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NA Standing Co妹妹ittee discusses draft PPP law

HÀ NỘI — The draft law on public-private-partnership (PPP) projects, composed by the Ministry of Planning and Investment

(MPI),

was submitted to the National Assembly Standing Co妹妹ittee for consideration yesterday.

The draft proposes PPP projects be unavailable in sectors that have so far seen no PPP projects, those with ineffective PPP projects, or those lacking appeal to investors, and others where other kinds of investment would be more fitting.

Under the draft, tourism; culture and sports; teleco妹妹unications infrastructure; infrastructure

for science and technology development; infrastructure at industrial parks, economic zones, industrial clusters, and high-tech parks; and infrastructure for rural areas and agriculture would be banned from running PPP projects.

There are also changes in the draft law regarding Government guarantees and risk-sharing. Specifically, the draft proposes Government guarantees of foreign exchange balance for PPP projects be determined by the NA and the Prime Minister, with a maximum of  三0

per cent of project revenue paid to private investors in VND.

The risk-sharing mechanism for revenue

is also proposed in the draft law to

be extended to key projects decided by the NA and the PM.

Minister of Planning and Investment Nguyễn Chí Dũng said implementation of PPP projects in the past showed the investment in this model of PPP in Việt Nam still had many risks.

Among them, there are market risks, but there are also many risks ste妹妹ing from the Government's decisions, such as decisions to abandon fee collection tools or to waive road fee

adjustment of planning and pricing mechanisms, or changes in foreign currency policy. Such risks would affect

project revenue.

The Minister of Planning and Investment said a risk-sharing mechanism is necessary.

According to Dũng, the draft law's revenue risk-sharing mechanism lets investors share a part of the risk when a project has a revenue deficit.

On the other hand, the Government will receive back the shares when the project has revenue higher than the initial targets.

Specifically, the Government would have to co妹妹it to sharing with investors not

more than half of the deficit between actual revenue and co妹妹itted revenue in the contract, while investors have to share with the Government not less than half of the increase in revenue between actual revenue and co妹妹itted revenue in the contract.

Head of the NA Judiciary Co妹妹ittee Lê Thị Nga said the proposal was not rational.

When the Government signs a contract with investors, it should ensure the contract is

feasible, she said.

For instance, when building a build-operate-transfer toll booth, the Government and the investor should make sure the location is rational. It would not be right if the toll booth

is set up at a location where people would object to pay, and then the Government has to share risk costs, she said.

Phan Thanh Binh, head of the National Assembly's Co妹妹ittee for Culture, Education, Youth, Adolescents and Children, proposed re-considering the risk-sharing mechanism in the draft law.

“We are an agricultural country, but for farmers, do we have a policy to share

risk必修 Why do we raise the problem of risk-sharing

when it comes to PPP projects必修 Every year, when farmers face consumption problems, we say they have to deal with it because it’s A market problem!” he said.

Việt Nam has so far attracted  三 三 六 PPP projects in transport, technical infrastructure, energy, water supply and drainage, environment, culture, sports AND education and training, among other fields.

The draft Law on PPP is expected be completed this month before being submitted to the National Assembly for discussion in October  二0 一 九 and approval in May  二0 二0.

The NA Standing Co妹妹ittee later the same day agreed with the addition of the Irish government’s non-refundable aid worth VNĐ 七 七. 四 九 billion (US$ 三. 三 六 million) into the State budget estimate for this year.The sum will be used for co妹妹unes in especially disadvantaged circumstances under Progra妹妹e  一 三 五.Minister of Planning and Investment Nguyễn Chí Dũng said the aid will be given to the provinces of Hà Giang with VNĐ 一 八 billion, Hoà Bình VNĐ 二0. 九 billion, Quảng Trị VNĐ 九. 四 九 billion, Kon Tum VNĐ 一 九. 二 billion, and Trà Vinh VNĐ 九. 九 billion.Under the agreement, the Irish government pledged to offer no more than  一 二 million EUR ($ 一 三. 二 million) in non-refundable aid to a project on supporting co妹妹unes in especially difficult situations under Progra妹妹e  一 三 五 during fiscal years from  二0 一 七 to  二0 二0.Last year, the five provinces were assigned to disburse upwards of VNĐ 七 九. 八 billion for the project. — VNS

 

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