Vietnam needs more investment

Available funding currently reached only half of the required amount, said Director of the Ministry of Planning and Investment's Bidding Centre Vu Quynh Le.

Public-Private-Partnerships would play an important role in making up the remaining amount of funding needed, Le said at the first official meeting between the Vietnamese government and 20 donors held in Hanoi on Thursday.

The meeting was held in order to discuss donor support in implementing the PPP programme in Viet Nam.

Le added that joint support between donors would maximise the effectiveness of aid. Deputy Minister of Planning and Investment Dang Huy Dong said that the Vietnamese government had always encouraged project investment from both domestic and foreign private sectors.

The Prime Minister's Decision 71, based on pilot PPP investment, has created a legal corridor for attracting private sector investment for infrastructure and public service development.

"The government expects that the model would not only attract financial investment, but also help transfer advanced technology and effective management skills," Dong said.

He added that the most important PPP programme goal centered on creating an appealing investment market for private sector infrastructure projects in order to boost the country's socio-economic development.

"The market is predicted to increase in worth to around $70-80 million during the next 10 years." Dong said that the PPP action plan included capacity building, development guidelines for project implementation and financial models to help raise awareness on effective PPP project implementation.

"Large scale PPP implementation is set to commence based on government experience obtained during pilot stages," he said.

Le, from the bidding centre, said that Decision 71 had assisted effective capital management while not inflating public debt in the process, adding that current investment principles were competitive, non-discriminative, transparent and cost efficient in compliance with Vietnamese law and international practice.

"An action plan regarding pilot PPP investment implementation would help build institutional capacity to effectively manage PPP projects," said the Deputy General Director of the Foreign Investment Agency cum Director of the Inter-Ministerial PPP Task Force, Dang Xuan Quang.

He said that Viet Nam lacked experience in the sector. The pilot programme would help build a legal framework to ensure long-term implementation.

Asian Development Bank's Country Director Ayumi Koshini said that the ADB considered investing $340 million towards a project development fund.