Investors are still awaiting the law

They plan to make investments after the legal framework becomes clear. However, the law has yet to be enacted. 

According to MPI (Ministry of Planning and Investment), Vietnam needs $25 billion a year in the 2016-2020 period to develop infrastructure, a two-fold increase from five years ago.

However, no Build-Operate-Transfer project has been implemented in the last two years, simply because investors are still awaiting the law.

Vu Quynh Le from MPI said PPP is covered by many laws, including the Law on State Budget, the Law on Public Debt Management, Investment Law, Public Investment Law, Enterprise Law, Construction Law and others. 

Meanwhile, the laws focus on regulating public and private investment activities, but do not take into account the special characteristics of PPP investment.

According to Pham Quang Dung, chair of Tasco, under tcurrent laws, the construction finalization is implemented after every PPP project. 

However, the problem is that there are too many inspection tours and inspection agencies. The State Audit, independent auditors and state agencies’ inspectors all have the right to examine projects and each of them gives its own results.

“The State needs to choose only one agency for the finalization and auditing and set time limit for the works,” he said, adding that state agencies can conduct the examination at any time they want.

No BOT project has kicked off in the last two years. Experts said PPP projects would restart only when a completed legal framework is finished. 

The government once applied many measures to encourage domestic and foreign investments in PPP projects.

In 2015, the government issued Decree 15 on PPP investments and Decree 30 on implementation of the Bidding Law. Eight legal documents were issued that clarified the provisions of the two decrees. However, no project was implemented in accordance with the two decrees.

Most projects are still in the preparation period, while the projects under construction or operation are still covered by the old legal framework set in 2009. 

According to Luu Xuan Thu, deputy CEO of Deo Ca Company, investors do not make PPP investments because of the high ‘policy risks’. Few investors can satisfy the requirements stipulated in Decree 15.

In the latest news, MPI said at a workshop in March that the draft PPP law would be submitted to the government by 2020. This means that the law would not be enacted prior to the end of 2021.

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Kim Mai