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VIAC and VCCI cohost Launching Seminar of Review report on public-private partnership (PPP) model contracts & report on mobilizing new financing to infrastructure projects in Vietnam.

Dec 07, 2023
HANOI, Vietnam – On the morning of 16 November 2023, Vietnam International Arbitration Centre (VIAC) and Vietnam Chamber of Commerce and Industry (VCCI), with the technical assistance of United States Agency for International Development (USAID), cohosted “Launching Seminar of Review report on Public-private partnership (PPP) model contracts & Report on mobilizing new financing to infrastructure projects in Vietnam”.  

The overview of the Launching Seminar

Within the framework of “Technical assistance for capacity and resilience enhancement and sustainable development”, VIAC and  the Vietnam Chamber of Commerce and Industry (VCCI), with the technical assistance of the United States Agency for International Development (USAID) have authored reports on reviewing the PPP model contracts and mobilizing new financing for infrastructure projects in Vietnam. These reports, which developed through a series of consultation workshops held in 2022, 2023 selectively absorbed the advice and consultation of representatives of central and local state agencies, domestic and foreign investors, business associations, research institutes, etc., The authors of these reports made efforts to appropriately include the practice of implementing PPP projects in Vietnam in recent years; thereby, proposing measures and proposals towards further improvement of mechanisms, policies, and legal framework as well as increasing the efficiency of PPP projects in Vietnam.

After a thorough drafting, consultation, and finalization, VIAC and VCCI cohost “Launching Seminar of Review report on public-private partnership (PPP) model contracts & report on mobilizing new financing to infrastructure projects in Vietnam.” This launching seminar was attended by more than  200 delegates encompassing both in-person and virtual attendees, and including representatives from local state agencies, project management boards, business legal department, lawyers, legal experts, representatives from educational institutions, and media units.

Dr. Vu Tien Loc – Chairman and President of the Vietnam International Arbitration Centre (VIAC) delivered his opening remark at the Launching Seminar

In the opening speech, Dr Vu Tien Loc –Chairman and President of the Vietnam International Arbitration Centre (VIAC), Delegate of the Vietnam National Assembly, Member of Economic Committee of  Vietnam National Assembly emphasized that investing through the Public-Private Partnership (PPP) is deemed the most promising model for attracting resources in finance, competencies and technological advancements from the private sectors, engaging in the building of infrastructures to promote socio-economic development, thereby reducing the burden on state budget. In other terms, PPP serves as a remedy for state's investment capital deficiency, supporting the investments that require funding without increasing the government's debt burden from the initial stages. Nonetheless, even though the 2020 PPP Law and related decrees issued since 2020 have unified and institutionalized the guiding orientations of Party and Government regarding the development of the national infrastructure system in general and the mobilization of private resources through PPP investment in particular, the practical implementation of PPP projects in Vietnam still faces many challenges and obstacles.

Accordingly, the Review report on Public-private partnership (PPP) model contracts & the Report on Mobilizing new financing to infrastructure projects in Vietnam launched today is result of a thorough working process by experts from VIAC, and with technical support from USAID, in order to present recommendations and valuable insights to enhance the perfection of PPP contract templates and offer specific information on resource mobilization activities for PPP projects. This aims to contribute positively to the development of infrastructure projects in Vietnam.

Mr. Nguyen Tien Huy - Director of the Office for Business Sustainable Development - Vietnam Chamber of Commerce and Industry delivered his opening speech

Representative of Vietnam Chamber of Commerce and Industry (VCCI), Mr. Nguyen Tien Huy – Director of the Office for business Sustainable Development – shared that: “If we consider the public-private partnership (PPP) contract as a “marriage” between the public and private sectors, then, like any enduring marriage, it is crucial to have agreements and marriage contracts that achieve consensus between the public and private sectors. This is the purpose of constructing PPP model contract that ensures equality, coherence, clear delineation, and a balance of roles, responsibilities, costs, and risks. This ensures a harmonious alignment of interests and rights between the public and private sectors”.

The two reports presented at the launching seminar today were conducted based on reviewing current PPP legal practices, incorporating feedback, recommendations, and contributions from the private business community as well as appropriately absorbing international experiences. Therefore, the information included in the report provides valuable guidance for investors and relevant authorities in the implementation of PPP projects. It also serves as a reference for government agencies when undertaking future PPP projects. The success of these reports is evidence of the effective collaboration in research and improvement between VCCI, VIAC, and USAID in the field of PPP.

The Review Report on Model Contract for BOT, BLT And O&M Projects in Viet Nam was introduced by Dr. Le Dinh Vinh, LL.M., Director of Vietthink Law Company, VIAC Arbitrator. Then the Report on Mobilizing new financial to Infrastructure projects in Vietnam was presented by Mr. Phan Vinh Quang, Head of Research Team, AEO Project, United States Agency for International Development (USAID).

Dr. Le Dinh Vinh, LL.M., Director of Vietthink Law Company presented  Report on Public-Private Partnership Model Contract in Vietnam

Mr. Le Dinh Vinh highlighted that the importance of drafting and issuing PPP model contracts as a pivotal step in creating a set of uniform criteria and standards for PPP contracts, ensuring align with legal regulations, current legal standards, and practical norms. He also emphasized that the report served as useful guidance for investors, project enterprises, and relevant authorities in applying BOT model contracts to negotiation, signing, and implementing BOT contracts. Besides, the authors group also expresses the expectation that this report will serve as an crucial important reference material for authorities in the formulation and issuance of detailed guidelines for BLT and O&M contracts, with the ultimate goal of issuing BOT and O&M model contracts in the future.

Please find further information and download the Review Report of BOT Contracts, BLT Contracts, and O&M Contracts in Vietnam HERE.

Mr. Phan Vinh Quang, Head of Research Team, AEO Project, United States Agency for International Development (USAID) presented the  Report on Mobilizing new Financial resources for Infrastructure Projects in Vietnam

Regarding the Report on Mobilizing new financing to Infrastructure Projects in Vietnam, this report was conducted to examine new and innovative methods implemented worldwide to attract investors and organizations into infrastructure projects as well as evaluated the factors that attract investors to Vietnam. Additionally, this report highlighted the challenges that Vietnam is currently facing. In Vietnam, there are not many high-quality investment projects and infrastructure projects adhering to the Environmental, Social, and Governance (ESG) standards, while the legal system and procedures remain complex. Moreover, the limited scope of the bond market, coupled with a scarcity of commodities, instills caution among investors considering investment in the Vietnamese market. In light of these challenges, Mr. Phan Vinh Quang also presented recommendations to address these issues and attract investors who wish to invest in the Vietnamese market.

Please find further information and download the Review Report on Mobilizing new Financial resources for Infrastructure Projects in Vietnam HERE.

In the discussion session of the seminar, guest experts and participants offered feedback and actively participated in discussions regarding the two reports. This collaborative effort was aimed at providing the author group with additional insights from both a research and practical standpoint. The objective was to contribute to the comprehensive development of the two aforementioned reports.

Mr. Nguyen Bac Thuy, Head of the Investment & Construction Contract Department, Department of Construction Economics - Ministry of Construction, Executive Committee Member of the Construction Law Association of Vietnam (SCLVN), Arbitrator at VIAC, delivered his speech in the Seminar

Sharing his thoughts on the report, Mr. Nguyen Bac Thuy evaluated both  reports as highly beneficial and crucial in terms of directly addressing and analyzing BOT, BLT, and O&M contracts as specific issues and practical aspects related to PPP. According to Mr. Nguyen Bac Thuy, this is an excellent resource not only for government agencies but also for the PPP stakeholders in the negotiation process and the formulation of PPP contracts, especially the three aforementioned contracts. With these results, he expressed hope that in the future, the research group, under the guidance of VCCI and VIAC, would continue to research other contract templates, standard forms etc. This would serve as a foundation for government agencies to review and compile model contracts that align with legal regulations and meet practical needs.

Ms. Nguyen Phuong Que, Department of Public Procurement, Ministry of Planning and Investment

Providing an additional perspective from government agencies, Ms. Nguyen Phuong Que from the Department of Public Procurement, Ministry of Planning and Investment, expressed high regard for the research outcomes presented in both reports. Regarding the review of PPP contract templates, she agreed with the report's observation that only the Ministry of Transport has issued a model BOT contract. Given the current legal framework, there are no regulations on model contracts in each specific field. Therefore, the review content of the report is very useful for all parties involved in PPP across various sectors. Concerning the report on mobilizing financial resources, the financial tools mentioned in the report have indeed been applied in some countries and partially realized in certain PPP projects in Vietnam. However, the utilization and implementation of these tools are still limited, and the advantages analyzed in the report have not been fully exploited. Ms. Phuong Que also expressed hope that the content presented in these two reports will be valuable information not only for government agencies but also for potential investors both domestically and internationally in the coming time.

Assoc. Prof. Dr Tran Chung, Preident of the Vietnam Association of Road Traffic Investor (VARSI), VIAC Arbitrator delivered his speech in the Seminar

Continuing the discussion on the reports, Assoc. Prof. Dr. Tran Chung, President of the Vietnam Association of Road Traffic (VARSI), VIAC Listed Arbitrator, expressed delight that, in addition to BOT contracts, there will soon be two new model contracts: BTL and O&M. These new contract models will provide opportunities for a broader application of PPP and more suitable models beyond just BOT. Assoc. Prof. Dr. Tran Chung also noted that land clearance is one of the challenging issues for many projects, suggesting that the regulation must clearly defining the responsibilities of the relevant government agencies in terms of quality of the project and labor safety management.

Mr. Pham Anh Tuan, Vice President of the Construction Law Association of Vietnam (SCLVN)  delivered his comments in the Seminar

Mr.Pham Anh Tuan, Vice President of the Construction Law Association of Vietnam (SCLVN), evaluated this report as pioneering. In terms of investment, Asia currently holds the largest pool of resources that needs to be unleased. Typical funds such as retirement funds, long-term investment funds, sources from life insurance companies, general insurance, and capital from commercial investors, always require long-term investment portfolios to ensure the sustained development of construction resources. PPP contracts are always complex, involving many parties. Mr. Pham Anh Tuan suggested considering stringent criteria, i.e., specific conditions related to pricing, service fee increases. All that require strict conditions and quality service outputs should be subject to rigorous control to reduce unnecessary processes. The more stringent and explicit the terms, the more confident investors will be.

Assoc. Prof. Dr. Duong Dang Hue, Former Head of the Economic-Civil Law Department at the Ministry of Justice delivered his speech in the Seminar.

Assoc. Prof. Dr. Duong Dang Hue, Former Head of the Economic-Civil Law Department at the Ministry of Justice, who also has contributed to the reports in previous consultation workshops highly appreciates the practical significance of drafting and finalizing these two reports. He also shared that compared to the versions discussed in the previous consultation workshops, the reports published today are more refined not only in terms of content but also in their scientific and theoretical aspects for each addressed issue. Dr. Hue also emphasized that given the complex nature of PPP projects, the existing legal framework might still benefit from more specific guidelines. He suggested the prompt completion and issuance of PPP contract templates for different models to facilitate and minimize risks during the implementation of PPP in Vietnam.

Mr. David John Whitehead, Vice President of Australian Chamber of Commerce in Vietnam (Auscham) delivered his comments in the Seminar

Representing the Australian Chamber of Commerce in Vietnam (Auscham), Mr. David John Whitehead, Vice President of Auscham shared that the Australian businesses community always pays significant attention to investment opportunities in Vietnam which may include large-scale renewable energy projects such as offshore and onshore wind power, solar energy, and waste-to-energy projects, etc. as well as other infrastructure development projects. Considering the context of the strategic partnership between Vietnam and Australia has been flourishing recently with many positive developments in trade and investment cooperation, the two reports announced today also serve as valuable resources for investors from Australia. He also added that among the issues raised in the two reports, the concern of foreign businesses in general, and Australian businesses in particular, is transparency in PPP investment. Mr. David, representing the Australian business community in Vietnam, expressed the expectation that the stages of PPP investment implementation will ensure compliance with regulations on transparency as mentioned in the Law on PPP and Decree 35/2021/NĐ-CP.

Representing the two research groups responsible for the report, Dr. Le Dinh Vinh and Mr. Phan Vinh Quang also participated in discussions and provided feedback on the opinions expressed during the seminar. In a spirit of attentive listening and reception, the research group will continue to develop the content, closely aligning with the practicalities of PPP activities in Vietnam.

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Attachment:

  • View and download Seminar Material HERE
  • View and download Video record HERE

 

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