Overview on Public – Private Partnership (“PPP”) Laws in Vietnam
Vietnam’s infrastructure development has struggled to keep up with continued economic and population growth. According to the statistics, Vietnam needs about US$170 billion for infrastructure investment in the period from 2011 to 2020 while the State budget is constrained, capital sources from state budget and official development assistance (“ODA”) are estimated to meet only a half of the identified requirements.
In this situation, PPP is the most appropriate mechanism for Vietnam. In practice, other countries have successfully implemented partnership between the public and private sector. Put it simply, the idea is that the public sector has the ‘users’ (or customers) and land and can provide other incentives, such as tax breaks while the private sector can bring in technology, capital, and efficiency through experience.
Up to date, Vietnam has had several PPP regulatory frameworks, mostly for the Build-Operate-Transfer (“BOT”) projects since 1997 with Decree No. 1998/ND-CP dated 15 August 1998 (“Decree No. 62”) for domestic investors and Decree No. 77-CP dated 18 June 1997 (“Decree No. 77”) for foreign investors. In 2009, the Government of Vietnam issued Decree No. 108/2009/ND-CP (“Decree No. 108”) to regulate BOT, Build – Transfer (“BT”) and Build – Transfer- Operate (“BTO”) projects as amended in 2011 by Decree No. 24/2011/ND-CP (“Decree No. 24”). More notably, a pilot program for PPP projects was promulgated in 2010 under Decision No. 71/2010/QD-TTg dated 09 November 2010 by the Prime Minister (“Decision No. 71”).
Vietnam to amend PPP regulatory frameworks
However, since the issuance of PPP pilot program in 2011, no PPP project has been signed under this framework. Compared with some other jurisdictions in Southeast Asia, foreign investment in infrastructure in Vietnam continues to be low. Vietnam’s current PPP regulations were not successful in attracting foreign investment on a PPP basis. Generally speaking, the current PPP regulations, mainly Decision No. 71, only provide a basic framework for PPP projects and it is broadly and generally interpreted as the PPP mechanism for BOT projects. Continue reading “Lawyer in Vietnam Oliver Massmann – New PPP Laws in Vietnam: Moving Closer towards bankable projects ?Oliver Massmann and Ho Gia Le Hoang”