THE SOCIALIST REPUBLIC OF VIET NAM
Government News
PPP – An exit for VN’s infrastructure development
VNGOP- At the Seminar on Private-Public Partnership (PPP) for infrastructure development in Việt Nam, jointly held by the Vietnamese Ministry of Planning and Investment (MPI) and the World Bank (WB), numerous participants considered the adoption of PPP as an effective solution to ease the Government’s burdens of public spending.
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Private-Public Partnership in infrastructure development must be institutionalized – Illustration photo |
According to the WB’s 2007 report on Việt Nam’s development, the country’s annual infrastructure investment accounted for 9-10% of GDP (much higher than the international standard). However, to meet the socio-economic development and maintain the current growth rate, WB stated, it is necessary for Việt Nam to spend 11-12% of its GDP on infrastructure.
So, the engagement of private investors into infrastructure construction (with effective capital management) will help to accelerate projects, use and manage capital effectively, and reduce the Government’s burden of public spending.
The PPP has been fruitfully carried out in various countries and is considered a good solution to mobilize internal and external resources for national infrastructure construction in a rapid, effective and sustainable way.
According to Mr. Vũ Quang Hội from Bitexco, the private sector’s financial potential and capacity to invest in infrastructure building has not been made full use in Việt Nam. The main reason is that private investors face difficulties in accessing to large-scale projects.
To speed up the application of PPP in Việt Nam, Deputy Minister of Planning and Investment Cao Viết Sinh revealed that the MPI is working with the Ministries of Finance, Transport, and Construction to design an open and transparent PPP mechanism as well as provide priorities and incentives to facilitate the participation of private investors.
By Kim Anh