Vietnam Holds 4th PPP Workshop to Attract Investors

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Sept. 24 – On September 19th, the Vietnamese Ministry of Transport and the World Bank held a workshop in order to attract foreign investors to the Dau Giay–Phan Thiet highway project. This is Vietnam’s first ever public private partnership (PPP) project.

The 100 km, four-lane highway will be in the Southeastern region of the country and require an investment of US$757 million. Importantly, the highway will also connect the economic centers of Ho Chi Minh City (HCMC) and Phan Thiet.

The event attracted investors from around the world. Mark Moseley, head of the working group for the World Bank, described the meeting as “a unique opportunity for investors.”

The Dau Giay–Phan Thiet project already has one investor, Bitexco group, providing 60 percent of the capital. The Vietnamese government is now looking for an investor, either an individual or a group of up to three companies, to provide the remaining 40 percent of the funds. The bid winner will be the one who is able to submit the lowest grant proposal for the Viability Gap Fund (VGF) of the World Bank.

The investor(s) that submit the winning bid for the project will receive a number of incentives from the World Bank and the government of Vietnam. These include: a non-refundable grant from the World Bank’s VGF and a loan from its International Bank for Reconstruction and Development (IBRD) fund (at a much lower rate than a commercial loan), and Vietnam will make a legal framework for the project and will be fully responsible for the site clearance, providing US$107 million in funding for said clearance.

Once the highway project is finished, the investors will have 30 years within which to earn money through the use of tolls. After the time period is up, ownership of the road will revert to the Vietnamese Ministry of Transport.

In addition to investment interest in its PPP project, Vietnam saw more positive news in the month of September. The country’s capital, Hanoi, saw a 7.88 percent increase in its GDP over the first nine months of 2013. However, the city’s consumer price index (CPI) only rose 0.57 percent due to an increase in the price of education.

Likewise, HCMC saw a 8.7 percent rise in its GDP over the last nine months. The city also saw an increase in its CPI of 3.13 percent over the last month.

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