Public Procurement Agency

Ministry of Planning and Investment of

Promoting quality infrastructure in Vietnam through

Public-Private Partnership Investment

Nguyen Thi Linh Giang – Deputy Head of PPP Office Public Procurement Agency, Ministry of Planning and Investment Hanoi, December 2016

MINISTRY OF PLANNING AND INVESTMENT

PUBLIC PROCUREMENT AGENCY

2. Overview of PPP in Vietnam

1. Infrastructure development in Vietnam

2

Content

Quality of Infrastructure in Vietnam

0 2 4 6 8

Cambodia

Laos

Philippines

Vietnam

Indonesia

Thailand

Malaysia

Singapore

Quality of Infrastructure

Quality of Infrastructure(score 1-7)

24

44

62

76

90

98

101

2

Source: Global Competitive Report 2015 – 2016 of World Economics Forum

1. Infrastructure development in Vietnam

Quality of infrastructure in Vietnam

Infrastructure investment demand in Vietnam Demand of investment capital for infrastructure

Nhu cầu vốn đầu tư CSHT của Bộ, ngành, địa phương

Total investment in

the State Plan ????

Real total investment

State budget

Demand of investment capital for infrastructure

6

Why PPP

Promote infrastructure development through collaboration between different

stakeholders: The Government (Public Sector) – The Investor (Private

Sector) – The Community

Combination of:

Social liability, awareness of environment and accountablity of the public

sector.

AND

Finance, technology, management experience of the private sector.

The solution: PPP

Khung pháp lý hiện hành về PPP

7

LAWS

Public

procurement

law

CIRCULARS

Circular

06/2016/

TT-

BKHĐT

Circular No.

15/2016/TT-

BKHDT on

RFP, RFQ of

PPP project

DECREES

Decree 30/2015/ND-

CP dated 17/3/2015

on PPP investor

selection

Decree 15/2015/ND-

CP dated 14/2/2015

on PPP (replace

Decree 108 and

Decision 71)

Public

Investment

law

Construction

law

Investment

law

Circular

02/2016/TT

-BKHĐT

Circular

55/2015/

TT-BTC

Circular

23/2015/

TT-BCT

Circular

38/2015/

TT-BCT

Circular

86/2015/

TT-

BGTVT

Decision

23/2015/Q

Đ-TTg and

TT

183/2015/T

T-BTC

2. Overview of PPP in Vietnam

Legal Framework

Lenders shall have the right to take

over, or to appoint another competent

entity to take over, all or part of the

rights and obligations of the

investor(s) or project enterprise

(project step-in rights) in the event

that the investor or the project

enterprise fails to fulfil the

obligations under the project contract

or loan agreements

Stakeholders and right to

take over the project

Lender

Authorized State Agency

The agreement on project

step-in rights

Type of PPP Contract and stakeholders in financing PPP projects

1. Investment capital for

constructing Project Facilities

applied for contract types where the

investment capital recovery and

profits are generated from user fees

but these proceeds are not enough

to cover costs.

2. Payment for the availability of

services provided by Investor under

BTL, BLT contract.

PPP Decree

3. Support in construction of

auxiliary constructions,

organization of compensation, land

clearance and resettlement.

Investment capital

for constructing

Project Facilities

Payment for BTL, BLT

Financial support of the State for PPP projects

Construction

period Operation period

Construction

period Operation period

Investment

need

Annual payment

CAPEX

subsidy

Investor

capital

for

CAPEX OPEX

OPEX

Investor

capital

for

CAPEX

State investment capital for PPP project implementation

PDF

Financial support of the State for PPP projects

11

INVESTOR

(Equity ratio must not be lower

than 15% of the total

investment capital)

LENDERS

During drafting PPP Decree, Government did a survey to estimate investors and lenders’ knowledge and experience in PPP projects and forecasting their opportunities and challenges with PPP in up-coming time

AND THE RESULT WAS…

6. National capital markets National capital market

12

INVESTOR

LENDERS

Both of them had lack knowledge about PPP and also long-term financing in a PPP project

* Most interested sectors: Transport and trade infrastructure. * Most interested project scale: small and medium scale projects (under 15 mil USD). * Most interested project term: short and medium term (5-10 years)

* Most interested sectors: Transport and social housing. * Most interested project scale: medium and large scale projects (under 100 mil USD). * Most interested project term: short and medium term (5-15 years)

National capital market

13

Bất cập, khó khăn trong quá trình triển khai PPP

Legal framework

Human resources

Finance resources

- PPP projects are governed by many laws and regulations. - Difficulties arise in implementing some articles of Decree No. 15 and Decree No. 30

Limited knowledge and experience of state officials in charge of preparing PPPs

State budget for PPP is limited.

Challenges in implementation of PPP program in Vietnam

National financing sources reach the limit.

The Government is not ready for providing some kinds of guarantee required by international lenders.

Contact

PPP Office (Ministry of Planning and

Investment)

Tel: 080 44681

Fax: 080 44323

Email: PPPoffice@mpi.gov.vn

Website: www.ppp.mpi.gov.vn