Clearly, Vietnam has some problems in investing to develop transport infrastructure especially in road transport.
According to ADB’s comment in fact sheet 2008, the project implement delays are a president problem in Vietnam’s portfolio. In workshop of ADB about PPP to deliver infrastructure services to the poor in Vietnam 2006, ADB also indicated some specific problems affect development PPP in road sector including difficulty in land acquisition, non-viable toll rates, and access information for bids and absence of qualifying experience with private sector shuts them out of competitive bidding where State owned Enterprises qualify. Following to Vietnam infrastructure strategy of World Bank 2009, transport was ranked the third most severe constraints and it is seen greater constraint than neighboring countries. The most and the second-most important constraints on transport business are poor quality and poorly managed/ service delays.
Mr. Truong Thi Van Anh made a study to find the solution on how to manage toll-road project development effectively under PPP in Vietnam. In order to solve this problem, three objectives were needed to accomplish:
(1) To investigate the development parameters of toll-road project in Vietnam under PPP approach.
(2) To assess key existing parameters in Vietnam road project development through criteria for good project governance together with analyzing legal arrangement and project finance under SPV.
(3) To propose the recommendations to improve and apply the development of toll-road project in Vietnam under PPP approach based on key components for good project governance.
Conclusion
1. Analysis and assessment specific features in toll-road project development
The study focused on two main SPV perspectives including legal arrangement and project finance. When analyzing the information collected, the researcher recognized that the project is only labeled PPP approach but the implementation process is entirely different. It stems from the lack of the proper legal framework for project development in form of PPPs. Both the government authorities and private developers still don’t have enough experience as well as thorough understanding about PPP aspects. Even the evaluation of economic efficiency and financial performance has still not been paid due attention. The financial status for developing projects depends on bank loans and the bank control all activities related to the project’s financial. Overall, the private investor who suffers the highest risk in toll-road project development and lacking of sharing with the public sector. In toll-road development, Binh Phuoc province in particular as well as Vietnam in general, both public and private sector only care about short-term goals and lack of long-term vision in planning and investing project.
2. Assessment of critical factors for good project governance
Based on the study of Abednego and Ogunlana in 2006, the key components of good project governance include five factors such as: (1) fairness, (2) transparency, (3) accountability, (4) sustainability and (5) effectiveness; the researcher assesses toll-road project development in Binh Phuoc province. This assessment was based on the results of the analysis project information along with five key factors. Therefore, discovering what kinds of project governance is essential to identify source of problems and to help to determine the best strategic solution. Specifically, the road project in this study has significant issues. In terms of fairness, the result of project’s feasibility based on optimistic data and the contactors and investors had effort to accept the poor design and master planning. Moreover, the government cannot support PPP legal framework as well as lack of document process and competitive environment. On the subject of transparency, it was discovered that the information management is quite cumbersome and lack of understand among stakeholders. Additionally, no proper planning in financial management, and the financial strategy is not clear, ensue investment strategy is ambiguous. As for accountability, the revenue expected in future bases on the optimistic data and lacking of the strategic economic development or the guarantee of traffic demand from the government. The quality is also not sure by the unclear relationship among investors, main constructor and supervisor together with lack of experience in management capability. Besides, the lack of coordination between the related parties led to an inconsistent infrastructure development across the country and also as a large number of unnecessary conflicts. However, the conflict resolution approach is not sufficient and it will affect the sustainability of project in long-term so that it will be so difficult to encourage the potential private investors participating in infrastructure development in the future. In administration practice, particularly relating project documentation process also requires improvement including essential historic sources of risks and consequences can be compiled. By having this information, the future project can be carried out more effectively.
Recommendation for improving toll-road project development in Vietnam
The development of road transportation is the most important objective of Vietnam in current period. Through the governance assessment of National Highway 14 was to show the weakness and limitation of Vietnam in participation of private investment. In order to improve better project governance and attract more private participation, the researcher would like to summarize the main recommendation as detailed in the table below.
His thesis abstract is copied and posted.
Abstract
Transport infrastructure development plays important roles to increase economic activities. So the Vietnamese government is very interested in investing for construction and improvement of transport. The participation of private contributions in transport infrastructure will help to reduce financial burden for the government. Public – Private partnership (PPPs) model is gradually applied in Vietnam to ensure the financial viability of the project as well as to improve quality and technical.
This study was conducted by case study methodology to fulfill three objectives. Firstly, investigation parameters for toll-road development in Vietnam under PPP approach. Secondly, assessment key parameters through criteria for good project governance together with analyzing SPV legal arrangements and project financing. Finally, base on the assessment results, recommendations for improving the development of toll-road project in Vietnam under PPP approach.
The results of this study found that both central and local government try to facilitate for participation of private sector in investment transport infrastructure but there are still many inadequacies. It is indicated through the assessment of five components including fairness, transparency, accountability, sustainability and effective. It also shows that Vietnam has not yet created a good environment for the application of PPP model in developing transport infrastructure.
