The country was making efforts to innovate public investment in infrastructure development, shifting from heavy reliance on the State budget to mobilisation of private resources, said Vinh. Thus,international experiences would be useful, particularly as the country’s first regulations on PPP were not as fruitful as expected.

While the country needed about US$15-16 billion each year for infrastructure development, public spending could only provide about 50-60 per cent, he said. “The engagement of the private sector in infrastructure projects not only generates economic benefits but can also help improve investmentefficiency and project quality,” he said, emphasising that PPP could be a driving force for the country’s socio-economic growth.

CEO of JBIC Hiroshi Watanabe said that Viet Nam was the fifth-most promising country for overseas business in the medium-term and long-term as measured by a survey of 160 companies. A majority of respondents said that Viet Nam was promising for overseas operations because of the future growth potential of the local market and inexpensive labour.

However, the country also faced issues of underdeveloped infrastructure, a frequently changing legal system, difficulty in securing management-level staff, rising labour costs and intense competition. Over the last decade, Japanese companies that came to Viet Nam prospered, Wantanabe said, noting that since 2002, the bank provided $8.5 billion for public-private co-operation projects including Phu My 2 and three combined-cycle gas-fired power projects.

However, its funding for other southeastern nations including Thailand, Philippines, Indonesia and Singapore was much more significant. Minister Vinh said that thoughViet Nam had become a middle-income country, the country’s investment environment had many limitations including bureaucracy, cumbersome administrative procedures and unstable policies.

Moreover, the country faced a barrier that few countries did: the practice of relying heavily on the State budget, which did not prepare the nation to co-operate with private partners in infrastructure projects, Vinh pointed out. Therefore, Government-appointed investors, usually State-owned companies, took on many commercial bankable projects that should have been carried out under the PPP model.

The country was also revising PPP regulations so that they were more like internationalones and thus more attractive to investors, he said. In the next two years, Viet Namplanned to allocate VND20 trillion ($952 million) to PPP projects, Vinh said, adding that the large sum could potentially increase if the projects did well. Also at the meeting, representatives from the ministry and the bank inked a Memorandum of Understandingto boost co-operation on PPP.

Vietnamnews