Vietnam’s Ministry of Planning and Investment and the World Economic Forum (WEF) have jointly launched the Vietnam Infrastructure Working Group (IWG) in a bid to encourage private sector investors, particularly foreign ones, to participate in the country’s infrastructure development.
At the November 23, 2018 launch of the IWG in Hanoi, Minister of Planning and Investment Nguyen Chi Dung said the country’s socioeconomic development strategy for 2011-2020 regards the development of infrastructure, particularly for transportation and urban areas, as one of the key tasks and one of three strategic breakthroughs that have to be achieved, reported VNA.
Despite the huge demand, investment in the sector remains restricted, Dung said, adding that the share of development funding coming from the private sector is less than 10% of the national total.
“Therefore, the mobilization of investment source from private sector into infrastructure development is a matter of great concern for the Vietnamese government,” Dung said.
Dung said the launch of Vietnam IWG is expected to help the government streamline policies, especially on public-private partnership (PPP) investment, to attract more private capital flows, reported HanoiTimes.
“At the moment, Vietnam is going to build the PPP investment law, which will be the most important legal framework to create confidence for both domestic and foreign investors,” Dung said.
For his part, Justin Wood, head of regional agenda for Asia-Pacific and member of the Executive Committee at WEF, said infrastructure is the foundation of any economy and needs to be developed through cooperation between the public and private sectors. What Vietnam must do is to create a common space for both public and private sectors to work together in this field.
He said he hoped the IWG would act as a facilitator for the government and enterprises to work together, share ideas, and make recommendations for a more effective and successful public-private partnership.
The WEF will help Vietnam navigate the next phase of growth in age of the Fourth Industrial Revolution, and one of the seven pillars in the cooperation is to make policy recommendations on the future of long-term investment, infrastructure and development, which will be done by the working group, he said.
Vietnam IWG consists of senior executives from both public and private sectors who will facilitate interaction and partnership among stakeholders in financing and developing infrastructure projects.
This year, the working group plans to examine policies and identify issues in them to assist in drafting the law on PPP investment, while making recommendations in four key areas, one of which is building the legal framework for implementing PPP projects.
Vietnam has an ambitious master plan to completely transform the nation’s sluggish infrastructural platforms so as to attract investment and business, promote industrial hubs, and increase the GDP.
The ASEAN member state reportedly needs about US$480 billion in infrastructure investment by 2020. This is to help fund additional projects in the pipeline that include around 11 power plants with a total capacity of 13,200 megawatts and about 1,380 kilometers of highway. At present, the state budget can only meet one-third of its actual financial needs.
Initial discussions between the Ministry of Planning and Investment and the WEF on infrastructure development and investment were held at a workshop November 16, 2017 in Hanoi, where they asked participants for suggestions on how to push sustainable infrastructure development, especially through the PPP form.
Alex Wong, head of global challenge partnerships and member of the Executive Committee of the WEF, suggested that the business sector and economists exchange views on challenges hindering PPP in Vietnam, and expressed hope for the establishment of a working group on Vietnamese infrastructure development.
Photo: [Tycho] talk