The Law No. 57/2024/QH15, amending and supplementing several articles of the Law on Investment in the Public-Private Partnership (PPP) model, marks a significant step forward in improving the legal framework, addressing challenges in PPP projects, and boosting investment attraction. These changes not only resolve existing barriers but also create substantial opportunities for future PPP projects while promoting efficient infrastructure development.
One notable aspect is the removal of restrictions on investment sectors and minimum capital requirements. Previously, the PPP Law was limited to five key sectors, including transportation, electricity grids, water supply, healthcare, and education, with a minimum capital requirement ranging from 100 to 200 billion VND. The new regulation expands the scope of PPP application to all sectors and eliminates the minimum capital requirement. This change facilitates localities in implementing essential infrastructure projects, particularly smaller-scale projects in economically disadvantaged areas, thereby attracting more investors and improving the efficient use of capital.
Another critical amendment is the increase in the proportion of state capital contribution to PPP projects, up to 70% of the total investment for projects with high land clearance costs or those implemented in economically disadvantaged regions. Compared to the previous limit of 50%, this new ratio alleviates financial burdens on private investors and ensures the timely implementation of critical infrastructure projects, improving public services and fostering economic growth.
The law also introduces significant reforms to investment procedures by simplifying the appraisal and approval process and delegating more authority to localities. These measures reduce approval times while enhancing transparency and openness throughout the process, helping to curb corruption and waste. Investors benefit from a clearer and more streamlined procedure, creating a more attractive investment environment.
Additionally, Law No. 57/2024/QH15 reinstates Build-Transfer (BT) contracts with significant improvements. This model allows investors to propose infrastructure projects without relying on state budget funds while implementing stricter management regulations to ensure transparency and efficiency. Selection criteria for investors are clearly defined and publicly disclosed during the project development stage, minimizing long-term debt issues and enhancing contract performance.
For transitional projects, the new law allows the revised provisions to apply to contracts signed before its effective date, facilitating smoother project continuation. The government also pilots PPP applications in sectors not previously regulated in Hanoi, Ho Chi Minh City, and Da Nang, opening significant opportunities to attract private capital and flexibly develop infrastructure.
The reforms introduced by Law No. 57/2024/QH15 not only address legal barriers but also establish a clear, transparent, and effective legal framework for future public infrastructure projects. If effectively implemented, these changes will enhance infrastructure quality, improve national competitiveness, attract investment, and serve as a robust driver for sustainable economic growth.
Source: Investment news