed investors do not ensure to provide their capacity of finance and technical ability to implement the project. As a result, many investment projects have been delayed or have gone bankrupt due to incompetence and lack of experience of investors. Attorney Le Dinh Vinh cited, especially, the BOT Phu My project was extended because the financial capacity of investors is not as promised. Investors participating in the BOT Bac Binh Dinh Project were forced to sell shares to other investors due to their insufficient capacity to continue their operations.

According to Le Dinh Vinh, to limit the above situation, on the one hand it is necessary to review the procedures, procedures and conditions for selection of investors to implement PPP projects, on the other hand, it is necessary to strengthen the management and to strictly tighten the organization of the bidding for selection of investors. At the same time, there should be a binding requirement on transfer of shares, transfer of PPP projects, to limit the status of investors to take advantage of the relationship for project and then re-transfer to make profit. "Therefore, the development of the PPP Law is an opportunity to build a clear and unified legal framework that remains attractive to investors," Vinh said.

Standing as being a businessman, Phan Xuan Duong, deputy general director of Vinh Tan 3 Energy Joint Stock Company, said that the development of the PPP Law is a good opportunity to attract foreign investors. However, if we do not consider the appropriateness of international practice, after a few years the efficiency of PPP investment will not be effective as expected. At the same time, for the introduction of the contract template, the principle of contract content development should be introduced from the outset. Contracts include the views of state agencies and investors, the structure of the project for how to take advantage of public and private advantages, principles of promoting the creative innovation of the private sector.

Opportunity to improve the investment environment

Similar to Le Van Vinh’s opinion, Head of the Public-Private Partnership Office, Ministry of Planning and Investment, Tran Viet Dung, said that because of the incomplete legal framework, we are currently lacking the tools to choose projects as well as investors. According to Dung, countries have a list of projects to attract investment, when the market does not care, the budget is issued. However, our process is reversed, when state resources are not strong enough, no longer enough, the market is newly offered.

"We want to attract private investment, first of all pick the best piece of cake to offer. To do that, the criteria for selecting the project must be to synchronize the level of the law. Therefore, we plan to study a common set of criteria to build the project portfolio and then select the supporting tools to attract investors," Dung said.

With more than 15 years of experience in advising infrastructure projects and PPP development programs in Vietnam, Tran Duy Hung, an expert on PPP and Finance, Managing Director of Monitor Consulting, said that according to World Bank data, 65% of BOT investment infrastructure projects in emerging economies also receive support from the government through various forms of different guarantee, and separately, the field of traffic rate is about 90%. So if the state does not bear the risk for investors the project can not be implemented, or if the risk is pushed to private investment, the cost of the project is very high.

"Enterprises need a stable legal corridor to minimize risks in the investment process of the project. Therefore, in the PPP Law, it is necessary to ensure a reasonable profit target for PPP project investors, the determination of investment efficiency should be fully understood throughout the investment preparation and implementation process," he proposed.

In addition, Mr. Hung also recommended in the content of the mechanism of using state capital, it is necessary to supplement specific forms of payment by the state under each project, thus creating new pressure on the investor are local or ministries, seriously implement.