Success Factors for Public-Private Partnership Infrastructure Projects in Vietnam

Infrastructure projects require a great amount of capital investment resulting from their tremendous size, complexity, and risk. Due to the limitation of public finances, the private sector is invited to participate in infrastructure project development. The private sector can entirely or partially invest in an infrastructure project in the form of public-private partnership (PPP) scheme, which has been an attractive option for several developing countries, including Vietnam. Unfortunately, despite the PPP scheme will improve project efficiencies and attract capital investments of private investors, the success of PPP implementation is not guaranteed. This paper investigates the critical success factors (CSFs) of PPP infrastructure projects in Vietnam. Relevant data were collected through in-depth interviews with six PPP experts and questionnaire surveys with 150 interviewees, and then analyzed by the word cloud technique and the one-way analysis of variance (ANOVA) test. The CSFs were ranked based on the viewpoints of the public sector, the private sector, and the PPP consultants. The outcomes show that there was no significant difference in the perceptions of all three parties concerning the success factors for PPP infrastructure projects in Vietnam. The top five critical success factors are (1) timely land acquisition and appropriate compensation, (2) financial capacity of the private sector, (3) effective project management, (4) favorable and complete legal framework and regulations, and (5) financial feasibility and attraction. Recognizing the CSFs is indispensable to ensure the success of PPP infrastructure project implementation

A Comparative Study on the Risk Perceptions of the Public and Private Sectors in Public-Private Partnership (PPP) Transportation Projects in Vietnam

Large transportation projects such as highways are expensive, complex, and dynamic in nature. Acquiring large investment capitals for these projects is always a major challenge for every nation. To solve this problem, Vietnamese government has called for the participation of private entities in the form of public-private partnership (PPP). Attracting private investors is a vital and challenging step for implementing PPP transportation projects in Vietnam. This paper examines the similarities and differences of risk perceptions of the public and private sectors for the investment of PPP transportation projects in Vietnam. Questionnaire surveys are used to collect data for assessing the likelihoods of occurrence and impacts of risk factors from 123 experienced professionals from both public and private entities. We found that the two most critical risk factors (CRFs) are land acquisition and compensation, and delay in project approvals and permits. The results from an independent sample t-test indicate the different risk perceptions of the public and private sectors for eight CRFs: (1) corruption, (2) change of project scope, (3) lack of transparency in bidding, (4) inflation, (5) payment issues, (6) inadequate feasibility study, (7) inappropriate allocation of responsibility and risk, and (8) fluctuation of interest rate. These eight CRFs are categorized into three major groups: the tendering process, commercial problems, and payment issues. These results can be used for establishing appropriate public policies to promote private investments in PPP transportation projects. Meanwhile, private investors would also have a better understanding of PPP transportation project development in Vietnam.Large transportation projects such as highways are expensive, complex, and dynamic in nature. Acquiring large investment capitals for these projects is always a major challenge for every nation. To solve this problem, Vietnamese government has called for the participation of private entities in the form of public-private partnership (PPP). Attracting private investors is a vital and challenging step for implementing PPP transportation projects in Vietnam. This paper examines the similarities and differences of risk perceptions of the public and private sectors for the investment of PPP transportation projects in Vietnam. Questionnaire surveys are used to collect data for assessing the likelihoods of occurrence and impacts of risk factors from 123 experienced professionals from both public and private entities. We found that the two most critical risk factors (CRFs) are land acquisition and compensation, and delay in project approvals and permits. The results from an independent sample t-test indicate the different risk perceptions of the public and private sectors for eight CRFs: (1) corruption, (2) change of project scope, (3) lack of transparency in bidding, (4) inflation, (5) payment issues, (6) inadequate feasibility study, (7) inappropriate allocation of responsibility and risk, and (8) fluctuation of interest rate. These eight CRFs are categorized into three major groups: the tendering process, commercial problems, and payment issues. These results can be used for establishing appropriate public policies to promote private investments in PPP transportation projects. Meanwhile, private investors would also have a better understanding of PPP transportation project development in Vietnam

Success Factors for Public-Private Partnership Infrastructure Projects in Vietnam

Infrastructure projects require a great amount of capital investment resulting from their tremendous size, complexity, and risk. Due to the limitation of public finances, the private sector is invited to participate in infrastructure project development. The private sector can entirely or partially invest in an infrastructure project in the form of a public-private partnership (PPP) scheme, which has been an attractive option for several developing countries, including Vietnam. Unfortunately, despite the PPP scheme will improve project efficiencies and attract capital investments of private investors, the success of PPP implementation is not guaranteed. This paper investigates the critical success factors (CSFs) of PPP infrastructure projects in Vietnam. Relevant data were collected through in-depth interviews with six PPP experts and questionnaire surveys with 150 interviewees and then analyzed by the word cloud technique and the one-way analysis of variance (ANOVA) test. The CSFs were ranked based on the viewpoints of the public sector, the private sector, and the PPP consultants. The outcomes show that there was no significant difference in the perceptions of all three parties concerning the success factors for PPP infrastructure projects in Vietnam. The top five critical success factors are (1) timely land acquisition and appropriate compensation, (2) financial capacity of the private sector, (3) effective project management, (4) favorable and complete legal framework and regulations, and (5) financial feasibility and attraction. Recognizing the CSFs is indispensable to ensure the success of PPP infrastructure project implementation

Impacts of risk factors on the performance of public-private partnership transportation projects in vietnam

The rapidly increasing demand and the inefficacy of financing transportation infrastructure project investments have contributed to various challenges for Vietnam in recent decades. Since the country’s budget is inadequate for investing in all necessary infrastructure projects, the Vietnam government has been inviting other economic sectors, especially the private sector, to participate in infrastructure development. The cooperation between the government agencies and the private entities, called Public-Private Partnership (PPP), must encounter various challenges leading to difficulties in attracting private investors. A main reason is that private investors must deal with critical risks concerning PPP investment environment. It is a challenging task for the government to optimally manage such risks to enhance the attractiveness of PPP projects for private investors. This paper examines the critical risk factors that influence the private sector’s investment decisions on PPP transportation projects in Vietnam. Risk factors inherent in typical PPP projects were compiled by comprehensive literature review. To reflect unique characteristics of PPP projects in Vietnam, the compiled risk factors were reviewed by a group of PPP experts from both the public and private sectors in Vietnam through in-depth interviews and questionnaire surveys. In addition, ten PPP project case studies in Vietnam were analyzed to derive the risk profile of PPP transportation projects of the nation. These risk factors were quantitatively assessed based on their probabilities and impact levels. We found that the critical risk factors of PPP infrastructure projects in Vietnam are acquisition/compensation problems, approvals and permits, inadequate feasibility studies, finance market issues, subjective evaluation methods, and change in laws and regulations. By performing factor analysis, these critical risk factors were grouped into four categories: (1) bidding process, (2) finance issues, (3) laws and regulations, and (4) project evaluation issues. These critical risk factors represent the obstacles that repel private investors from PPP transportation projects in Vietnam. Thus, the Vietnam government agencies should meticulously address these issues to attract both domestic and foreign private investors in PPP projects

Different Perceptions of Concern Factors for Strategic Investment of The Private Sector in Public-Private Partnership Transportation Projects

This paper identifies the concern factors of private investors associated with Public-Private Partnership (PPP) transportation projects in Vietnam. The concern factors are incorporated into four main groups: (1) company profile; (2) finance; (3) opportunities; and (4) risk perceptions. The paper examines the different perceptions by the public and private sectors about these concern factors adopted by experienced professionals related to PPP transportation projects. Based on a questionnaire survey in Vietnam, the most concern factors of private investors are their own capacity, demand issues, legal and political risks, long-term income, and financial sources issues of the PPP project. Moreover, five factors that represent the significant differences between the private and public sectors includingpolitical risks, enhancement of company’s strength in its industry, construction risks, demand issues, and financial viability of the company are also discovered. Addressing the different perceptions is indispensable to ensure the public sector can establish necessary policies that appeal to both domestic and foreign private investors. The paper at the same time hopes to provide some of lessons for the private sector

Different Perceptions of Concern Factors for Strategic Investment of The Private Sector in Public-Private Partnership Transportation Projects

This paper identifies the concern factors of private investors associated with Public-Private Partnership (PPP) transportation projects in Vietnam. The concern factors are incorporated into four main groups: (1) company profile; (2) finance; (3) opportunities; and (4) risk perceptions. The paper examines the different perceptions by the public and private sectors about these concern factors adopted by experienced professionals related to PPP transportation projects. Based on a questionnaire survey in Vietnam, the most concern factors of private investors are their own capacity, demand issues, legal and political risks, long-term income, and financial sources issues of the PPP project. Moreover, five factors that represent the significant differences between the private and public sectors includingpolitical risks, enhancement of company’s strength in its industry, construction risks, demand issues, and financial viability of the company are also discovered. Addressing the different perceptions is indispensable to ensure the public sector can establish necessary policies that appeal to both domestic and foreign private investors. The paper at the same time hopes to provide some of lessons for the private sector