Partnerships pilot plan approved

The Prime Minister has approved regulations for a public-private partnerships pilot programme, providing a model to be applied initially in all projects involving the development of transportation infrastructure, from roads to airports, seaports and public transit.

Opportunities for public-private partnerships (PPP) were also expected to open up in water supply systems, power plants, healthcare facilities, and other public services.

Under the new regulations, projects eligible for the PPP pilot programme would need to be identified as essential to economic development and be required to satisfy conditions of scale, capacity to recover investment capital and efficiently use financial resources, and potential for taking advantage of the private investor’s technological, managerial or operating experience and expertise.

The private partner’s financial resources may include its own equity and financing from both domestic and overseas sources, but mobilisation of capital cannot result in public debt.

The private partner can raise up to 70 per cent of its investment through financing, but must borrow funds without Government guarantee.

State capital contributions cannot exceed 30 per cent of the total cost of a project, except in cases approved by the Prime Minister.

Private enterprises investing in PPPs would receive corporate income tax preferences and exemptions from land use fees on land use rights allocated by the State. Imported materials or equipment needed to carry out the projects would also receive import tax preferences consistent with current regulations under the Law on Import and Export Taxes.

Directorate for Roads of Viet Nam deputy head Nguyen Duc Thang said that the directorate would review and classify infrastructure projects calling for domestic and foreign investment based on the new criteria for PPP projects.

The first project to be selected for implementation of the pilot programme would be the Dau Giay-Phan Thiet Highway, Thang said.

Nguyen Trong Nguyen, chief representative of Airis International Holdings LLC in Viet Nam, one of the world’s leading aviation infrastructure developers, welcomed the new programme and said it would provide a clear legal corridor for Airis to identify and carry out investment projects in Viet Nam.

Last April, Airis, together with its partners Zurich Airport, HSH Nordbank, and KFW, submitted a proposal to the Vietnamese authorities for a PPP project to expand Ha Noi’s Noi Bai International Airport at a cost of US$5-6 billion.

Airis leaders were also quoted in the newspaper Dau Tu (Investment) on November 12 as saying that memoranda of understanding on the construction of infrastructural at both Noi Bai and Da Nang airports were expected to be signed soon. — VNS