Public-private partnerships for sustainable development

PPPs is not only a model to access private finance and capital for deployment in public infrastructure projects, but can also take advantage of new technologies and efficiency gains by using the private sector.

Hanoi - Hai Phong highway project

The role of PPPs in the UN’s SDGs

To implement the United Nations’ Sustainable Development Goals (SDGs) outlined in the Agenda 2030 for Sustainable Development, Vietnam and other countries around the world are committing to achieving social and environmental goals in a fair, equitable, and sustainable way. The SDGs are comprehensive and ambitious, and require a shift in how we think about infrastructure development.

SDG 9 is “building resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation” and directly supports Target 9.1 to “develop quality, reliable, sustainable, and resilient infrastructure…to support economic development and human well-being, with a focus on affordable and equitable access for all.”

Effective partnership with the private sector—including through PPPs—is recognized in Agenda 2030 as key to achieving the SDGs and “people-first PPPs” recommended by United Nations.

According to Mr. Nguyen Quang Vinh, Vice Chairman of VCCI, the demand for investment in infrastructure, such as energy, transportation, education, and healthcare, is very high in Vietnam. Public investment alone is insufficient to address the demand, but private capital is readily available. PPPs is an appropriate solution to bridge the gap and bring benefits to both the Government and investors.

PPPs is not only a model to access private finance and capital for deployment in public infrastructure projects, but can also take advantage of new technologies and efficiency gains by using the private sector.  These are important benefits that plays a key role in implementing SDGs.

The role of PPPs in Vietnam’s sustainable development

Over the last 20 years in Vietnam, more than VND 1,609,295 billion of capital investment has been made in developing national infrastructure.  Many provinces and several cities switched select infrastructure projects from a “public investment and public management” model to a “private investment and public usage” model.

The immediate benefit of the PPP model is clear: the government does not need to budget and disburse large amounts of capital from its own revenues (taxes) or through borrowing. This is especially pertinent in Vietnam which faces a large demand for new national and regional infrastructure but is constrained by how much capital can be raised. 

Accessing private sector finance through PPPs is key in driving national sustainable and economic and social development. 

According to Mr. Tran Duy Hung, CEO of Monitor Consulting, “We need creative solutions to leverage the benefits from each partner in PPPs.  The private sector brings substantial capital and innovation and enables the implementation of SDGs while reducing the costs to the State.  PPPs must be well-designed and implemented in a balanced regulatory environment, and have the potential to bring greater efficiency and sustainability in developing national infrastructure, while providing quality and affordable public services.”

Promoting PPPs in sustainable development

Vietnam has tremendous potential for PPPs in key infrastructure projects spanning a variety of sectors including energy, transportation, education, and healthcare.  PPPs can greatly aid Vietnam in developing its economy and improve its competitiveness.

The PPP legal framework has been enhanced with the passage of the PPP Law in 2020.  Mr. Nguyen Quang Vinh, Vice Chairman of VCCI, emphasized that “[the passage of the PPP Law] is a great advancement and commitment from the Government to develop an enabling investment environment, and to attract more resources—capital, innovation, and otherwise—from the private sector, including foreign investors, to achieve the sustainable development goals.”

VCCI, as a focal point of the PPP Committee under the National Council for Sustainable Development and Competitiveness Improvement, is actively campaigning to promote PPP investments.

VCCI has prepared and submitted papers that offer recommendations addressing PPP regulatory challenges and mechanisms on how to strengthen the regulatory framework in line with international best practices.  These recommendations are centered on a key principle: ensuring a fair and balanced risk allocation mechanism and benefit-sharing mechanism between investors and the Government to develop national infrastructure in a sustainable way.

VCCI is also investing time and resources in building an interactive platform to help connect public and private sector entities.  Within the cooperation framework between VCCI and the U.S. Agency for International Development (USAID), both parties have worked together to promote PPPs in Vietnam.  USAID assistance will help introduce international PPP standards and best practices to Vietnam and elevate the voice of the private sector in sustainable infrastructure development.

VCCI and USAID are now cooperating to launch a PPP website to provide up-to-date information, share international experiences, and address PPP-related questions.  The PPP website is a much-needed tool to improve PPP capacity and knowledge for stakeholders in Vietnam, both public and private enterprises, and features online PPP training, a PPP helpdesk,

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