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Public – Private Partnership in Vietnam: A new approach Ho Chi Minh City – June 2010.

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Presentation on theme: "Public – Private Partnership in Vietnam: A new approach Ho Chi Minh City – June 2010."— Presentation transcript:

1 Public – Private Partnership in Vietnam: A new approach Ho Chi Minh City – June 2010

2 2 What is Public – Private Partnership? World Bank: “Public – Private Partnership (PPP) involves a contract between a public sector authority and one or more private sector companies, in which the private company provides a public service or project normally undertaken by the public sector.” Draft Regulation on experiment investment under PPP submitted to Prime Minister by MPI on 22 March 2010: “PPP describes a partnership of government and a private party to develop an infrastructure project or to provide a public service under a project contract. PPP is not a new concept but comes with Vietnam under a BOT or BTO or BT contract

3 3 Prime Minister’s Decree No 108/2009/ND-CP dated 29 November 2009 on investment under forms of BOT, BTO and BT contracts. This Decree regulates investment fields, conditions, Government contributions, procedures and forms of investment, investment initiatives, rights and obligations of contract parties. Legal Framework

4 4 Over 90 projects (9 projects with foreign invested capital) Total registered capital: USD7.1 billion. Of which: - Infrastructure projects account for 70% of total project quantity and 95% of total investment capital. - Other projects include power plans, telecommunication projects and water treatment plans. Some facts on investment under BOT, BTO and BT contracts in Vietnam

5 5 Not much investment from private sector on traffic infrastructure projects, especially. Lack of close and unique coordination among authorities and industries. Legal documents have not anticipated and stipulated for all possible happenings Some issues

6 6 Capital Funding needs USD 16 billion per year Funding satisfaction USD 7-8 billion/ year Roads– 250.000 km – getting worse High ways – under construction Sea ports – 119 seaports – not enough Rail ways – 2.500 km – backward Electricity– shortage Impact on the development of socio-economy The need for a new approach of PPP in Vietnam

7 7 Strengthening investment efficiency The need for a new approach of PPP in Vietnam

8 8 1. World Bank – Technical Assistance Project: Establishs and operates an office for Public – Private Partnerships program in Vietnam 2. Japan – PPP research program -Plan for utilising ODA from Japan -Regulation suggestions for Japanese private sector investors to develop projects Participation of donors and international community 3. VNCI – Technical Assistance for understanding PPP -Access fundings in finance markets … And other donors recently… Favorable signs from big international finance centers: Japan, US, UK, Middle East,…. ODA Donors

9 9 Some majors of the Draft Regulations on experiment investment under PPP 1. To ensure the aim of attracting investment capital from domestic and foreign private sector for the development of infrastructure to provide public services. 2. Capital investment made by the private sector (excluding Government contributions) must not be made up a public debt. Private capital includes private equity and commercial loans. 3. Private equity must be 30% at least of total capital investment made by the private sector. Investors can mobilize funds (with no Government guarantee) for upto 70% of total private capital investment. 4. Selection of investors is made in a competitive, equal, transparent and cost efficient manner and in compliance with Vietnam law and international practice. Principles

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12 12 Some majors of the Draft Regulations on experiment investment under PPP 1. Roads, Bridges, Tunnels, ferries. 2. Railways, Bridges for railway, tunnels for railway. 3. City traffic. 4. Airports, seaports, river ports. 5. Clean water supply system 6. Power plans. 7. Other infrastructure projects and public services in accordance with PM decisions. Fields of Investments

13 13 List of Projects for experiment PPP Authorised State agencies submit project proposal Investors submit Project proposal Appraisal by MPI Normal Steps Not recommended Authorised State agencies examine the proposal Approval by PM Some majors of the Draft Regulations on experiment investment under PPP New Procedure (1)

14 14 Feasible Study Report (FS) on PPP projects Authorised State Agencies submit FS report Appraisel of FS report by MPI Approval of FS report by PM Consultants New procedure (2) Some majors of the Draft Regulations on experiment investment under PPP

15 15 Selection of investors TenderingAppraisel by MPI Approval of selection results by PM Consultants New procedure (3) Some majors of the Draft Regulations on experiment investment under PPP

16 16 Includes: -Method of evaluating tender documents -Tendering procedures -Draft project contract Enclosed: - FS -Estimated Government contributions -Estimated specific conditions of the project. Tender Documents Some majors of the Draft Regulations on experiment investment under PPP

17 17 Issuance of Investment Certificate/ License and implementation MPI issues Certificate of Investment Project implementation New procedure (4) Some majors of the Draft Regulations on experiment investment under PPP

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