State component in public-private road projects likely to rise

By Anh Minh   October 27, 2023 | 11:15 pm PT
State component in public-private road projects likely to rise
Nguyen Manh Hung, a standing member of the National Assembly’s Economic Committee, speaks during a discussion in the NA on Oct. 27, 2023. Photo courtesy of the National Assembly
National Assembly deputies expressed broad support for a draft resolution to increase the public share of public-private partnerships constructing roads to 70% from the current 50%.

Commenting on the draft resolution on Friday, Tran Hoang Ngan, a Ho Chi Minh City representative, said increasing the state component in PPP road projects makes sense. It would help such projects attract more resources.

Nguyen Manh Hung, a standing member of the legislature’s Economic Committee, said while increasing the state component would resolve their funding problems, what concerns investors is the efficiency of PPP projects and so in addition to hiking the state component lawmakers should also create a clear mechanism for investors to see the effectiveness of investing in the project.

Minister of Transport Nguyen Van Thang said investors are usually focused on two things when putting money in a road project: its effectiveness and speed of handing over land for the construction. "Increasing the state capital ratio will make PPP projects more attractive; the current 50% ratio is a constraint."

Deputies also discussed devolving authority to cities and provinces to invest in expressways to speed up work.
Another proposal by the Government is to allow investors and construction contractors to mine construction materials themselves to avoid shortages and price volatility.

The National Assembly will vote on the draft resolution on Nov. 28.

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