PPP Policies and Potential PPP projects in waste treatment and water supply in Vietnam

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1 SOCIALIST REPUBLIC OF VIETNAM MINISTRY OF PLANNING AND INVESTMENT Public Procurement Agency Ministry of Planning and Investment of 4 th ASEAN Connectivity Forum PPP Policies and Potential PPP projects in waste treatment and water supply in Vietnam Ms. Nguyen Thi Thu Ha Deputy Head of PPP Office, Public Procurement Agency, MPI Korea, November 7, 2016

2 PRESENTATION OUTLINE 1. Overview of PPP Policies in Viet Nam 2. Investment Opportunities 2

3 Khung pháp lý hiện hành về PPP Current legal framework on PPP LAWS Construction law Investment law Public Investment law Public procurement law DECREES Decree 15/2015/ND- CP dated 14/2/2015 on PPP (replace Decree 108 and Decision 71) Decree 30/2015/ND- CP dated 17/3/2015 on PPP investor selection CIRCULARS Circular 06/2016/ TT- BKHĐT Circular 02/2016/T T-BKHĐT Circular 55/2015/ TT-BTC Circular 23/2015/ TT-BCT Circular 38/2015/ TT-BCT Circular 86/2015/ TT- BGTVT Decision 23/2015/Q Đ-TTg and TT 183/2015/T T-BTC Circular 15/2016/ND- CP on RFQ, RFP for PPP projects 3

4 Sector coverage.. Other sectors - Transportation - Urban infrastructure facilities - Power - Infrastructure facilities for society - Infrastructure facilities for commercial purposes - Agriculture - Other sectors

5 Contract structures BOT, BTO, BOO BTL, BLT, O&M SPV SPV Payment Users Government Users Government

6 PPP Project Preparation 2.1 Dự án do Bộ, ngành, UBND cấp tỉnh lập Đề xuất dự án Solicited Projects Project pre-selection Formulation of project proposal by ASAs Appraisal and approval of project proposal by ASA Unsolicited Project Formulation of project proposal by investors Appraisal and approval of project proposal by ASA Agreement to assign the investor to formulate FS report Publication of project proposal Formulation of FS report by ASA Appraisal and approval of FS report by ASA Investor selection Contract signing and implementation Publication of project proposal Formulation of FS report by investor Appraisal and approval of FS report by ASA Investor selection (the Proponent investor will be given incentives during investor selection Contract signing and implementation

7 Financial support of the State for PPP projects State investment capital for PPP project implementation PPP Decree CAPEX subsidy Investment capital for constructing Project Facilities 1. Investment capital for constructing Project Facilities applied for contract types where the investment capital recovery and profits are generated from user fees but these proceeds are not enough to cover costs. (VGF) Investment need Investor capital for CAPEX Construction period OPEX Operation period Payment for BTL, BLT 2. Payment for the availability of services provided by Investor under BTL, BLT contract. 3. Support in construction of auxiliary constructions, organization of compensation, land clearance and resettlement. Investor capital for CAPEX Construction period OPEX Operation period Annual payment

8 Financial support of the State for PPP projects Potential PPP projects PDF PDF: Project Development Fund (26,6 million USD funded by ADB and AFD) for preparation of project proposal, feasibility study for PPP projects VGF: Viablity Gap Fund: State investment support for construction of project facilities.

9 Incentives and Guarantee for PPP Investors Incentives for proponent investors Service price State capital contribution Social and State benefit Combine d method 5% of the service price to the investors not entitled to incentives 5% of the proposed State capital contribution to the investors not entitled to incentives 5% of the amount contributed to the State budget to project proponent incentives in proportion to the combined method, however the total value not exceed 5%. 9

10 Incentives and Guarantee for PPP Investors Incentives on corporate income tax imposed on investor, project enterprise Tax incentives Incentives on import and export duties imposed on goods imported to implement a project Incentives exemption from or reduction of land rent or land use fees for the area of land allocated by the State Tax incentives for foreign and domestic contractors participating in implementation of a project Other incentives 10

11 Incentives and Guarantee for PPP Investors Land use purpose remains unchanged during project implementation Guarantee on the step-in-rights of lenders The right of investor to mortgage project assets Other support Guarantee on foreign currency conversion 11

12 Potential PPP Projects in urban water supply and waste water treatment Demand for water supply and waste water treatment (million m3) in 2020 Water supply for urban domestic use Waste water treatment for urban zone Demand Urban population until 2020: 40 million people Capital need: + 3,3 million USD for water supply + 6,9 billion USD for waste water treatment 12

13 Potential PPP Projects in waste water treatment and water supply sector 383 projects proposed by ASAs 10 National prioritized Projects 5 prioritized projects of Ministries, branches and local authorities 68 national prioritized projects and 39 prioritized projects of Ministries and local authorities PDF VGF Project sectors (national prioritized projects) 4 41 Transport Agriculture IT Environment Water supply Waste water treatment 13

14 Potential PPP Projects in in waste waste water treatment and and water supply sector National Prioritized Projects: No. Name of project Authorized State Agency 1 Waste water treatment for Hoa Khanh Industrial Zone Da Nang People s Type of contract Total capital BOT Water supply project for 10 communes in Y Yen District, Nam Dinh Province 3 Building collection system and waste water treatment for De Tham District, Cao Bang City 4 Dredging and upgrading Dam Cut Reservoir, Gia Vien District, Ninh Binh Province 5 Duc Bac Water supply project (Lo River) Nam Dinh People s Cao Bang People s Ninh Binh People s Vinh Phuc People s BOT BT BT BOT

15 Potential PPP Projects in waste water treatment and water supply sector National Prioritized Projects: No. Name of project Authorized State Agency 6 Water supply project for domestic and industrial use 7 Water supply system for industrial and technological complex in Ham Tam District, Binh Thuan Province 8 Water supply system with capacity of m3/day for Vung Ang Economic Zone 9 Waste water treatment project in Quang Ngai 10 Waste water treatment project in Bac Lieu Binh Dinh People s Binh Thuan People s Ha Tinh People s Quang Ngai People s Bac Lieu People s Type of contract Total capital BOT BOT BOT BOT

16 Potential PPP Projects in waste water treatment and water supply sector Prioritized Projects of Ministries and local authorities: No. Name of project Authorized State Agency 1 Water supply project for domestic use in Ta Lung, Pa Vi Communes and adjacent areas in Meo Vac District, Ha Giang Province 2 Water supply project for Lao Cai Province 3 Water supply plant for Nghia Dan District 4 Waste water treatment for Tam Thang Industrial Zone Ha Giang People s Lao Cai People s Nghe An People s Quang Nam People s Type of contract Total capital , BOT BOT Nhung River water supply project Quang Tri BOT

17 Potential PPP Projects 2.5. Communication, transparent information - Database on potential PPP projects will be released on PPP website

18 Contact PPP Office (Ministry of Planning and Investment) Tel: Fax: Website: