Vietnam passes PPP decree

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Vietnam passes PPP decree

The government of Vietnam has launched a decree on public private partnership (PPP) investment modes to promote private investment in infrastructure.

The new decree, which does not limit state funding in a PPP, includes new forms as the build, own and operate (BOO); design, build, finance, maintain, operate  and transfer (DBFMOT); build, finance, operate and maintain (BFOM), and operate and maintain forms (O&M), apart from the previous build, operate and transfer (BOT), build, transfer and operate (BTO) and build-transfer (BT).

Le Van Tang, director of Procurement Department under the Ministry of Planning and Investment (MPI), stated:

"This regulation will make PPP projects more feasible and attractive to private investors. Depending on the project, the government or local authorities will decide how much state funding will be invested."

This new decree is a combination of:

  • the prime ministerial  Decision 71/2010/QD-TTg guiding the implementation of pilot PPP projects, which
  • Decree 108/2006/ND-CP guiding the implementation of infrastructure projects under BOT, BTO and BT contracts.

Le Van Tang added:

"Given the shortcomings in these two previous legal documents, a merger was needed not only to remove any shortcomings, but to also ensure we have a comprehensive and effective PPP policy."

In early April 2014 we reported that thirty-eight investment projects to be delivered through the PPP format in Vietnam had not been able to get off the ground due to the absence of a complete legal framework.

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.

According to the Ministry of Planning and Investment (MPI) of Vietnam, the country would need about US$170 billion until 2020 to develop its infrastructure, including transport, bridges, power plants, water supply network, waste treatment plants and ports.

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