Vietnam ministry to finalize investment law on basis of PPP

Vietnam ministry to finalize investment law on basis of PPP

The Ministry of Planning and Investment (MPI) proposed to set an investment capital threshold for PPP projects at VND200 billion (US$8.56 million).
19:00, 28/05/2019

The Ministry of Planning and Investment (MPI) is under the process of drafting up the investment law on the basis of public-private partnership (PPP), the governmental portal reported.

(Illustrative photo)

(Illustrative photo)

In Vietnam, the Vietnamese government started adopting the PPP model in 1997 with the issuance of decree No.77, stipulating investment regulation under the form of build-operate-transfer (BOT) for domestic investment.

Currently, PPP activities and investors selection process are regulated in decree No.63 and 30.

As of the end of January, a total of 336 PPP projects have completed signing contracts, including 140 BOT projects, 188 build-transfer (BT) projects and eight projects under other forms of contract, according to a government’s report.

The report also suggested through PPP form, the government has been able to mobilize capital from the private sector to address urgent needs for infrastructure development.

Nevertheless, it is essential to continue perfecting the PPP regulation to better reflect the actual practices, stated the report.

In the new investment law, the MPI proposed PPP form be applied to projects under B category and onwards. According to the revised public investment law, projects in fields of transportation and electricity, among others, with investment capital from VND240 billion (US$10.2 million) to VND4.6 trillion (US$197 million) are classified as B category.

Statistics showed 233 out of 336 projects have investment capital of over VND200 billion (US$8.56 million) each, accounting for 69.34% of the total, excluding BT projects, total projects with investment capital over VND200 billion would be 113 out of 148 projects, or 76.35% of the total.

Under this circumstance, the MPI proposed setting an investment capital threshold for PPP project at VND200 billion (US$8.56 million).

Additionally, PPP projects with investment capital of over VND20 trillion (US$856.56 million) are subject to the approval of the National Assembly, while projects from VND4.5 trillion (US$192.7 million) onwards are subject to Prime Minister’s approval, including projects with state capital from over VND1.5 trillion (US$64.23 million).

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