Chairman’s Insights May 13th 2019
The push and pull for Public Private Partnerships.
With the continued rapid development of Vietnam and the growing rate of urbanisation and the growth in the middle class, the Government is finally accepting that one of the best solutions to fill the massive gap in the funding needs, is to improve the PPP regulatory environment and to address gaps still remaining under the 2018 Decree 63.
However, in spite of the fact that many investors consider the PPP regulations to be lacking and not workable many companies and sectors are opening up to PPP consideration, including the healthcare sector, the energy sector, water treatment, solid waste management and transportation sector. All this is creating new interest in investment in infrastructure in Vietnam.
Ho chi Minh city has just released a list of 210 projects calling for investment and the top 20 projects with a value of over US$ 15 billion are nearly all slated to be developed under BOT or PPP. These 20 projects are in the fields of Transport, Agriculture, Healthcare, Culture and Tourism.
In the energy sector Dragon Capital a London Listed Investment Fund have just completed a 40 MW solar power plant in Binh Thuan Province together with their industry partner Pacifico. There are also a host6 of other solar projects rushing to complete, in order to benefit from the concessional feed in tariff of US 9.35 cents per KW hour, offered by the Government, which ends on June 30th 2019.
In healthcare, the Government is encouraging the private sector to invest in the healthcare sector, especially in hospitals and grass roots health care facilities because of the serious overcrowding in the current facilities. Also under current policy reforms ICT development, infrastructure, medical devices high tech services and green facilities are all open to foreign and domestic investment. Companies such as Bayer Pharmaceuticals, Zuellig Pharma and Siemens are all discussing possible cooperation through PPP models to help accelerate improvements in the healthcare sector.
In solid waste management INSEE a subsidiary of Siam City Cement have developed a solid waste treatment to energy project under a PPP with the local authorities
All this is positive news for those either interested in investment and the beneficiaries of the outputs from the various sectors listed in this article and hopefully a push to the Government to make further improvements to the PPP regulations and open up more infrastructure projects to PPP like airports and public transport.
Kenneth M Atkinson