Vietnam eyes PPPs to plug infrastructure gap

Subject

The emerging infrastructure investment framework in Vietnam.

Significance

Vietnamese infrastructure lags some regional competitors; Hanoi estimates that investing 500 billion dollars could resolve this, but needs 300 billion of this to come from public-private partnerships (PPP). Following problems with Vietnam's PPP regulatory framework, a new framework was introduced in April and a new public investment law in January, among other measures seeking to attract private capital into national infrastructure. Such measures are timely: the ASEAN Economic Community is coming in late 2015, while Vietnam signed a free trade deal on May 29 with the Eurasian Economic Union; capitalising on both requires Vietnamese infrastructural development.

Impacts

• The government may need to delay some projects while private capital comes online.
• As government and industry adapt to the new infrastructure investment framework, updates to planning instructions may be needed.
• A concerted anti-corruption campaign would support efficiency drives in infrastructural development, but progress will be slow.