{"id":1039,"date":"2020-05-13T18:06:15","date_gmt":"2020-05-13T11:06:15","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/vietnam\/?p=1039"},"modified":"2020-05-13T18:06:15","modified_gmt":"2020-05-13T11:06:15","slug":"vietnam-the-economic-committee-of-the-national-assembly-invited-dr-oliver-massmann-to-comment-and-suggest-on-the-new-draft-law-on-public-private-partnerships-dr-oliver-massmann-presented","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/vietnam\/2020\/05\/13\/vietnam-the-economic-committee-of-the-national-assembly-invited-dr-oliver-massmann-to-comment-and-suggest-on-the-new-draft-law-on-public-private-partnerships-dr-oliver-massmann-presented\/","title":{"rendered":"VIETNAM \u2013 THE ECONOMIC COMMITTEE OF THE NATIONAL ASSEMBLY INVITED DR. OLIVER MASSMANN TO COMMENT AND SUGGEST ON THE NEW DRAFT LAW ON PUBLIC-PRIVATE PARTNERSHIPS. DR. OLIVER MASSMANN PRESENTED IN VIETNAMESE LANGUAGE AND RECEIVED EXCELLENT FEEDBACK FROM THE MEMBERS OF THE NATIONAL ASSEMBLY"},"content":{"rendered":"

Dr. Oliver Massmann\u2019s speech:<\/strong><\/p>\n

The number of successfully implemented PPP projects in Vietnam is very limited, to be frank, too low.
\nS\u1ed1 l\u01b0\u1ee3ng c\u00e1c d\u1ef1 \u00e1n PPP \u0111\u01b0\u1ee3c th\u1ef1c hi\u1ec7n th\u00e0nh c\u00f4ng t\u1ea1i Vi\u1ec7t Nam r\u1ea5t h\u1ea1n ch\u1ebf, ph\u1ea3i th\u1eb3ng th\u1eafn, qu\u00e1 th\u1ea5p.<\/em><\/p>\n

Having worked on many legal PPP reform projects in the last 20 years in Vietnam, I conclude that there are three critical issues the Vietnamese Government has to confront and they are not legal issues at all.
\n\u0110\u00e3 l\u00e0m vi\u1ec7c trong nhi\u1ec1u d\u1ef1 \u00e1n c\u1ea3i c\u00e1ch PPP h\u1ee3p ph\u00e1p trong 20 n\u0103m qua t\u1ea1i Vi\u1ec7t Nam, t\u00f4i k\u1ebft lu\u1eadn r\u1eb1ng c\u00f3 ba v\u1ea5n \u0111\u1ec1 quan tr\u1ecdng m\u00e0 Ch\u00ednh ph\u1ee7 Vi\u1ec7t Nam ph\u1ea3i \u0111\u1ed1i m\u1eb7t v\u00e0 ch\u00fang ho\u00e0n to\u00e0n kh\u00f4ng ph\u1ea3i l\u00e0 v\u1ea5n \u0111\u1ec1 ph\u00e1p l\u00fd.<\/em><\/p>\n

Vietnam needs PPP laws. But these laws are only as good as the Political Will to enforce them.
\nVi\u1ec7t Nam c\u1ea7n lu\u1eadt PPP. Nh\u01b0ng nh\u1eefng lu\u1eadt n\u00e0y ch\u1ec9 t\u1ed1t nh\u01b0 \u00fd ch\u00ed ch\u00ednh tr\u1ecb \u0111\u1ec3 th\u1ef1c thi ch\u00fang.<\/em><\/p>\n

The Political Will to implement PPP projects in Vietnam is lacking!
\n\u00dd ch\u00ed ch\u00ednh tr\u1ecb \u0111\u1ec3 th\u1ef1c hi\u1ec7n c\u00e1c d\u1ef1 \u00e1n PPP t\u1ea1i Vi\u1ec7t Nam c\u00f2n thi\u1ebfu!<\/em><\/p>\n

The first issue is Political Will. So what is Political Will?
\nV\u1ea5n \u0111\u1ec1 \u0111\u1ea7u ti\u00ean l\u00e0 \u00fd ch\u00ed ch\u00ednh tr\u1ecb, v\u1eady \u00fd ch\u00ed ch\u00ednh tr\u1ecb l\u00e0 g\u00ec?<\/em><\/p>\n

Political Will is Collective Will. Collective Will is essential for the supervision and successful implementation of PPP projects in Vietnam.
\n\u00dd ch\u00ed ch\u00ednh tr\u1ecb l\u00e0 \u00fd ch\u00ed t\u1eadp th\u1ec3. \u00dd ch\u00ed t\u1eadp th\u1ec3 l\u00e0 \u0111i\u1ec1u c\u1ea7n thi\u1ebft cho vi\u1ec7c gi\u00e1m s\u00e1t v\u00e0 th\u1ef1c hi\u1ec7n th\u00e0nh c\u00f4ng c\u00e1c d\u1ef1 \u00e1n PPP t\u1ea1i Vi\u1ec7t Nam.<\/em><\/p>\n

For example, clean water is an asset. It has to be paid for. Vietnam is lacking funds. Thus Vietnam needs successful foreign-financed BOT water projects, and the collective will of the Vietnamese people to pay for clean water.
\nV\u00ed d\u1ee5, n\u01b0\u1edbc s\u1ea1ch l\u00e0 m\u1ed9t t\u00e0i s\u1ea3n. N\u00f3 ph\u1ea3i \u0111\u01b0\u1ee3c tr\u1ea3 ti\u1ec1n cho. Vi\u1ec7t Nam \u0111ang thi\u1ebfu v\u1ed1n. Do \u0111\u00f3, Vi\u1ec7t Nam c\u1ea7n c\u00e1c d\u1ef1 \u00e1n t\u00e0i tr\u1ee3 n\u01b0\u1edbc ngo\u00e0i BOT th\u00e0nh c\u00f4ng, v\u00e0 \u00fd ch\u00ed t\u1eadp th\u1ec3 c\u1ee7a ng\u01b0\u1eddi d\u00e2n Vi\u1ec7t Nam v\u1ec1 vi\u1ec7c ph\u1ea3i tr\u1ea3 ti\u1ec1n cho ngu\u1ed3n n\u01b0\u1edbc s\u1ea1ch.<\/em><\/p>\n

Energy has to be paid for and Vietnam cannot pay for all the amount of energy it needs. Thus there have to be successful foreign-financed Energy PPP projects, and the collective will of the Vietnamese people to pay for energy.
\nN\u0103ng l\u01b0\u1ee3ng ph\u1ea3i \u0111\u01b0\u1ee3c mua v\u00e0 Vi\u1ec7t Nam kh\u00f4ng th\u1ec3 tr\u1ea3 cho t\u1ea5t c\u1ea3 nh\u1eefng g\u00ec ch\u00fang ta c\u1ea7n. Do \u0111\u00f3, ph\u1ea3i c\u00f3 c\u00e1c d\u1ef1 \u00e1n n\u0103ng l\u01b0\u1ee3ng PPP t\u00e0i tr\u1ee3 n\u01b0\u1edbc ngo\u00e0i th\u00e0nh c\u00f4ng, v\u00e0 \u00fd ch\u00ed t\u1eadp th\u1ec3 c\u1ee7a ng\u01b0\u1eddi d\u00e2n Vi\u1ec7t Nam v\u1ec1 vi\u1ec7c ph\u1ea3i tr\u1ea3 ti\u1ec1n \u0111\u1ec3 c\u00f3 n\u0103ng l\u01b0\u1ee3ng.<\/em><\/p>\n

The second issue is Bankability of PPP contracts.
\nV\u1ea5n \u0111\u1ec1 th\u1ee9 hai l\u00e0 Kh\u1ea3 n\u0103ng thanh to\u00e1n c\u1ee7a c\u00e1c h\u1ee3p \u0111\u1ed3ng PPP.<\/em><\/p>\n

What foreign investors care about most is financial closure.
\n\u0110i\u1ec1u m\u00e0 c\u00e1c nh\u00e0 \u0111\u1ea7u t\u01b0 n\u01b0\u1edbc ngo\u00e0i quan t\u00e2m nh\u1ea5t l\u00e0 vi\u1ec7c ho\u00e0n t\u1ea5t c\u00e1c th\u1ee7 t\u1ee5c t\u00e0i ch\u00ednh.<\/em><\/p>\n

Lenders will carry out detailed due diligence on the project before handing out money, and investors must be able to show bankable PPP contracts.
\nNg\u01b0\u1eddi cho vay s\u1ebd th\u1ef1c hi\u1ec7n th\u1ea9m \u0111\u1ecbnh chi ti\u1ebft v\u1ec1 d\u1ef1 \u00e1n tr\u01b0\u1edbc khi giao ti\u1ec1n cho nh\u00e0 \u0111\u1ea7u t\u01b0, v\u00e0 nh\u00e0 \u0111\u1ea7u t\u01b0 ph\u1ea3i xu\u1ea5t tr\u00ecnh \u0111\u01b0\u1ee3c h\u1ee3p \u0111\u1ed3ng PPP c\u00f3 th\u1ec3 giao d\u1ecbch \u0111\u01b0\u1ee3c.<\/em><\/p>\n

A positive point of the Draft PPP Law is it includes boilerplate clauses on lender step-in right and international arbitration. However, the clause on Government Guarantee on Revenue Risk Sharing Mechanism must be further examined.
\n M\u1ed9t \u0111i\u1ec3m t\u00edch c\u1ef1c c\u1ee7a d\u1ef1 th\u1ea3o lu\u1eadt PPP l\u00e0 n\u00f3 bao g\u1ed3m c\u00e1c \u0111i\u1ec1u kho\u1ea3n ti\u00eau chu\u1ea9n v\u1ec1 quy\u1ec1n c\u1ee7a b\u00ean cho vay v\u00e0 vi\u1ec7c gi\u1ea3i quy\u1ebft c\u00e1c tranh ch\u1ea5p tr\u00ean tr\u01b0\u1eddng qu\u1ed1c t\u1ebf. Tuy nhi\u00ean, \u0111i\u1ec1u kho\u1ea3n v\u1ec1 B\u1ea3o \u0111\u1ea3m c\u1ee7a Ch\u00ednh ph\u1ee7 v\u1ec1 C\u01a1 ch\u1ebf chia s\u1ebb r\u1ee7i ro doanh thu ph\u1ea3i \u0111\u01b0\u1ee3c xem x\u00e9t th\u00eam.<\/em><\/p>\n

The Government of Vietnam has very limited foreign exchange reserve compared to what\u2019s needed for construction of infrastructure. If a project reports a loss of 5 billion USD, how will the government repay the investor?
\nCh\u00ednh ph\u1ee7 Vi\u1ec7t Nam c\u00f3 d\u1ef1 tr\u1eef ngo\u1ea1i h\u1ed1i r\u1ea5t h\u1ea1n ch\u1ebf so v\u1edbi nh\u1eefng g\u00ec m\u00e0 ch\u00fang ta c\u1ea7n \u0111\u1ec3 x\u00e2y d\u1ef1ng c\u01a1 s\u1edf h\u1ea1 t\u1ea7ng. N\u1ebfu m\u1ed9t d\u1ef1 \u00e1n b\u00e1o l\u1ed7 5 t\u1ef7 USD, ch\u00ednh ph\u1ee7 s\u1ebd tr\u1ea3 n\u1ee3 cho nh\u00e0 \u0111\u1ea7u t\u01b0 nh\u01b0 th\u1ebf n\u00e0o?<\/em><\/p>\n

In order to achieve the goal of sustainable PPP development, the private sector and government should create win-win solutions and share loss equally.
\n\u0110\u1ec3 \u0111\u1ea1t \u0111\u01b0\u1ee3c m\u1ee5c ti\u00eau ph\u00e1t tri\u1ec3n PPP b\u1ec1n v\u1eefng, khu v\u1ef1c t\u01b0 nh\u00e2n v\u00e0 ch\u00ednh ph\u1ee7 n\u00ean t\u1ea1o ra c\u00e1c gi\u1ea3i ph\u00e1p c\u00f9ng c\u00f3 l\u1ee3i khi chia s\u1ebb thua l\u1ed7 v\u00e0 chia s\u1ebb thua l\u1ed7 b\u1eb1ng nhau.
\n <\/em>
\nThe third issue is Systemic issues.
\nV\u1ea5n \u0111\u1ec1 th\u1ee9 ba l\u00e0 C\u00e1c v\u1ea5n \u0111\u1ec1 v\u1ec1 h\u1ec7 th\u1ed1ng.
\n <\/em>
\nOne of the most prominent systemic issues is lengthy government procedures. There are none one-stop-for-all laws or regulations on all the approvals that investors need to acquire in order to execute a project.
\nM\u1ed9t trong nh\u1eefng v\u1ea5n \u0111\u1ec1 v\u1ec1 h\u1ec7 th\u1ed1ng n\u1ed5i b\u1eadt nh\u1ea5t l\u00e0 th\u1ee7 t\u1ee5c h\u00e0nh ch\u00ednh r\u01b0\u1eddm r\u00e0. Kh\u00f4ng c\u00f3 lu\u1eadt ph\u00e1p n\u00e0o li\u1ec7t k\u00ea m\u1ed9t l\u00fac t\u1ea5t c\u1ea3 c\u00e1c ph\u00ea duy\u1ec7t m\u00e0 nh\u00e0 \u0111\u1ea7u t\u01b0 c\u1ea7n c\u00f3 \u0111\u1ec3 th\u1ef1c hi\u1ec7n d\u1ef1 \u00e1n c\u1ee7a m\u00ecnh.<\/em><\/p>\n

Also, under the draft PPP law, the foreign currency balance scheme is only applicable to projects subject to decision on investment policy granted by the National Assembly and the Prime Minister, with a ceiling of 30%. Mostly very large-scale energy projects fall under this requirement. Government should extend the scope of projects eligible for foreign currency balance in order to attract more private investors.
\n Ngo\u00e0i ra, theo d\u1ef1 th\u1ea3o lu\u1eadt PPP, k\u1ebf ho\u1ea1ch c\u00e2n b\u1eb1ng ngo\u1ea1i t\u1ec7 ch\u1ec9 \u0111\u01b0\u1ee3c \u00e1p d\u1ee5ng cho c\u00e1c d\u1ef1 \u00e1n c\u00f3 quy\u1ebft \u0111\u1ecbnh v\u1ec1 ch\u00ednh s\u00e1ch \u0111\u1ea7u t\u01b0 do Qu\u1ed1c h\u1ed9i v\u00e0 Th\u1ee7 t\u01b0\u1edbng ban h\u00e0nh, v\u1edbi m\u1ee9c tr\u1ea7n 30%. Nh\u01b0 v\u1eady ch\u1ee7 y\u1ebfu c\u00e1c d\u1ef1 \u00e1n n\u0103ng l\u01b0\u1ee3ng c\u00f3 quy m\u00f4 r\u1ea5t l\u1edbn m\u1edbi \u0111\u1ee7 \u0111i\u1ec1u ki\u1ec7n. Ch\u00ednh ph\u1ee7 n\u00ean m\u1edf r\u1ed9ng ph\u1ea1m vi c\u00e1c d\u1ef1 \u00e1n \u0111\u1ee7 \u0111i\u1ec1u ki\u1ec7n c\u00e2n b\u1eb1ng ngo\u1ea1i t\u1ec7 \u0111\u1ec3 thu h\u00fat th\u00eam c\u00e1c nh\u00e0 \u0111\u1ea7u t\u01b0 t\u01b0 nh\u00e2n.<\/em><\/p>\n

In my opinion, these are the three most critical issues concerning the Draft PPP Law at the moment. Government must make effort to balance their interest with that of foreign investors in order to create a sustainable PPP development environment in Vietnam.
\nTheo t\u00f4i, \u0111\u00e2y l\u00e0 ba v\u1ea5n \u0111\u1ec1 quan tr\u1ecdng nh\u1ea5t li\u00ean quan \u0111\u1ebfn lu\u1eadt d\u1ef1 th\u1ea3o PPP t\u1ea1i th\u1eddi \u0111i\u1ec3m n\u00e0y. Ch\u00ednh ph\u1ee7 ph\u1ea3i n\u1ed7 l\u1ef1c \u0111\u1ec3 c\u00e2n b\u1eb1ng l\u1ee3i \u00edch c\u1ee7a h\u1ecd v\u1edbi c\u00e1c nh\u00e0 \u0111\u1ea7u t\u01b0 n\u01b0\u1edbc ngo\u00e0i \u0111\u1ec3 t\u1ea1o ra m\u1ed9t m\u00f4i tr\u01b0\u1eddng ph\u00e1t tri\u1ec3n PPP b\u1ec1n v\u1eefng t\u1ea1i Vi\u1ec7t Nam.<\/em><\/p>\n

***<\/p>\n

Please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dr. Oliver Massmann\u2019s speech: The number of successfully implemented PPP projects in Vietnam is very limited, to be frank, too low. S\u1ed1 l\u01b0\u1ee3ng c\u00e1c d\u1ef1 \u00e1n PPP \u0111\u01b0\u1ee3c th\u1ef1c hi\u1ec7n th\u00e0nh c\u00f4ng t\u1ea1i Vi\u1ec7t Nam r\u1ea5t h\u1ea1n ch\u1ebf, ph\u1ea3i th\u1eb3ng th\u1eafn, qu\u00e1 th\u1ea5p. Having worked on many legal PPP reform projects in the last 20 … <\/p>\n

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