Industry Trend Analysis - PPP Appeal Marred By Lack Of Transparency - FEB 2017

BMI View: A lack of transparency in the planning, tendering and monitoring processes will limit the Vietnam's appeal to investors and prevent the market from fully harnessing its PPP pipeline to fill financing gaps in its infrastructure development plans and import technical expertise .

The appeal of public-private partnerships (PPPs) in Vietnam will be limited by a continuing lack of transparency in the planning, tendering and monitoring processes, despite otherwise promising progress on the surrounding regulatory framework. Currently, there is limited and difficult-to-find information on upcoming PPP projects and the status of existing ones - a situation that compares poorly when compared to programmes in Indonesia, the Philippines, India and China. Vietnam has a sizable infrastructure deficit and will require significant levels of investment in the coming years to improve its logistics and operating environment.

With the government unlikely to be able to fully fund the USD16bn per year in infrastructure investment needed as estimated by the World Bank - our current forecast for Vietnam's entire construction industry value in 2017 is USD11.1bn - PPPs will be essential for raising financing from the private sector and bringing in technology and expertise for higher-value projects in power and transport. Improving the transparency of Vietnam's PPP programme will help reduce investors' risk perceptions and boost growth in the country's construction industry.

Private Investment Would Unlock Greater Growth
Vietnam - Construction Industry Value Real Growth
e/f=BMI estimate/forecast. Source: Vietnam General Statistics Office

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