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Vietnamese IT firms still hesitant to pour money into PPP projects

VietNamNet Bridge – Vietnamese enterprises do not lack money or technologies
to implement PPP (private public partnership) projects. What they lack is the
feeling of safety when they implement the projects.

Vietnam, telecom, PPP, development, encouragement

According to Nguyen Thanh Phuc, Head of the Information Technology Application
Agency under the Ministry of Information and Communication, under the national
program on applying IT at state agencies in the 2011-2015 period, 56 projects in
information infrastructure need to be implemented.

However, the implementation of the projects has been going very slowly due to
the lack of capital. The state budget can only satisfy 10 percent of the capital
needed.

Also according to Phuc, four projects have been completed, 11 are under the
investment, while nine approved projects have not been kicked off. The other 26
projects are under the preparatory steps for investment, while six projects may
be invested under the modes different from the initially planned ones.

PPP has been cited as the most effective solution to the problem of lacking
capital. Especially, the mechanism has a very important significance nowadays,
when the State tightens the public investments in an effort to control the
inflation.

Ho Chi Dung, a senior executive of Viettel, said Vietnam should consider the
model of Singapore. With the PPP model, the country can save 15 percent of total
expenses, reduce the implementation duration by 15 percent, reduce 30 percent of
expenses for design, and 15 percent of the expenses on construction and
operation.

However, no considerable step has been made since the day the state officials
and IT firms agreed that PPP is the most suitable mechanism for IT project
implementation.

Most recently, the story about PPP was discussed once more at a meeting on IT
infrastructure development where Deputy Prime Minister Hoang Trung Hai
participated in.

Dung from Viettel once more repeated that there has been no concrete guidance
about the implementation of PPP projects in information technology and
communication. Therefore, despite the great advantages, PPP still has not been
applied in a large scale in Vietnam.

In response to IT firms, state officials simply say “the legal documents are
being compiled and the legal framework on the issue is being built up.”

In November 2010, the Prime Minister released the Decision No. 71 on the
implementation of investment projects under the PPP mode in a pilot program.
However, the list of the fields which can apply PPP mechanism stipulated in the
decision did not include information technology and communication.

To date, only one IT project has been untaken under the mode of PPP, which has
shown initial achievements. This is the project on utilizing e-commerce in the
government’s procurement (the electronic bidding system).

Meanwhile, experts and the IT community both have voiced the same complaint that
there are too many procedures and formalities to follow, which have put big
difficulties for enterprises.

Analysts believe that IT firms need to be reassured about their benefits when
joining PPP projects, or they would stay outside PPP projects. It is the
Ministry of Information and Technology which must take the responsibility for
building up a legal framework on the issue.

Tran Tuong Lan, a senior official of the Ministry of Planning and Investment has
suggested that the Ministry of Information and Communication need to make a
report on the current situation and the readiness of IT enterprises for PPP
projects right in 2013, form up research teams to support the preparation and
the implementation of PPP projects in IT field.

Buu Dien

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