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Promoting Public Private Partnerships (11/01)
11/01/2011 - 53 Lượt xem
In January 2011, a regulation that is thought to create a breakthrough in investment in development will be launched. The Regulation on Pilot Public-Private Partnership Investment promulgated as an enclosure to Decision 71/QD-TTg dated November 9, 2010 will come into effect on January 15, 2011.
This regulation provides the conditions, procedures and principles that will be initially applied to a number of infrastructure development and public services projects under the PPP model. The regulation will apply to authorized state agencies, investors, individuals and organizations involved in the management, implementation of infrastructure development and public services projects.
PPP is a new model of cooperation in Vietnam, but it has been common in many other countries in the world for more than 50 years. Global experience shows that thanks to this model of cooperation, many issues affecting cities have been resolved such as traffic jams and problems related to water supply and employment generation.
PPP models combine the tasks of public service providers and the efficiency of one or more private businesses, allowing local governments to quickly meet the best international standards set for public services and facilitating the transfer of advanced, modern technologies.
The clean water supply project in the city of Shanghai, China, is a model that Vietnam can refer to. In 2002, the Shanghai Government signed with the French VE Group a contract on management of clean water supply services for 50 years. Since then, a Sino-France joint-venture company was established with a capital contribution rate of 50/50. VE supplies all services related to production and distribution of clean water, customer management and care, design and investment.
Subway Line No. 9 in the Republic of Korea's (RoK) capital of Seoul was built under the PPP model. Currently, this subway line serves about 256,000 passengers each day, and this number is forecasted to increase to 760,000 by 2013. Nearly 1,000 RoK people have been trained to be capable to operate this subway line and provide passenger care services.
The UK has applied PPP model for many years. In the UK, the State does and manages only what cannot be done by the private sector. Specifically, the State cannot share the administrative management function with the private sector. Therefore, the State of the UK encourages private investment in almost every field. The State rents and uses the infrastructure facilities that were built with private investment capital but is not involved in the management of those facilities.
Nguyen Van Tu, the deputy director of the Hanoi Planning and Investment Department, said, "In the recent period, the installment payment mechanism has created an impulse for world trade to develop. Under the PPP mechanism of investment in infrastructure development, the private sector invests in infrastructure construction and the State is the installment payer." He emphasized, "The Vietnamese are using the best products in the world, from mobile phones to autos. So there's no reason for Vietnam to delay the application of optimal mechanisms/policies like PPP."
On September 29, 2010, Singapore began to build the Singapore Sports Hub with modern equipment under the PPP mechanism. Construction of this project will finish in 2014 with total cost of nearly US$1 billion. The Singapore Sports Hub Consortium (SSHC), led by Dragages Singapore Pte Ltd, has won the bid for construction of this project. This is considered to be the world's largest PPP project.
For its advantages, many Vietnamese and foreign experts share the opinion that PPP will effectively stimulate the rural economy if this model of investment is promoted in rural Vietnam. The chairman of Kien Giang Province's People's Committee, Bui Ngoc Suong, said that in 2011, the province would cooperate with many other localities to develop a strategy to encourage both domestic and foreign private investors to invest in industrial zones, which gives priority to investment in modernizing equipment and technology and the formation of large processing centers.
Dr. Nguyen Van Hao, the head of Aquaculture Research Institute II under the Ministry of Agriculture and Rural Development, said, "In the time to come, it is necessary to promote PPP in biotechnology research and application in the fishery sector to help it develop in a sustainable manner, bring into play its advantages and create high economic value."
However, the first step is the hardest, and there will surely be difficulties in the initial period of applying the PPP mechanism. Previously, to join the World Trade Organization (WTO), Vietnam had to amend and supplement many regulations in accordance with international practices. Now, as guided by Prime Minister Nguyen Tan Dung, it is urgently necessary for Vietnam to promote PPP.
Thorough understanding of PPP and the application of this cooperation model will reflect an important step of economic management renovation in Vietnam. The 11th National Congress of the Vietnam Communist Party is hoped to pave the way for PPP to reap fruitful results. There's no reason to doubt that if PPP models are properly introduced they will lead to breakthrough changes in Vietnam in the 2011-2020 decade, and the country will have impressive new infrastructure./.
Source: VEN.
