More foreign participation is forecast in Vietnam’s construction market over the coming years, buoyed by the gradual opening up of the Vietnamese economy to foreign investors and the Government’s emphasis on infrastructure development.
The enactment of the Public-Private Partnership (PPP) Law in 2020 signals the Government’s intention to attract more private sector investments in the infrastructure sector. (Photo: luatvietnam.vn)
The information was included in a recent report by Fitch Solutions on the outlook for Vietnam’s construction and infrastructure sector.
According to analysts from the UK-based financial data and research group, more than half of construction roles are awarded to foreign contractors, reflecting the openness of Vietnam’s construction market. Foreign participation is mainly represented by the Republic of Korea, Japanese and Chinese engineering companies. Japanese financiers are particularly active in supporting projects in Vietnam, highlighting their dominance as an important exporter of infrastructure.
“When analysing the mix of nationalities of companies operating in Vietnam’s burgeoning construction and infrastructure market, we note that the country has one of the most diverse competitive landscapes within the Southeast Asia region,” the analysts noted.
According to Fitch, opportunities for foreign companies to participate in Vietnam’s construction market exist mainly in areas where private or foreign companies have competitive advantages. These areas include designing, consulting, building and managing projects and supplying high-value industrial goods such as rolling stock and wind turbines.
Based on data from Fitch’s proprietary Infrastructure Key Projects Database (KPD), local Vietnamese companies unsurprisingly dominate the construction scene, holding 43 percent of construction roles awarded.
“The enactment of the Public-Private Partnership (PPP) Law in 2020 signals the Government’s intention to attract more private sector investment in the infrastructure sector, and we believe foreign players will play an increasingly important role over the next decade,” Fitch said.
Leading the foreign nationalities in construction roles are RoK and Japanese.VNA
The National Assembly has passed amendments to the Law on Construction, which will take effect from January 2021.
The Ministry of Construction has announced a national action plan on green growth in 2020-2030 focusing on reducing greenhouse gas (GHG) emissions and implementing the Paris Agreement.