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MPI holds PPP seminar

Released at: 16:16, 26/03/2015

MPI holds PPP seminar

Seminar discusses laws and decrees relating to public-private partnerships.

by Hung Nguyen

The Ministry of Planning and Investment (MPI) has held a seminar introducing Decree No. 15/2015/ND-CP, signed on February 14, regarding public-private partnerships, and Decree No. 30/2015/ND-CP on implementing certain articles of the Law on Bidding and Selecting Investors.

In the context of increasing demand for investment in infrastructure development in Vietnam, investment in the form of PPP aims to attract capital from the private sector as an effective channel, said Mr. Le Van Tang, Director of Public Procurement Agency at MPI.

All infrastructure projects, such as ports, airports, power plants, hospitals, and waste treatment, are the responsibility of the State but State budget funds are limited. The State should therefore invite private investors to participate and facilitate the conditions for them to earn a return on their investment, said Mr. Hoang Manh Phuong, Deputy Director of the Department of Legislation at MPI.

Investors wishing to participate in PPP projects must have 15-20 per cent of their charter capital set aside as total investment in such projects and bank loans for around one-third of the investment. Those without bank support will find it difficult to be involved in PPP projects. Over the next ten years, Mr. Phoung said, Vietnam needs a huge amount of investment and there must be a fair, competitive mechanism to attract investors.

No private sector monopoly

Many participants at the seminar raised concerns about the private sector gaining a monopoly under PPP investments. Mr. Phuong, however, said that “with PPP, the State allows the private sector the right to manage and operate public services but they are strictly supervised. All services provided by investors must rely on the provisions of the State, so we need not worry about private monopolies.”

Besides infrastructure investment, PPP also encourages private sector investment in agriculture and rural development, health services, lighting systems, water supply systems, drainage systems, waste collection, wastewater treatment, social housing, housing relocations, and cemeteries, Mr. Phuong added.

Investor incentives

He also told the seminar that the process for implementing PPP projects includes preparing project proposals, project approval, selecting investors and, finally, implementing the project.

Regarding investor selection, Decree No. 30 requires open bidding or designated contractors or investors to enjoy a series of preferences on investment and taxation.

Specifically, investors in PPP projects will enjoy tax incentives regarding corporate income tax and import and export taxes. Investors may also receive free land or at a reduce rental rate.

For low-profit public projects, Mr. Tang said there will be a specific mechanism to encourage investors to participate.

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