City looks to infrastructure investment in public-private partnership – EIN Presswire

VIETNAM, July 12 –

HCM CITY — HCM City is seeking to attract infrastructure investment through public-private partnerships (PPPs) as part of a commitment to create a fair and flexible mechanism to harmonize the benefits of both the administration and investors, a city official said.

Speaking at a conference in the city last week, Cao Thị Phi Vân, deputy director of the HCM City Investment and Trade Promotion Center, said it was vital that risks in PPP projects be shared equally between the government, investors and banks.

The city will improve regulations on investments under BOO (build-own-operate), BOT (build-operate-transfer) and BT (build-transfer) contracts under the PPP Act 2021, which provides a legal framework for all PPP projects , she said.

As the city government and private investors increasingly recognize the benefits of sharing resources for a common cause, PPP projects will grow in the city, according to Vân.

The investment model is particularly useful for the largest city to address a shortage of capital for infrastructure investment amid public debt pressures and limited government revenues.

It also helps the city deal with a host of urban problems related to congestion, flooding and environmental pollution, she added.

The city has 22 projects under the PPP model with a total investment of 64 trillion VNĐ, including 11 completed projects mainly in the field of transport infrastructure.

Vũ Quỳnh Lê, deputy director of the Public Procurement Agency of the Ministry of Planning and Investment, said that a PPP is a contract between the state and a private investor, pooling the experience and resources of both sectors to provide services or infrastructure at a better value for the money.

However, a PPP contract would have more binding obligations than a normal contract, she added.

“Capable investors must provide sufficient financial and technological capacity and experience to meet the requirements of project implementation, primarily large-scale projects,” she said.

Châu Việt Bắc, deputy secretary-general of the Vietnam International Arbitration Center in HCM City, pointed out, “there are problems in the implementation of BT projects due to the lack of specific guidelines and regulations.”

He called for a comprehensive review of the 2021 PPP Act and detailed guidelines in the interim to regulate government-investor relations.

A risk-sharing mechanism is also needed to ensure the benefits of both the state and investors in the implementation of the project, as well as to resolve potential disputes, he added.

He recommended that as contractual disputes remain common with significant costs, investors should carefully examine any risks that may arise to avoid any disputes.

Leif D. Schneider, vice chairman of the legal sector committee of the European Chamber of Commerce in Vietnam, said certain minimum standards should be guaranteed by the government to reduce risks and costs for foreign investors.

It is vital to be flexible about the content, terms and conditions of PPP agreements. “Transparent bidding procedures are also needed to promote investor confidence,” he said.

By 2025, the government plans to call for foreign investment in 157 projects in transport infrastructure, industrial parks and economic zones, energy, IT, waste and wastewater treatment, education, health, manufacturing and services.

Of these projects, 24 are in transport, and 23 of them are under the PPP model.

By 2025, HCM City will need to solicit investment in its four metro projects with a total investment of US$9.7 billion, mostly through Official Development Assistance (ODA) and from the private sector.

The population of HCM City has grown to a whopping 13 million, including migrants from other parts of the country. It badly needs new hospitals and schools as the city works hard to pay for nearly 200,000 public employees.

Public investment alone is not enough to meet the growing demands for infrastructure development in the country’s largest economic center. — VNS

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