One of the reasons for this situation is insufficient funding from the state budget. Public – private partnerships (PPP) are expected to help mobilize capital for transport infrastructure. Our VTV reporter Thanh Hải has more.
The Public – private partnership model has proved an effective way of raising funds from non-governmental sectors. As of 2015, private investments have contributed about 18 billion USD for transport infrastructure development.
Director General, Procurement Management Department, Ministry of Planning and Investment Le Van Tang said: "Private investments are used for projects in many areas, such as electricity distribution, roads, railways, sea transport and aviation"
Besides investment from private domestic firms, the government has called for capital from foreign investors in the transport sector. At an international transport conference held in Hanoi on Wednesday, some foreign investors said that they saw potential in Vietnam’s transport market.
Frederic Dupeyron, CEO, Aeroports de Paris Management Corp said "Aeroports de Paris is interested by new prospect of Vietnamese aero ports market which is developing over the last 2 years. Aero ports have growth of 15% year on year in Vietnam, which is one of the most attractive markets in the world."
Alexandre Lapeyre, Project Development Manager, Vinci Group Vietnam said: We are following with a lot of interest in development of the equitisation projects for airport operation of VN, but also the new airport in HCM City.
In the next 5 years, the demand for transport infrastructure is estimated to reach roughly 500 billion USD, of which 60% will need to come from the private and foreign sectors. In order to meet this demand, in February and March this year, the government released 2 new decrees on PPP projects which offer investors clearer understanding about PPP projects as well as a more favourable environment to make investments.
"People want to ensure whether they invest their money in a stable, well- defined environment, so we’ve been working with MPI, MOT and other agencies to actually put in place that environment. We set the new decree 15 that has been issued. That’s a huge step forwards, in terms of putting in place a very clear framework", Mr Paul Valley, Transport Coordinator, World Bank said.
However, also according to representatives from the World Bank, gaps still remain in the investment environment. Vietnam should enhance bankable project screening and selection, make use of the Project Development Facility, provide substantial funding and staff support, and structure credit enhancements, guarantees and funding mechanisms.
