Vietnamese legislators discuss risk-sharing policy for PPP projects

The National Assembly yesterday began to look into a draft law on public-private-partnership (PPP) investment, which includes regulations on risk sharing between the Government and investors involved in PPP infrastructure projects.

Vietnamese legislators discuss risk-sharing policy for PPP projects

A section of Pham Van Dong Street in HCMC, built under the PPP format. The National Assembly has looked into regulations on risk sharing between the Government and investors involved in PPP infrastructure projects

Investors have repeatedly proposed the Government share their risks to revenue in PPP projects. The execution of these projects may last tens of years and cause cost overruns, which leaves investors hesitant to get involved in these projects.

The risk-sharing policy for PPP projects includes regulations to adjust fees, costs and contract terms.

As for PPP projects approved by the NA and the prime minister that fail to generate adequate revenue for operations, the Government proposed sharing no more than half of the difference between the actual and committed revenue.

However, investors must also share with the Government no less than half of the additional revenue compared with the committed revenue.

Minister of Planning and Investment Nguyen Chi Dung, on behalf of the Government, in presenting the draft law before the NA, stated that the policy will be applied to PPP projects under the jurisdiction of the NA and the prime minister. However, some NA deputies disagreed, saying the policy should be applied to all PPP projects.

In addition, the draft law has yet to specify the funds that will be used to address risks in PPP projects, NA deputies remarked, wondering whether funding will be sourced from the medium-term public investment plan or the fund for debt payment, as stipulated in the Law on Public Debt Management.

Some deputies even disagreed with the policy on sharing investors’ revenue risks, noting that the investors of PPP projects are chosen through auctions, so their businesses must be in line with market principles.

According to the NA’s Economic Committee, most investors, especially foreign ones, expect a Government guarantee for revenue during the execution of PPP projects. However, the Government guarantee will be adjusted, in line with the Law on Public Debt Management.

Therefore, the risk-sharing policy can be applied to ensure benefits and increase responsibility between the Government and investors.

To reduce risks related to the risk-sharing policy and ensure the transparency of the draft law, the committee asked the Government to further clarify the policy and the application of the policy to projects under the jurisdiction of ministries, agencies and localities and determine the funds that will be used to address risks in PPP projects.

The NA also required the Government to continue reviewing other regulations in the draft law to amend and supplement unclear and unreasonable regulations.

 

The draft law includes a regulation that PPP projects must b sizeable ones with a minimum investment of VND200 billion. The regulation is aimed at prioritizing large investment projects to attract local and foreign investors.

According to the Government, PPP projects tend to require significant investment and a long execution timeframe. In addition, the Government is seeking foreign investment in these projects, so these investors must have sufficient capital reserves.

Small projects that require an estimated investment of less than VND200 billion each should be conducted under other investment models with simpler procedures.

The NA’s Economic Committee threw its support behind this regulation but demanded further clarity on the foundation to set the minimum required investment for each PPP project at VND200 billion.

Moreover, many NA deputies said the contractors and investors associated with PPP projects should be appointed carefully as many of those with limited financial capacity have committed violations during the execution, management and operation of projects, leading to slow progress and cost overruns.

They also proposed supplementing criteria to assess the financial capacity of investors.

According to the NA Economic Committee, investors in PPP projects must be chosen through auctions, in line with the law. The appointment of investors and contractors should be minimized to prevent vested interests, losses and the selection of unqualified investors and contractors.

Under the draft law on PPP investment, limited and joint stock companies that are established to execute PPP projects must focus solely on their assigned tasks. They can issue corporate bonds to raise capital for their projects.

The NA asked the Government to review regulations on corporate bond issuance in the Laws on Enterprises and Securities to ensure the unification of the legal system and to propose detailed regulations on the requirements for enterprises and procedures to issue corporate bonds. SGT

Lan Nhi

PPP regulations to be changed to serve development

PPP regulations to be changed to serve development

More than per 76 per cent of current investment projects following public private partnerships (PPP) are in the field of transport infrastructure, but investors still feel insecure.  

PPPs take on South Korean flavour

PPPs take on South Korean flavour

With Vietnam as a focus of President Moon Jae-in’s New Southern Policy, South Korea is supporting the country’s development of the legal framework on public-private partnership investment.

 
 

Other News

.
PM approves 2021 public service workforce plan
PM approves 2021 public service workforce plan
POLITICSicon  07/10/2020 

Prime Minister Nguyen Xuan Phuc has approved a public service workforce plan for 2021.

Tasks on designing national master planning for next five years approved
Tasks on designing national master planning for next five years approved
POLITICSicon  06/10/2020 

The Government has issued Decision 143/NQ-CP approving the tasks of making the national master planning in the 2021-2030 period with a vision to 2050.

Socio-economic reports, plans delivered at Party Central Committee’s 13th session
Socio-economic reports, plans delivered at Party Central Committee’s 13th session
POLITICSicon  06/10/2020 

A number of socio-economic development reports and plans were delivered during the first day of the 12th Party Central Committee’s 13th sitting in Hanoi on October 5.

Party Central Committee convenes 13th session
Party Central Committee convenes 13th session
POLITICSicon  05/10/2020 

The 13th session of the 12th Party Central Committee opened in Hanoi on October 5 under the chair of Party General Secretary and President Nguyen Phu Trong.

Third wave of reform: 20% more regulations on businesses to be cut
Third wave of reform: 20% more regulations on businesses to be cut
POLITICSicon  05/10/2020 

The Vietnamese government’s Resolution 68 that aims to reduce business regulations by 20% and at least 20% of costs is seen as the Government’s third wave of reform.

Vietnam supports all efforts towards nuclear disarmament, non-proliferation
Vietnam supports all efforts towards nuclear disarmament, non-proliferation
POLITICSicon  05/10/2020 

Deputy Prime Minister and Foreign Minister Pham Binh Minh has affirmed Vietnam’s consistent stance on supporting all efforts towards nuclear disarmament and non-proliferation.

Website of 13th National Party Congress launched
Website of 13th National Party Congress launched
POLITICSicon  04/10/2020 

The official website of the 13th National Congress of the Communist Party of Vietnam (CPV) was launched on October 3, at daihoi13.dangcongsan.vn.

Minister: Government determined to achieve 3 pct. growth this year
Minister: Government determined to achieve 3 pct. growth this year
POLITICSicon  03/10/2020 

The Vietnamese Government resolved to record GDP growth of 2.5-3 percent this year at its recent monthly meeting, Minister and Chairman of the Government Office Mai Tien Dung told a press conference on October 2.

Recovering and Building Back Better as a Region: ASEAN Chief
Recovering and Building Back Better as a Region: ASEAN Chief
POLITICSicon  03/10/2020 

Secretary-General of the Association of Southeast Asian Nations (ASEAN) Dato Lim Jock Hoi has written an article about the region’s COVID-19 and economic situation. The following is the full text of the article.

"Happiness" is a highlight in the 13th National Party Congress’s draft documents
"Happiness" is a highlight in the 13th National Party Congress’s draft documents
FEATUREicon  06/10/2020 

One of the new points of the 13th National Party Congress documents is to thoroughly grasp the spirit of innovation, arouse the values of Vietnamese people, and take advantage of the 4.0 technology revolution, for a "prosperous and happy Vietnam".

The nation's "career" of today
The nation's "career" of today
FEATUREicon  05/10/2020 

Preparing for the 13th Party Congress after 75 years of independence and 45 years of reunification, Vietnam has made many spectacular strides compared to the past.

Vietnam wants resumption of talks on East Sea code
Vietnam wants resumption of talks on East Sea code
MARITIME SOVEREIGNTYicon  02/10/2020 

Vietnam wants code of conduct (COC) negotiations for parties in the East Sea between Southeast Asian nations and China to resume soon, after months of disruption caused by the COVID-19 pandemic, a spokesperson has said.

Vietnam, Singapore cooperate to facilitate entry of each other’s citizens: spokesperson
Vietnam, Singapore cooperate to facilitate entry of each other’s citizens: spokesperson
POLITICSicon  02/10/2020 

The Singaporean Embassy in Hanoi has informed the Vietnamese Foreign Ministry about Singapore’s decision to open its borders to Vietnamese visitors as from October 8, according to Foreign Ministry spokesperson Le Thi Thu Hang.

Vietnam welcomes countries’ standpoints on East Sea issue: Spokesperson
Vietnam welcomes countries’ standpoints on East Sea issue: Spokesperson
POLITICSicon  02/10/2020 

Vietnam welcomes the stance held by other countries on the East Sea issue that conforms with international law, Foreign Ministry spokesperson Le Thi Thu Hang said

Vietnam backs UN, AU efforts to ensure peace in Africa
Vietnam backs UN, AU efforts to ensure peace in Africa
POLITICSicon  01/10/2020 

Vietnam supports joint efforts by the United Nations (UN) and the African Union (AU) to promote peace in Africa, Ambassador Pham Hai Anh, deputy head of the Vietnamese mission to the UN, has said.

Setting the scene for Vietnam’s future human development
Setting the scene for Vietnam’s future human development
POLITICSicon  01/10/2020 

With Vietnam celebrating the 44th anniversary of joining the UN this month, Caitlin Wiesen, UNDP resident representative in Vietnam, pores over the country's progress in human development and the challenges ahead to tackle various inequalities.

Vietnam-Germany relations develop constantly: Ambassador
Vietnam-Germany relations develop constantly: Ambassador
POLITICSicon  01/10/2020 

Cooperative relations between Vietnam and Germany have been developing constantly in multiple fields, German Ambassador to Vietnam Guido Hildner told the media on September 30.

New Japanese PM mulls first overseas trip to Vietnam
New Japanese PM mulls first overseas trip to Vietnam
POLITICSicon  01/10/2020 

Japanese Prime Minister Yoshihide Suga is planning to visit Vietnam and Indonesia around mid-October in his first official overseas trip since taking office earlier this month, Kyodo News cited government sources as reporting on September 30.

Vietnam, UK to develop strategic partnership to higher level: officials
Vietnam, UK to develop strategic partnership to higher level: officials
POLITICSicon  01/10/2020 

Deputy PM and Foreign Minister Pham Binh Minh held talks with UK Secretary of State for Foreign, Commonwealth and Development Affairs and First Secretary of State Dominic Raab in Hanoi on September 30.

PM Nguyen Xuan Phuc hosts UK Ministers
PM Nguyen Xuan Phuc hosts UK Ministers
POLITICSicon  01/10/2020 

PM Nguyen Xuan Phuc on September 30 received Greg Hands, Minister of State for Trade Policy in the Department for International Trade of the UK and President of Enterprize Energy Group Ian Raymond Hatton, 

 
 
 
Leave your comment on an article

OR QUICK LOGIN