At a workshop themed ’Private investment in Southeast Asia’ which took place recently in Ho Chi Minh City, Joseph Lacson, the chief investment officer of Frontier Investment and Development Partners (FIDP), said that private investors in the world are very interested in the potential for PPP development. Vietnam is stepping forwards in developing this form of investment and it promises many opportunities for private investors and investment funds in the world to invest in the country in the form of PPP.

Dang Xuan Quang, the deputy director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that private investment plays an increasingly important and decisive role. Domestic and foreign investment from the private sector has contributed considerably to the growth of the Vietnamese economy.

In its development orientation, the Vietnamese Government attaches much importance to private investment in all fields, especially infrastructure development. The potential for PPP expansion in Vietnam is large and the country must have appropriate policies and create a favorable environment to attract capital from private investment funds. According to the Ministry of Planning and Investment, for the next 10 years Vietnam will need at least US$160-180 billion to invest in infrastructure development projects and more than 50 percent of that amount will be raised from the private sector.

Vietnam is piloting the PPP investment model and gradually establishing a market for PPP investment pursuant to Decision 71 regarding Regulation on Public-Private Partnership Investment Piloting. The Ministry of Planning and Investment is considering 24 projects proposed by different ministries and sectors, which aim to call for domestic and foreign investment in the form of PPP. Those projects cover eight areas and only one of them is in the field of public service, medical examination and treatment. Total investment in the 24 projects is about US$20 billion.

Dang Xuan Quang said that in the future the Government will take the initiative in making reports and putting the projects out to international tender in order to choose suitable construction consultants and private partners for the projects. The Government will allow pilot application of the PPP investment model to those projects within 3-5 years. If the model proves successful, it will be popularized. This is an opportunity for Vietnam to attract PPP investment for sustainable development. Representing investors, Keith Allman, the investment manager of Bamboo Finance, emphasized that new emerging and rapidly growing markets like Vietnam offer great opportunities for PPP development. Investors are seeking investment cooperation in the form of PPP.

However, to attract PPP investment effectively and to ensure the success of PPP investment projects, the government and investors must have consensus on investment purposes and be willing to promote long-term cooperation. In the Southeast Asian region there have not been large-scale PPP projects and it is very difficult to anticipate the future of the PPP market.

Jonathan Pincus, the dean of the Fulbright Economics Teaching Program, said that the biggest limitation of Vietnam is the lack of consistency between central and local organizations as well as between different localities in developing projects and managing the business environment. It is this limitation that will make investors hesitant.

Therefore, projects for which public investment is called must match the State’s interests with investors’ so that PPP can be really attractive to foreign investors. Most importantly, it is necessary to balance the interests of the State and investors. Each project must be considered carefully to ensure high effectiveness. If Vietnam can do those things well, there will be big opportunities for it to attract private investment.