PPP –optimal solution to infrastructure investment in HCM City

09:15 | 16/06/2017 Investment

Public-private partnership (PPP) is one of the optimal solutions to investment attraction for infrastructure projects in Ho Chi Minh City, said Chairman of the municipal People’s Committee Nguyen Thanh Phong.

Illustrative image - Source: VNA

The city has so far launched 153 PPP projects worth 451 trillion VND (19.6 billion USD) , 23 of them valued at 71 trillion VND have been completed while others are in the preparatory phase, he said at a conference on June 14 to review investment attraction for PPP infrastructure projects.

HCM City has issued a number of policies to improve business climate, notably the establishment of the PPP Steering Committee, he said, adding that it is working to set up the Project Development Fund (PDF) and the Viability Gap Fund (VGF) to provide funding for PPP projects, he said.

According to Phong, from 2006-2020, the city’s capital demand amounts to 850 trillion VND but the municipal budget only meets 20 percent.

Total investment for transport, environment and flooding control projects is estimated at over 500 trillion VND, but the city’s budget satisfies a mere 31.8 percent, he further said.

Nguyen Thi Thu Hoa, Deputy Director of the municipal Department of Planning and Investment, said the city recorded 18 projects worth more than 59 trillion VND in the build-operate-transfer, build-transfer, build-transfer-operate, and build-own-operate models during 2004-2015, 15 of them are in transport field.

After the government issued Decree 15/2015/ND-CP on February 14, 2015 on investment in PPP, the city embarked on five projects with a total investment of around 12 trillion VND.

A representative from the Ho Chi Minh City Finance and Investment State-owned company (HFIC) suggested the city step up administrative reform, provide transparent planning information, and soon establish PDF and VGF to channel funding into PPP projects.

Theo VNA