PPP Conference - State of Affairs & Orientation for Development 2017 – 2020

(PPP) On the morning of 14th June, Chairman of the People’s Committee, Mr. Nguyen ThanhPhong conducted and gave the opening speech at the abovementioned conference hosted by the Department of Investment and Planning, in collaboration with Ho Chi Minh Finance and Investment State-owned Company (HFIC).

The conference was graced by the presence of Mr. Nguyen ThanhPhong, Chairman of the People’s Committee; Mr. Le Van Khoa – Vice Chairman of People’s Committee; Chairmen and Vice Chairmen of 24 local districts; Board of Directors and Management from relevant ministries; representatives from over 120 large investment firms in the vicinity. The event also received warm media attention.

An overview of the conference.

Ho Chi Minh City’s PPPs are receiving interests.

Ho Chi Minh City requires approximately 850,000 billion VND in investment capital for the period 2016 – 2020, especially in transport, environment and anti-flood system, constituting 60% of total demand. Meanwhile, local authority is only able to supply 20% of such capital. To attract additional public funding, Ho Chi Minh City will introduce mechanisms and policies to encourage investment under the scheme of PPP.

These include the establishment of PPP’s Board of Management, chaired by one of the People’s Committee Vice Chairman, as well as the feasibility study for Vietnam Growth Fund (VGF) which would help with raising capitals; this would allow Ho Chi Minh city to contribute state capital into projects with low ROI and mitigate foreign exchange rate, increasing the project’s feasibility.

During the conference, Mr. Nguyen ThanhPhong suggested the Department of Planning and Investment to create a separate section on its website to publicly list PPPs that are currently calling for investment, ensuring transparency. It is hoped that such innovations will increase PPP’s effectiveness and efficiency.

Mr. Nguyen ThanhPhong – Chairman of Ho Chi Minh City’s People Committee speaking at the conference on the morning of 14th June

On the morning of June 14, the Department of Planning and Investment also reported on the implementation of PPP projects in the city. The city has proactively proposed, developed and implemented a number of mechanisms to diversify forms of non-state budget mobilization for development; In it, pioneered the call for private sector participation to invest in infrastructure development under the model of "public-private partnership" and achieved some success. Up to date, 23 PPP projects have finished contracting and implementation, of which, significant PPP projects have been completed and put into use, contributing to the development of Ho Chi Minh city’s infrastructure delivery as well as improving the lives of its people in many areas.

Phu My bridge construction project (BOT contract) has a total investment of nearly VND 3,000 billion

At present, the city has 130 projects under PPP (investment preparation includes preparation & approval of project proposals, approval of feasibility study reports, selection of investors ,negotiation of contracts) with estimated total investment of VND 380,947 billion in all sectors.

Currently Ho Chi Minh City is calling for investment 116 projects with a total investment of over 136,000 billion (Figure above).

At the conference, the Department of Planning and Investment has pointed out the advantages of using the PPP model effectively, which has many benefits in managing and operating of public works and services. This benefit derives from the distribution of risks between the public and the private sector in such a way that the party with better risk management capacity is assigned to manage the risk. The legal framework is getting more and more tightened and its processes and procedures are becoming more sophisticated.

Mrs. Nguyen Thi Thu Hoa - Deputy Director of Department of Planning and Investment reports on the implementation of public-private partnerships in Ho Chi Minh City.

The challenge of implementing a PPP project is gradually being resolved.

In addition, the Department of Planning and Investment has faced many difficulties and obstacles in attracting investment in this form such as procedures for payment of BT project land fund, land fund payment for BT projects are not sufficient, the difficulties and obstacles in compensation clearance. These difficulties are getting shared from many related units as well as investors in the city. At the meeting, Mr. Vu Quynh Le - Deputy Director of Procurement Management Department, Ministry of Planning and Investment said the ministry also noted these problems and is now proposing many changes in the draft amendment, supplementing Decree 15/2015 / ND-CP and Decree 30/2015 / ND-CP regarding facilitating and stricter regulation of PPP investment attraction.

Mrs. Vu Quynh Le - Deputy Director of Procurement Management Department, Ministry of Planning and Investment.

In addition, Mr. Glenn Andrew Hughes - Director of Infrastructure and Project Consultancy, PwC Vietnam shared his experience in implementing PPP projects from the perspective of business consultancy.

From left to right: Mrs. Nguyen Thi Minh Phuong – Mrs. Vu Quynh Le –Mrs. Nguyen Thi Thu Hoa–Mr. Pham PhuQuoc.

In the framework of the conference on June 14, direct talks also took place with the chairmanship of Mr. Nguyen Thi Thu Hoa - Deputy Director of the Department of Planning and Investment of Ho Chi Minh City together with delegates Pham PhuQuoc - General Director of Ho Chi Minh City State Finance Investment Company (HFIC), Mr. Vu Quynh Le - Deputy Director of Procurement Management Department, Ministry of Planning and Investment and Mr. Nguyen Thi Minh Phuong - Investment Department, Ministry of Finance. This is to discuss problems and obstacles in the implementation process of related state agencies as well as investors who are interested in PPP projects in Ho Chi Minh City.

Mr. Le Van Khoa - Vice Chairman of the People's Committee of Ho Chi Minh City concluded the conference, assigned the Department of Planning and Investment continue to be the focal point, coordinate the specialized agencies and units concerned, pushing for strong investment in the form of public - private partners in the city of Ho Chi Minh City.

- Public Private Partnership Division, 06/2017 -