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  Business

Private enterprises encouraged to get involved in infrastructure construction

A working group of representatives from the business community and governmental agencies will be established to discuss ways to attract enterprises, especially private ones, to get involved in infrastructure construction.

The agreement was reached between representatives of the Vietnamese Government and the foreign and domestic business communities at the Vietnam Business Forum, which opened in Hanoi on Monday.

Deputy Prime Minister Vu Khoan said that the working group will assess demand for infrastructural development planning and give advice to help finalise a legal framework in this field, and arrange fields using the State budget, Official Development Assistance (ODA) and private investment capital.

The Deputy PM agreed with the World Bank (WB) and International Finance Corporation (IFC)'s experts about the necessity to finalise the legal framework right now to attract private investment capital in this field on the basis that ODA resources for Vietnam may reduce in the next 5-10 years as Vietnam won't be enjoying preferential treatment. Khoan also admitted that the private sector's capital has not yet been utilised in infrastructure construction while the State budget and ODA capital are being well disbursed.

Investment and Planning Minister Vo Hong Phuc pointed out that at present the electricity industry is a sector that has gained initial effectiveness in using the private capital source. The Vietnamese Government is calling on the private sector to invest in developing water supply, drainage and traffic systems, the minister added.

According to a report presented by the Vietnam Business Forum's Distribution and Production Group, Vietnam's infrastructural development has gained remarkable achievements. In the 1997-2002 period, the Vietnamese Government spent around 44 percent of State investment capital on this field. The investment level for infrastructural development accounted for more than 10 percent of the country's GDP in 2003, higher than other Southeast Asian nations.

The Phu My Power Plants No. 2 and 3 were quoted as an effective private investment model. However, the biggest hindrance to the field is finalising the legal framework.

On the sidelines of the forum, Deputy PM Khoan said foreign businesses and the Vietnamese Government share the same concerns. Efforts in renewing and finalising the legislative system for the investment environment have achieved positive results, especially the Competitiveness Law, the Civil Law and the Resolution 164 related to enterprises in industrial and export processing zones and changed individuals' income taxes. Such work will be promoted including the issuance of the Common Investment Law and the Integrated Business Law.

ND - (01/12/2004)


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