Vietnam fails to attract infrastructure investors due to poor legislation framework

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Vietnam fails to attract infrastructure investors due to poor legislation framework

Thirty-eight investment projects to be delivered through the public-private partnership (PPP) format in Vietnam have not been able to get off the ground due to the absence of a complete legal framework.

Participants at a training course on PPP infrastructure projects held on March 31st by the Ho Chi Minh City (HCMC) Finance and Investment Company, French Development Agency (AFD) and PADDI, a center on urban studies, took issue with the insufficient legal documents for PPP.

A representative of the AFD said:

"38 PPP projects are in the pipeline but the fourth draft of a Government decree on PPP investment will not go before to the Ministry of Justice until April 25 and be passed by the Government until May this year."

"In the third draft decree on PPP, some terms have been made clear, but not clear enough to convince foreign investors."

Tran Hong Hai from the HCMC Department of Finance said:

"Investors should suggest legal terms for PPP regulations based on what they want and need for a PPP project as policymakers may not be aware of what investors want."

Land acquisition was discussed as a potential problem as well. Speakers commented that private investors should get reimbursed if land handover is not done according to schedule.

In March 2013, Vietnam's Ministry of Planning and Investment (MPI) hired Hogan Lovells to address issues that have hindered PPPs in Vietnam and to "re-energise" the programme.

Law firm Hogan Lovells chaired a series of meetings with interested private sector companies in Vietnam and Singapore to gauge reaction to a major re-drafting of Vietnam's legislation on PPP projects.

The Ministry of Transport with the help of the World Bank are currently bidding the first real public-private partnership (PPP) project in Vietnam, the Dau Giay-Phan Thiet highway.

The Dau Giay-Phan Thiet expressway project is located in the Southeastern region with four lanes and a length of 100 kilometers at a total investment of $757 million.

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