1) Your perspective on the existing PPP law, four years after it’s introduction.
[Answer] The existing PPP law was issued to ensure the complete legal framework for PPP projects and to encourage PPP investment. However, four years after its introduction, the number of PPP projects does not match its initial expectation. This is due to the fact that the existing PPP law does not provide the clearest regulations for private investors to make their investment decisions and I do believe that amendments are needed at this point.
2) Areas where existing law needs to be improved or strengthened to improve the attractiveness of the PPP market in Vietnam for private sector investors.
[Answer] In my opinion, the following areas should be improved to improve the attractiveness of the PPP market in Vietnam for private sector investors:
(i) The risk-sharing and profit-sharing mechanism between the State and the private sector investor. Currently, it appears that the existing provisions do not clearly address the issues on risk-sharing and profit-sharing for private investors in specific cases. Thus, many private investors still find it risky to make their decision;
(ii) Specific rights of the private sector investors in relation to PPP projects, i.e. rights to enjoy benefits and ownership rights (where applicable);
(iii) Private sector investors’ sources of capital to make investment. For further details, according to the existing PPP law, the private investor must first use its owner equity and borrowed capital to make the investment.
(iv) The dispute resolution mechanism between the State and the investor.
3) Your views on the earlier Build-Transfer (BT) model PPPs employed in Vietnam, which I’ve been told were very exposed to corruption.
[Answer] I do share the same view that BT model can be very easily exposed to corruption due to its nature.
4) Your views on the proposed return of the BT-style PPPs in Hanoi and Ho Chi Minh City, as has recently been proposed by the National Assembly.
[Answer] As Hanoi and HCMCM are the two most dynamic cities in Vietnam, it is important that special mechanism be applied to ensure the twos’ development. However, a concrete legal framework for BT model must be first issued to ensure the transparency and workability of this model in Hanoi and HCMCM.
5) Any other insights into the difficulties faced by both local and international private players regarding the existing PPP structure in Vietnam.
[Answer] Please refer to my answer in Question 2. I do think that the mentioned issues must be addressed as soon as possible.
6) Any other insights into proposed changes – if you are aware of what might be introduced as part of the next PPP law, which supposedly is due in 2025.
[Answer] To my best knowledge, the Draft Amended PPP Law has not been shared to the public. In the case of any further progress, I will keep you posted.
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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.