EVALUATION OF DECISION-MAKING POLICY ON PUBLIC - PRIVATE PARTNERSHIP TRANSPORT PROJECTS IN VIETNAM

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MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
EVALUATION OF DECISION-MAKING POLICY
ON PUBLIC - PRIVATE PARTNERSHIP
TRANSPORT PROJECTS IN VIETNAM
Specialization: International Trade Policy and Law
NGUYEN THI MINH HIEU
Hanoi - 2023

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
EVALUATION OF DECISION-MAKING POLICY
ON PUBLIC - PRIVATE PARTNERSHIP
TRANSPORT PROJECTS IN VIETNAM
Major: International Economics
Specialization: International Trade Policy and Law
Code: 8310106
Full name: Nguyen Thi Minh Hieu
Supervisor: Dr. Ly Hoang Phu
Hanoi - 2023

i
DECLARATION
I hereby state that the work is that of the author solely except where due
acknowledgement has been made. The contents and results of this Thesis are
completely honest. The information, data and documents which are collected from
various sources for analysis and evaluation have been fully cited in the main content
and in the references list of this master thesis as well.
I make this statement in full knowledge of and understanding that, should it be
found to be false, I will not receive a grade and may face disciplinary proceedings.
Nguyen Thi Minh Hieu
July 2023

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ACKNOWLEDGEMENTS
The Master program in International Trade Policy and Law at the Foreign
Trade University presents a remarkable opportunity for me to fulfill my aspirations
to find effective tools for policy creation and evaluation.
I would like to express my deepest gratitude to Foreign Trade University,
Faculty of Graduate Studies, teachers, and other specialists, who always supports
during my study with their knowledge, encouragement and sharing.
My sincerest gratitude goes to my supervisor, Dr. Ly Hoang Phu, for his
intellectual advice and guidance over my thesis. His knowledgeable advice is a
compass for my journey throughout my dissertation.
This endeavor would not have been possible without inspiration, enthusiasm, and
dedication from the lecturers of Assoc. Prof. Hoang Xuan Binh, Assoc. Prof. Nguyen
Thi Tuong Anh, Dr. Luong Thi Ngoc Oanh. I have been enlightened with new
horizons from knowledge from each session, which I have applied in this thesis.

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TABLE OF CONTENT
DECLARATION....................................................................................................... i
ACKNOWLEDGEMENTS..................................................................................... ii
TABLE OF CONTENT.......................................................................................... iii
LIST OF EQUATIONS .......................................................................................... vi
LIST OF FIGURES ............................................................................................... vii
LIST OF TABLES ................................................................................................ viii
LIST OF ABBREVIATIONS................................................................................. ix
ABSTRACT...............................................................................................................x
INTRODUCTION.....................................................................................................1
1. Rationales for the research ..............................................................................1
2. Objective and scope of the study .....................................................................2
3. Research question .............................................................................................3
4. Methodology......................................................................................................3
5. Literature review ..............................................................................................4
6. Thesis structure.................................................................................................7
CHAPTER 1. Theoretical framework OF EVALUATION OF DECISION-
MAKING POLICY ON PPP TRANSPORT PROJECT......................................8
1.1. Overview of Evaluation of Decision-making policy on PPP transport
project ....................................................................................................................8
1.1.1. Key definitions and History of Evaluation of Decision-making policy
on PPP transport project...................................................................................8
1.1.2. Process of Evaluation of Decision-making policy on PPP transport
project...............................................................................................................11
1.1.3. Stakeholders of Evaluation of Decision-making policy on PPP
transport project...............................................................................................14
1.2. Criteria to Evaluate Decision-making policy on PPP transport project 16
1.2.1. Effectiveness criteria .............................................................................17
1.2.2. Efficiency criteria ..................................................................................19

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1.3. Case studies of evaluating decision-making policy on PPP transport
project in some countries ...................................................................................24
1.3.1. Evaluate policy on decision-making in Koudougou Bus Station in
Burkina Faso ...................................................................................................24
1.3.2. Evaluate policy on decision-making in Delhi-Gurgaon Toll Road
Project in India ................................................................................................25
CHAPTER 2. ANALYSIS OF DECISION-MAKING POLICY ON PPP
TRANSPORT PROJECT IN VIETNAM.............................................................27
project in Vietnam ..............................................................................................27
2.1.1. Key Definitions and History of Evaluation of Decision-making policy
on PPP transport project in Vietnam..............................................................27
2.1.2. Process of Evaluation of Decision-making policy on PPP transport
projects in Vietnam..........................................................................................31
2.1.3. Stakeholder of Evaluation of Decision-making policy on PPP
transport project in Vietnam ...........................................................................33
2.2. Apply Evaluation Criteria to Decision-making Policy on PPP transport
project in Vietnam ..............................................................................................36
2.2.1. Effectiveness criteria .............................................................................36
2.2.2. Efficiency criteria ..................................................................................43
2.3. Some case studies of Decision-making policy on PPP transport project in
Vietnam................................................................................................................50
2.3.1. Evaluate policy on decision-making in Binh Loi PPP project............50
2.3.2. Evaluate policy on decision-making North-South expressway PPP
project...............................................................................................................52
2.3.3. Evaluate policy on decision-making Thai Nguyen - Cho Moi PPP
project...............................................................................................................52
2.4. Assessment of Decision-making policy on PPP transport project in
Vietnam................................................................................................................54

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2.4.1. Strengths of Decision-making policy on PPP transport project in
Vietnam ............................................................................................................54
2.4.2. Weaknesses of Decision-making policy on PPP transport project in
Vietnam ............................................................................................................57
CHAPTER 3. RECOMMENDATIONS FOR DECISION-MAKING POLICY
ON PPP TRANSPORT PROJECT IN VIETNAM .............................................60
3.1. Document relating to orientation of Decision-making policy on PPP
transport project in Vietnam.............................................................................60
3.2. Recommendations to Policymakers ...........................................................61
3.3. Solutions to other Stakeholders in Decision-making policy on PPP
transport project.................................................................................................65
3.3.1. Recommendations to Decision-making Authority ...............................65
3.3.2. Recommendations to Competent Authority..........................................66
3.3.3. Recommendations to Project Assessment Board .................................71
3.3.4. Recommendations to Preparing Unit ...................................................73
CONCLUSION........................................................................................................76
LIST OF REFERENCES .......................................................................................77
LIST OF LEGAL DOCUMENTS.........................................................................84
Appendix 1. an example of legal basis of a PPP project......................................85
Appendix 2. an example of a BOT project financial analysis.............................87

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LIST OF EQUATIONS
Equation 1.1. NPV by Discounted Cash Flow method.............................................21
Equation 1.2. NPV by Adjusted Present Value method ...........................................22
Equation 1.3. IRR by algebraic method....................................................................23
Equation 1.4. BCR by Traditional method ...............................................................23
Equation 1.5. BCR by Present value method............................................................24
Equation 2.1. Economic NPV as regulated by Vietnam law ....................................47
Equation 2.2. Economic IRR as regulated by Vietnam law .....................................48
Equation 2.3. BCR as regulated by Vietnam law .....................................................48
Equation 2.4. Return on Equity as regulated by Vietnam law..................................49
Equation 2.5. Discount rate as regulated by Vietnam law........................................50

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LIST OF FIGURES
Figure 1.1. Criteria to evaluate policy on decision-making PPP transport project..16
Figure 2.1. Process of PPP project in Vietnam.........................................................31
Figure 2.2. Process of decision-making PPP transport project in Vietnam..............32

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LIST OF TABLES
Table 2.1. Current legal framework on PPP transport project decision-making in
Vietnam.....................................................................................................................37
Table 2.2. Bases for PPP transport project decision-making in Vietnam.................39
Table 2.3. Benefits for users of North - South expressways compared to national
highway.....................................................................................................................46
Table 3.1. Advantages and disadvantages of DCF and APV method in NPV
calculation .................................................................................................................68
Table 3.2. Advantages and disadvantages of Trial and Error or Iterative and
Algebraic Approach method in IRR calculation.......................................................69
Table 3.3. Advantages and disadvantages of Traditional and Present Value method
in BCR calculation ....................................................................................................70

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LIST OF ABBREVIATIONS
Abbreviation Meaning
APV Adjusted Present Value
BCR Benefit - Cost Ratio
BOT Build - Operate - Transfer
DCF Discounted Cash Flow
IRR Internal Rate of Return
NPV Net Present Value
PPP Public - Private Partnership
SPV Special Purpose Vehicle
VOC Value of Cost
VOT Value of Time

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ABSTRACT
Public-private partnerships have emerged as a popular approach to
infrastructure development in Vietnam, with the government partnering with private
entities to finance and operate transport projects. However, the success of these
partnerships greatly depends on the decision-making policy implemented by the
government. Therefore, evaluating the effectiveness of this policy is crucial to
ensure the efficient and sustainable development of transportation infrastructure in
Vietnam.
This study aims to evaluate the decision-making policy on PPP transport
projects in Vietnam by effective and efficiency criteria. The findings reveal that,
Vietnam's policy for decision-making on PPP transport project is not fully effective
and efficient.
The findings of this evaluation will provide valuable insights for
policymakers, government agencies, and private sector entities involved in PPP
transport projects in Vietnam. By identifying gaps and areas for improvement in the
decision-making policy, this study aims to contribute to the development of more
effective and efficient PPP projects, ultimately improving the transportation
infrastructure and services in Vietnam.

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INTRODUCTION
1. Rationales for the research
Vietnam's rapid economic growth in recent decades has led to an increase in
the demand for improvements to the country's infrastructure, especially in the
transportation sector. Among these, the government has begun exploring Public-
Private Partnership (PPP) models to attract private investment and expertise in the
development, operation, and maintenance of transportation infrastructure projects.
According to Ministry of Transport, from the first PPP legal document in 1997
to now, Vietnam has mobilized about 224 projects with a total investment of
approximately 674.080 trillion VND for the development of transportation
infrastructure through PPP methods (such as BOT, BT, BOO contracts). Of these,
the Ministry of Transport has mobilized 72 projects with a total investment of about
247.575 trillion VND for the construction of approximately 2,690 km of national
roads and highways, while localities have mobilized 152 projects with a total
investment of about 426.505 trillion VND. Regarding investment sectors, most
projects are carried out in the field of road transport, with 214 road projects with a
total investment of about 656.877 trillion VND (accounting for approximately
97%), while the remaining sectors have only 10 projects with a total investment of
17.203 trillion VND (accounting for nearly 3%). Vietnam Chamber of Commerce
and Industry (VCCI) shows that, PPPs have contributed significantly to Vietnam's
transport infrastructure development. The study found that between 1992 and 2014,
the total investment in transport infrastructure projects through PPPs accounts for
17% of total investment in this sector.
From the statistic above, it is obvious that PPP project plays a big role in the
socio-economic development of Vietnam. Among PPP investment sectors, the
transport sector has implemented the most PPP projects and accounted for a large
proportion in the mobilization of resources not only in this sector but also in
mobilizing private resources in national construction. Hence, evaluating the policy

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of PPP transport project decision-making is a vital tool for successfully making use
of this investment.
Evaluating the decision-making policy of PPP transport projects is crucial for
several reasons.
Firstly, it can provide insights into the PPP models and their potential for
improving infrastructure development, which is a driving force for socio-economic
development.
Secondly, it provide a framework for effective and efficient decision-making,
ensuring consistency across different projects within an organization, and different
projects within organizations.
Thirdly, PPP transport projects in Vietnam have faced numerous challenges
related to planning, development, and implementation. These challenges have
hindered the success of PPP projects and negatively impacted public welfare and
economic growth. Evaluating PPP transport projects can help identify the factors
affecting their success and failure, and subsequently inform policymaking to
improve the regulatory framework and implementation of PPP projects.
In summary, evaluation of decision-making policy on PPP transport project in
Vietnam is important because it can provide useful insights into the PPP models,
identify challenges, and inform policymaking to improve consitent regulatory
framework and implementation of PPP projects to achieve effectiveness, efficiency
of sustainable development goals.
2. Objective and scope of the study
Objective
The objective of the dissertation revolves around conducting a comprehensive
analysis and assessment of decision-making policy on PPP transport project.
Scope
Scope of time: the research focuses on the policy on decision-making for PPP
transport projects within the timeframe from 1997 to 2022.

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Scope of geography: the research focuses on the policy on decision-making for
PPP transport projects in Vietnam.
Research also introduces International experiences of Non-government
Organizations (such as the World Bank and the Asian Development Bank), and
foreign countris include Burkina Faso and India.
3. Research question
The research question is: What is policy on decision-making PPP transport
project and what recommendations for Vietnam to make policy both effectiveness,
and efficiency to achieve the desired outcomes?
4. Methodology
Research design and approach
The research design for this study is a mixed-methods approach. The study
will use both quantitative and qualitative research techniques to collect data on the
decision-making policy PPP transport project in Vietnam.
This approach is well-suited to the research question as it allows for a more
comprehensive analysis of the issue and provides the opportunity to triangulate data
from multiple sources. The study will use interviews and document analysis to
collect data on PPP project decision-making process. The data will be analyzed
using both qualitative and quantitative data analysis techniques.
Additionally, this thesis find criteria to evaluate policy on decision-making policy
on PPP transport project, introduce Vietnam decision-making policy on PPP transport
project, then analyze, compare, and give some recommendations for Vietnam.
Data collection methods
The data collection methods used for this study will be interviews and
document analysis. The interview will be conducted among PPP project decision-
makers in Vietnam to collect information about the main criteria and factors used in
selecting PPP projects. Document analysis will be used to examine international
experience, relevant policies, laws, and regulations governing PPP projects in

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Vietnam. These data collection methods will ensure a complete and balanced
representation of perspectives on PPP project decision-making in Vietnam.
Ethical considerations
The ethical considerations for this study will include obtaining informed
consent from all participants, protecting their confidentiality, and respecting their
rights to privacy. All data collected during the study will be kept confidential and
anonymous to ensure participants' privacy and protect their interests. Additionally,
the study will comply with all applicable laws, regulations, and ethical standards
governing research in Vietnam.
5. Literature review
Research from foreign authors
One of the most attractive topics to foreign authors relating to PPP project is
comparing decision-making policy between Western countries and China. Y Zhou
et al (Elsevier, 2019), Groenleer, Martijn, et al (Policy and Society, 2012), Cheng,
Zhe, et al (Springer, 2021) and other authors reviewed literature and legal
documents to examine the PPP practices in several Western developed countries
and compared them to China's practices. In general, the findings revealed that China
faces challenges in terms of lack of driving force, information, and participation
forms, then address these challenges by developing a conceptual framework with
practical models and strategies.
These literature reviews provide an overview of scholarly research on the
evaluation of decision-making policies in PPP transport projects. They emphasize the
significance of factors such as risk management, financial viability, stakeholder
involvement, and sustainability in the decision-making process. The insights and
methodologies proposed in these studies can assist policymakers and project managers
in formulating effective decision-making policies for PPP transport projects.
However, these literature reviews have certain limitations in terms of
objectivity, as they mainly focus on China rather than other Eastern countries.
Additionally, they may lack compatibility since some analyses do not adequately

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consider the factors related to political systems and infrastructure foundations of
Asian countries. It is important to recognize these limitations and ensure that future
studies incorporate a broader and more comprehensive analysis of Eastern countries
in order to gain a more holistic understanding of the subject matter.
Foreign scholars are also interested in risk identification and classification.
Various techniques can be used to identify risks, including comparisons to prior
projects or personal experience (McKim 2005; Yuan et al, 2008). Previous studies
utilized the Risk Breakdown Structure to illustrate the organization and
identification of risks in projects (Mehdizadeh et al, 2012). The Risk Breakdown
Structure can also be viewed as a tool for examining and categorizing risks into
groups, facilitating subsequent steps in the risk management process, namely risk
analysis and risk response. Generally, two predominant approaches exist for
classifying risks: based on their nature and the phase of the project life cycle in
which they may occur (Xenidis and Angelides, 2005).
The limitation of the previous study you mentioned is its narrow scope of
research. It primarily focused on the drafting contract phase and did not extensively
consider the potential risks associated with the decision-making phase. This limited
perspective may result in incomplete findings and recommendations regarding the
overall risk management process.
Research from Vietnam authors
There are two main sectors in Vietnam that have conducted a literature review
on this issue, which are official reports from state agencies, and studies from the
private sector.
From government entity, one notable study was conducted by Vietnam
Ministry of Transport (2018), which reviewed PPP transport projects in Vietnam
from 1997 to 2017. The report highlighted various challenges faced during the
implementation of PPPs, including lack of clear legal framework, limited capacity
of local authorities, and unstable macro-economic conditions. It also recommended

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that the government provide clear guidance on project selection, risk allocation and
financial sustainability.
While the Ministry of Transport Vietnam report is a valuable resource for
understanding the challenges and issues surrounding PPP transport projects in
Vietnam, there are a few shortcomings that should be noted. Firstly, the report does not
provide a comprehensive analysis of all PPP transport projects implemented in
Vietnam, but rather mainly focuses on those that were contracted by the central
government. This limits the scope of the report and may not reflect the situations at the
local level. Secondly, the report does not provide a detailed assessment of the
effectiveness of the decision-making process in PPP transport projects, but rather
focuses on the challenges associated with the implementation and operational phases.
Despite these limitations, the Ministry of Transport Vietnam report provides
useful insights for policymakers, investors and other stakeholders involved in the
development and implementation of PPP transport projects in Vietnam.
From a scientific theoretical approach, PT Le et. Al. (2014) conducted a
systematic literature review on taxonomy of risks in PPP transportation projects.
The limitation is that all relevant research efforts (refinement of articles,
establishment of risk titles, and categorization of risks into the Risk Breakdown
Structure) heavily rely on the subjective judgment of the authors. This subjective
judgment may introduce inherent bias among academic researchers. Nevertheless,
steps have been taken to mitigate this limitation to the greatest extent possible.
These measures include conducting cross-examination among researchers and
implementing a double review process.
Overall, these studies demonstrate the complexity surrounding PPP transport
projects in Vietnam, and the need for more transparent and objective decision-
making processes. While these studies provide valuable insights into various
aspects of PPP transport projects in Vietnam, they still have some limitations. The
study on Policy evaluation of PPP transport project decision-making in Vietnam is a
gap that this dissertation has aim to fill.

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6. Thesis structure
Apart from Acknowledgement, Introduction and Conclusion, this paper shall
include 03 chapters:
Chapter 1: Theoretical framework of evaluation of decision-making policy on
PPP transport project
Chapter 2: Analysis of decision-making policy on PPP transport project in
Vietnam.
Chapter 3: Recommendations for decision-making policy on PPP transport
project in Vietnam.

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CHAPTER 1. THEORETICAL FRAMEWORK OF EVALUATION OF
DECISION-MAKING POLICY ON PPP TRANSPORT PROJECT
project
1.1.1. Key definitions and History of Evaluation of Decision-making policy on
1.1.1.1. Definition of Evaluation of Decision-making policy on PPP transport
project
Definition of PPP project
PPP is one of three main methods to implement public projects (include:
traditional public procurement, PPP, and hybrid). Definitions of PPPs can vary
depending on the country and organization providing the definition. Here are three
definitions of PPPs from the World Bank (World Bank Group, 2021), India
(National Assembly of India, 2011), and the United Kingdom (United Kingdom
Infrastructure and Projects Authority, 2021):
World Bank definition: “A long-term contract between a private party and a
government entity, for providing a public asset or service, in which the private
party bears significant risk and management responsibility, and remuneration is
linked to performance”.
India definition: “An arrangement between a statutory/government owned
entity on one side and a private sector entity on the other, for the provision of
public assets and/or public services, through investments being made and/or
management being undertaken by the private sector entity, for a specified period of
time, where there is well defined allocation of risk between the private sector and
the public entity and the private entity receives performance linked payments that
conform (or are benchmarked) to specified and pre-determined performance
standards, measurable by the public entity or its representative”.
United Kingdom definition: “A partnership between the public and private
sectors for the purpose of delivering a project or service traditionally provided by

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the public sector, using the skills and expertise of the private sector, with the
transfer of significant risks to the private sector”.
Overall, PPPs are a contractual arrangement between public and private
partners, typically with a focus on infrastructure or service delivery. In PPPs,
private parties bear significant risks and management responsibilities, and payment
or remuneration is often linked to performance. The aim of PPPs is to use the skills
and expertise of the private sector to deliver public services and infrastructure,
while transferring some of the risks and responsibilities to the private sector.
Definition of decision-making policy
According to The Open University Textbook on Introducing environmental
decision-making course, decision is typically specific to a particular situation,
although it may have connections to other decisions in different contexts; and
policies are formulated as plans, actions, or procedures intended to influence the
decision-making process. Policies serve as a framework for decision-making, often
providing guiding principles. Nonetheless, decision-making is also an inherent part
of policy, and there exists a dynamic relationship between the two.
A decision-making policy refers to a set of guidelines, criteria, and procedures
that govern the process of making decisions within an organization or government
entity. It outlines the criteria, frameworks, and steps to be followed in evaluating
options, determining the best course of action, and implementing decisions that
align with the organization's goals and objectives.
Definition of policy evaluation
In general, definitions of policy evaluation highlight the systematic nature of
policy evaluation and emphasize the assessment of various aspects such as design,
implementation, outcomes, effectiveness, efficiency, and relevance (Theodoulou
and Kofinis, 2004). The provided sources offer further insights into policy
evaluation methodologies and approaches.
In this thesis, policy evaluation is defined as a systematic and objective
assessment of the effectiveness, and efficiency of policies. The aim of policy

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evaluation is to provide information to policymakers and stakeholders, and the
public about the strengths and weaknesses of a policy, and to inform future
decision-making.
Definition of evaluation of decision-making policy on PPP transport
project
Evaluation of decision-making policy on PPP transport project is a systematic
and objective assessment of the effectiveness, and efficiency of policy on PPP
transport project.
The aim of policy evaluation is to provide information to policymakers and
stakeholders, and the public about the strengths and weaknesses of a policy or
program, and to inform future decision-making.
1.1.1.2. History of Evaluation of Decision-making policy on PPP transport project
History of decision-making policy on PPP transport project
The history of decision-making policy on PPP transport projects can be traced
back to various countries around the world. In general, the history of decision-
making policy on PPP transport project goes along with the history of PPP project.
While the specific timelines and approaches may vary, the general evolution
of PPP transport projects can be summarized as follows:
- Early Stages (Pre -20th
Century): The concept of involving the private sector
in the provision of public infrastructure can be seen in historical examples such as
toll roads and canals. These projects were funded and operated by private entities
under government oversight.
- 20th
Century: The idea of formalizing PPP arrangements gained traction in
the mid-20th
century. In the United Kingdom, for example, the introduction of the
Private Finance Initiative (PFI) in the 1990s laid the foundation for private
involvement in public infrastructure projects, including transport.
- Global Expansion and Diversification: During the late 20th
century, PPP
transport projects gained momentum globally. Countries such as Australia, Canada,
and various European nations embraced PPP models for road, rail, and airport

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development. This period saw a diversification of project types, including the
incorporation of technology-driven transport systems.
History of evaluation of decision-making policy on PPP transport project
Facing the development of PPP investment, the evaluation decision-making
policy is an urgent requirement. The evaluation is expressed through the milestones.
Many countries established dedicated institutions and legal frameworks to facilitate
PPP transport projects. These frameworks often included provisions related to
project procurement, contract management, risk allocation, and dispute resolution.
International organizations such as the World Bank and the Asian Development
Bank also provided guidance on best practices. Over time, decision-making policies
on PPP transport projects have evolved based on lessons learned from earlier
initiatives. Key factors such as transparency, risk management, stakeholder
engagement, and value-for-money considerations have shaped decision-making
processes. Countries continue to refine their policies to strike a balance between
public interest, private sector participation, and project viability.
It is important to note that the history and evolution of evaluation of decision-
making policy on PPP transport projects can vary significantly between countries
due to their unique socio-economic contexts and political landscapes.
1.1.2. Process of Evaluation of Decision-making policy on PPP transport project
Process of PPP project
The process of implementing a PPP project generally involves the following
steps (World Bank Organization, 2016):
- Step 1. Project Identification: The government identifies a need for
infrastructure development or public service delivery that can be fulfilled through a
PPP arrangement.
- Step 2. Feasibility Study - Decision-making phase: A detailed feasibility
study is conducted to assess the project's viability, determine its potential economic,
financial, social, and environmental impacts, and identify risks and challenges.

12
Based on the Feasibility study, the Decision-making Authority makes decision on
investing the project or not.
- Step 3. Procurement Process: The government initiates the procurement
process to select a private partner through a competitive bidding process.
- Step 4. Proposal Evaluation and Selection: The government evaluates the
received proposals based on predetermined criteria. The private partner is selected
based on the evaluation results.
- Step 5. Contract Negotiation: Once a preferred private partner is selected,
contract negotiations begin. The terms and conditions of the PPP agreement are
finalized.
- Step 6. Contract Signing: After reaching an agreement, the government and
private partner sign the PPP contract.
- Step 7. Project Implementation: The private partner commences the
construction or operation of the infrastructure or public service, as specified in the
contract.
- Step 8. Project Operation and Maintenance: Once the infrastructure is
constructed or services are started, the private partner is responsible for operating
and maintaining the project according to the specified performance standards.
- Step 9. Monitoring and Oversight: The government carries out regular
monitoring and oversight of the project's performance to ensure compliance with
contractual obligations, quality standards, and agreed-upon service levels.
- Step 10. Contract Renewal or Termination: At the end of the contract period,
the government may decide to renew the contract, initiate a new procurement
process, or consider alternate options for project management.
It's worth noting that the specific steps and processes may vary from country
to country or project to project. PPP projects require careful planning, risk
assessment, and effective contract management to ensure successful implementation
and achieve the project goals.

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Process of decision-making PPP transport project
Decision-making phase is in the early stage of the process, where based on the
information given on project identification process, the decision-maker evaluates
some factors to decide whether to implement the project or not (SIDT Scientific
Seminar, 2012).
The process will demonstrate several factors to ensure PPP projects’
feasibility. Among the evaluation factors of PPP projects, there are 03 most
important factors, including: Technical factor, Legal factor, and Economic factor.
The technical factor is significant because it includes the design, construction,
operation, and maintenance of the project. The legal factor considers the laws,
regulations, and policies of the government related to PPP and contract agreements.
The economic factor considers the financial viability of the project, including the
cost-benefit analysis, revenue generation, and financial risk assessment. These
factors are significant in determining the success of the project and ensuring that it
is aligned with the objectives of the government and the private sector investors.
Process of Evaluation of Decision-making policy on PPP transport
projects
The evaluation process of decision-making policy on PPP transport projects
typically involves several key steps:
- Step 1. Define Evaluation Criteria: Establish clear evaluation criteria and
objectives to assess the decision-making policy on PPP transport projects.
- Step 2. Collect Relevant Data: Gather relevant data and information on the
decision-making policy on PPP transport project.
- Step 3. Analyze Policy: Evaluate the performance of decision-making policy
on PPP transport projects based on the established criteria.
- Step 4. Identify Lessons Learned: Identify lessons learned from the decision-
making policy. Determine areas of strength, weakness, and recommendations to
stakeholders in decision-making policy on PPP transport projects.

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1.1.3. Stakeholders of Evaluation of Decision-making policy on PPP transport
project
Stakeholders of Decision-making policy on PPP transport project
The stakeholders in the decision-making phase of a PPP transport project
include:
- PPP Project Preparation Unit, is the unit assigned and charged by the
competent agency to create reports for feasibility studies and carry out other
associated duties. The outcome of preparation unit work is PPP transport project
proposal.
- PPP Project Assessment Board, is a committee established to assess and
evaluate PPP projects at various stages of their lifecycle. These boards play a key
role in the decision-making process by reviewing and analyzing project proposals,
conducting feasibility studies, assessing risks, and evaluating the overall viability of
the projects. The outcome of PPP Project Assessment Boards work is Assessment
of Feasibility study reports for PPP transport project.
- Competent Authority, refers to the government bodies or agencies
responsible for overseeing and regulating the implementation and operation of the
project. These authorities play a crucial role in ensuring compliance, transparency,
and success of PPP projects. In the decision-making phase, the outcome of
Competent authorities is Feasibility study reports for PPP transport project.
- Decision-making Authority, refers to the entity or entities responsible for
making key decisions throughout the project's lifecycle. This authority has the
power to make significant choices related to project planning, procurement,
funding, risk allocation, contract management, and overall project management. In
decision-making phase, the outcome of Decision-making authority is Decision on
PPP transport project investment.
Stakeholders of Evaluation of Decision-making policy on PPP transport
project

15
The stakeholders involved in the evaluation of decision-making policy of a
PPP transport project can vary depending on the specific project and context. This
thesis focuses on the following typical key stakeholders:
- Government Agencies: Government agencies at various levels, such as
national, regional, and local authorities, are important stakeholders in the decision-
making policy. They define policy objectives, oversee the procurement process, and
ensure compliance with legal and regulatory frameworks.
- Stakeholders of Decision-making policy on PPP transport project: as
mentioned in the above section includes PPP Project preparation unit, PPP Project
Assessment Board, Competent Authority, and Decision-making Authority
- Other stakeholders: Below are the entities affected by policy impact. They
may not be directly involved in decision-making policy, but their evaluation
determines the success of the policy.
+ Transport Users and Customers: The interests and perspectives of transport
users and customers, such as commuters, businesses, and cargo owners, are
important in decision-making policies. Their satisfaction, safety, and convenience
are crucial to the success of the policy.
+ Private Sector Entities: Private sector entities, including infrastructure
developers, construction companies, transportation operators, and financial
institutions. They participate in the procurement process, submit proposals, and
become contracted partners in the project.
+ Local Communities: Local communities residing near the project site or
affected by project activities are significant stakeholders. Infrastructure
development and operation can have social, economic, and environmental impacts
on local communities. It is essential to engage with them, address their concerns,
and manage potential negative externalities like noise, pollution, or disruptions to
daily life.
+ Public Representatives and Politicians: Elected officials, political
representatives, and policymakers have a role in shaping decision-making policies.

16
They can influence project priorities, funding allocations, and regulatory
frameworks. Engaging with these stakeholders is crucial for obtaining political
support and aligning projects with public interests.
1.2. Criteria to Evaluate Decision-making policy on PPP transport project
The key components of a successful policy on decision-making PPP transport
project comprises several criteria and can vary depending on the context and the
specific policy area. The goal of these criteria is to achieve policy objectives. These
objectives reflect the desired outcomes and benefits that the government and
stakeholders aim to achieve through the implementation of the PPP transport project.
The specific policy objectives may vary depending on the country, region, and
specific project context. It is important for decision-makers to align their choices
with these policy objectives to ensure that the project achieves the intended goals
and contributes to overall societal and economic development. PPP, as a substitute
for traditional financing and procurement methods for infrastructure, is considered
to be success if it gain effectiveness and efficiency (ADB, EBRD, IDB, IsDB, and
WBG, 2016).
Figure 1.1. Criteria to evaluate policy on decision-making
Source: Author's compilation
EFFECTIVENESS
EFFICIENCY

17
1.2.1. Effectiveness criteria
1.2.1.1. Legal framework
Framework for establishing appropriate legal and regulatory provisions,
including the preparation and negotiation of contracts, dispute resolution
mechanisms, and compliance requirements to ensure accountability and protection
of stakeholders' interests.
The legal framework is considered the heart of a policy because it provides the
necessary foundation and legitimacy for the policy's implementation and
enforcement. A policy that is grounded in a legal framework carries the weight of
law. This means that individuals or entities are legally bound to comply with the
policy's provisions. Without a legal framework, the policy may lack the necessary
authority and enforceability. A policy supported by a legal framework is less likely
to be easily overturned or altered inconsistently. The legal process for changing or
amending policies provides stability and continuity, ensuring that policies are well-
considered and subject to appropriate scrutiny. A legal framework ensures that the
policy is consistent with existing laws, regulations, and constitutional provisions. It
helps avoid conflicts or contradictions with other legal requirements and provides
assurance that the policy is legally valid and enforceable.
The ultimate goal of the PPP project is to offer public services. Therefore, a
policy should consider these issues to warrant enough public interest consultation
with end users:
- Social and Cultural Values: Societal values and cultural norms, such as
public values, ethical considerations, social equity, and issues related to human
rights and justice, shape policy decisions.
- Stakeholder Influence: Stakeholders, including interest groups, industry
representatives, civil society organizations, and affected communities, can influence
policy decisions. Policymakers may seek input from stakeholders to ensure diverse
perspectives are considered, and balance conflicting interests and demands.

18
- Environmental Considerations: Policies often need to address environmental
concerns, including sustainability, climate change, biodiversity, and resource
management. Policymakers may consider environmental impacts, apply principles
of environmental conservation, and promote sustainable development.
- Global and Regional Context: Global and regional contexts can influence
policy decision-making, particularly in areas involving international agreements,
trade, security, or cooperation. Policymakers often consider the implications of
policies on global commitments, international relations, and regional dynamics.
- Public Input and Engagement: Public input and engagement can shape policy
decisions through public consultations, surveys, citizen participation, and
engagement with civil society organizations. Policymakers may seek to ensure
transparency, inclusiveness, and accountability in the decision-making process.
- Political Considerations: Politics often play a significant role in policy
decision-making. Politicians may consider factors such as public opinion, electoral
implications, and party ideology when formulating policies.
1.2.1.2. Technical feasibility
Technical feasibility is crucial in the effectiveness of decision-making policies
for PPP projects. Assessing technical feasibility helps determine whether the
proposed PPP project is viable and achievable from a technical standpoint. It
evaluates whether the project's objectives can be realistically accomplished given
existing technology, resources, and expertise. Technical feasibility analysis also
helps identify potential risks and challenges associated with the project's technical
aspects. This includes evaluating the availability of required technology, expertise,
and infrastructure, as well as potential technical constraints or limitations.
Understanding these risks allows policymakers to develop strategies to mitigate
them and ensure project success.
Assessment of whether the proposed project can be successfully implemented
from a technical standpoint involves evaluating the technical aspects of the project,

19
including its design, engineering requirements, technological considerations, and
the availability of necessary resources and expertise.
The core of the PPP project is made up of technical requirements as well as
additional PPP structural criteria. While avoiding being overly prescriptive, what
could prevent the investor from innovation, the technical requirements should
include enough technical information about the project to enable a detailed
definition of the design of the infrastructure (and the characteristics of the service).
Technical feasibility analysis provides insights into the project's complexity,
timeline, and resource requirements. This information enables policymakers to
develop realistic plans, set achievable targets, and allocate resources effectively. It
also helps identify any technical dependencies or interdependencies that need to be
considered during the planning and implementation stages.
Costs are evaluated as part of the technical requirements design process, which
is a crucial component of the commercial viability analysis.
In summary, technical feasibility assessment is essential in decision-making
policies for PPP projects as it helps evaluate the project's viability, manage risks,
ensure cost-effectiveness, enable realistic planning and implementation, and
promote long-term project sustainability. By considering technical feasibility,
policymakers can make informed decisions and increase the likelihood of successful
project outcomes.
1.2.2. Efficiency criteria
1.2.2.1. Outcome evaluation method
With the purpose of this thesis, an efficiency PPP transport project decision-
making policy is defined as a policy that can choose an efficiency PPP project. This
is called “outcome evaluation method” (Kwak, 2009).
The utilization of PPPs allows for new private funding and management
options, while still preserving public involvement in ownership and strategic
policymaking. These partnerships enable the leverage of public funds and provide

20
benefits such as collaborating with qualified private enterprises to oversee and
deliver infrastructure services.
According to Delmon, J. (2017), PPP Infrastructure project financing is
generally obtained from three typical sources:
+ Government financing: Under this method, the government borrows funds
and channels them to the undertaking through subsidies, grants, guaranteed
indebtedness, or on-lending. Even though governments can borrow at a lower
interest rate, they face fiscal constraints in terms of how much they can borrow,
competing with numerous worthy projects for scarce financial resources.
Furthermore, they often manage commercial risk less effectively.
+ Corporate financing: A corporation borrows money based on its established
credit profile and ongoing business, which may or may not be secured against
specific assets or revenue streams. The borrowed funds are then invested in the
infrastructure project. Utilities and state-run businesses sometimes lack the
necessary debt capacity and may have various investment demands competing for
their funding.
+ Project financing: Limited- recourse loans are made directly to the special-
purpose vehicle. The repayment of debt is primarily reliant on the project's cash
flow, with the security of the debt mainly restricted to the assets and revenue
streams of the project as collateral.
As mentioned above, project investment is entirely dependent on the
feasibility or "economic efficiency" of the project. There are many economic factors
that must be considered when appraising a PPP transport project.
Governments should be wary about the potential loss in efficiency or Value
for Money when using a PPP to seek an alternate source of financing (Hu, Xiaowei
2018). If the Value for Money (i.e., incremental efficiency and Value for Money for
society in comparison to a traditional delivery or government-financed alternative
for the project) of the PPP option is not demonstrated, a PPP may drastically reduce
the project's cost-benefit ratio.

21
To visualize these factors, make it “measurable”, below are indicators, such as
Net Present Value (NPV), Benefit – Cost Ratio (BCR), Internal Rate Return (IRR)
to determine the efficiency of the project.
1.2.2.2. Indicators of socio-economic efficiency
In the below equation, CF(t) = Net cash flow in year t; r = Discount rate; t =
Year in which cash flow occurs; and C0 = Initial investment.
(1) NPV
The NPV (Net Present Value) method is one of the most common used project
appraisal techniques in PPP projects. The NPV is calculated by comparing the
present value of expected project cash inflows to the discounted present value of
project cash outflows. If the NPV is positive, it means that expected cash inflows
exceed the cash outflows, and the project is financially viable.
There are two main approaches to calculate the net present value (NPV) of an
investment. They are as follows:
Discounted Cash Flow (DCF) method: The DCF method involves estimating
the future cash flows generated by the investment and discounting them back to
their present value using a discount rate. The formula for calculating the NPV using
the DCF method is as follows:
Equation 1.1. NPV by Discounted Cash Flow method
𝐍𝐏𝐕 = ∑
𝐂𝐅(𝐭)
(𝟏 + 𝐫)^𝐭
− 𝑪𝟎
𝐧
𝐭=𝟎
The sum of all the discounted cash flows is subtracted from the initial
investment to arrive at the NPV.
Adjusted Present Value (APV) method: The APV method is an alternative
method to the DCF method and is used in situations where an investment has
significant tax implications or debt financing. The APV method involves
calculating the value of the investment as if it were financed entirely with equity,

22
and then adjusting for the tax benefits of debt. The formula for calculating the APV
is as follows:
Equation 1.2. NPV by Adjusted Present Value method
APV = NPV + PV of tax shield - PV of financial distress costs
(2) IRR
IRR (Internal Rate of Return) is a financial metric used to evaluate the
profitability of a potential investment or project. The IRR is calculated by finding
the discount rate that equates the present value of the project's expected cash
inflows with the present value of its expected cash outflows.
The IRR is expressed as a percentage and is used to compare the potential
return of a project with the required rate of return or cost of capital. If the IRR is
greater than the required rate of return or cost of capital, the project is generally
considered profitable and may be worthwhile pursuing. The IRR is a commonly
used measure in capital budgeting and investment appraisal, as it provides a
standardized way to rank potential projects based on their expected rates of return.
There are primarily two approaches to calculate the Internal Rate of Return
(IRR): the trial and error or iterative approach and the algebraic approach.
Trial and error or iterative approach:
This method involves trial and error procedure to determine the IRR. In this
method, a discount rate is estimated, and the NPV of the investment is calculated. If
the NPV is positive, the discount rate is too low, and a higher rate is estimated. If
the NPV is negative, the discount rate is too high, and a lower rate is estimated.
This process is repeated until the NPV is zero, and the rate that results in a zero
NPV is considered the IRR.

23
Algebraic approach:
The algebraic approach uses the formula for IRR to find the rate of return
directly. To calculate the IRR, we set the NPV formula equal to zero and solve for
the discount rate (r) using any algebraic means. The formula is as follows:
Equation 1.3. IRR by algebraic method
𝐍𝐏𝐕 = ∑
𝐂𝐅(𝐭)
(𝟏 + 𝐈𝑹𝑹)^𝐭
− 𝑪𝟎
𝐧
𝐭=𝟎
= 𝟎
(3) BCR
BCR stands for "Benefit-Cost Ratio". This financial metric is used to
determine the relative economic value of a project by comparing its anticipated
benefits with its expected costs. The BCR is calculated by dividing the total
expected benefits of the project by the total expected costs. A ratio greater than 1
indicates that the project is expected to generate more benefits than it will cost,
while a ratio less than 1 suggests that the project's costs will outweigh its benefits.
Traditional Approach:
The traditional approach calculates the BCR by dividing the total expected
benefits of a project by the total expected costs. This approach assumes that all the
costs and benefits occur at the same time, rather than being spread out over the
lifetime of the project.
Equation 1.4. BCR by Traditional method
BCR = Total expected benefits / Total expected costs
Present Value Approach:
The present value approach calculates the BCR by taking into account the time
value of money, which means that future costs and benefits are discounted to reflect
their current value. This approach is more accurate than the traditional approach
because it accounts for the fact that a dollar today is worth more than a dollar
tomorrow.

24
Equation 1.5. BCR by Present value method
BCR = Present value of expected benefits / Present value of expected costs
(4) ROE
There is not exactly a regulation for estimating Return on Equity (ROE) rate
of PPP project in decision-making phase.
World Bank (World Bank Group, 20116) state that the ROE for a PPP project
can vary depending on several factors. It represents the return on investment that
equity investors expect to earn from their capital contribution to the project. The
specific ROE for a PPP project will depend on factors such as the perceived risk of
the project, the country or region where the project is located, the sector of the
project (e.g., transportation, energy, water), and the prevailing market conditions.
Given these variables, it is difficult to provide an exact ROE rate for PPP
projects as it can differ on a case-by-case basis. It is common for investors to expect
a higher ROE in PPP projects compared to other investments due to the potential
risks and uncertainties associated with such projects. It is also suggested that
governments and investors carefully assess and negotiate the rate to ensure it is
reasonable and aligns with the project's financial viability and risk profile.
1.3. Case studies of evaluating decision-making policy on PPP transport
project in some countries
1.3.1. Evaluate policy on decision-making in Koudougou Bus Station in Burkina
Faso
The Koudougou Bus Station PPP project in Burkina Faso is facing risks due to
the shortage of evaluating decision-making policies.
Firstly, there is a vague legal framework. There is no limit on construction
costs, which could result in investments that are excessively burdensome for the
community and can lead to additional operating costs. The lack of a standardized
construction model and quality benchmark for materials results in the production of
lower-quality infrastructure that is difficult to regulate. For example, the use of
sheet metal doors, a one-size-fits-all approach for ticket windows, or expensive

25
paving or tarmacking can decrease the overall quality of the project. Construction
delays may occur due to the absence of construction contracts, which can cause
project timelines to be extended. Unofficial facilities such as women's facilities,
tricycles, street vendors, and individually run shops near the STAF wall that are
unofficially approved may become potential sources of tension and conflict
depending on the circumstances.
Secondly, insufficient support and monitoring of the application of PPP texts
at the level of local authorities can pose risks to the successful implementation of
the project. Without proper support and guidance from the local authorities, there
may be a lack of understanding and knowledge of the PPP framework, leading to
ineffective implementation and increased chances of errors or non-compliance.
In addition, instability within municipal councils can disrupt the continuity of
the project's implementation, decision-making processes, and overall governance.
Changes in leadership or political dynamics can introduce uncertainties and
potentially delay or derail the project.
Therefore, this project is facing high risk and need to be re-consider the policy
on decision-making.
1.3.2. Evaluate policy on decision-making in Delhi-Gurgaon Toll Road Project in
India
At the time of decision-making the project, the toll road was experiencing a
daily traffic volume of approximately 200,000 vehicles, which is expected to exceed
500,000 by 2023. However, the road's capacity is insufficient to accommodate such
a high volume of traffic. Consequently, both the toll road and toll plazas are
expected to become congested in the future.
To address this congestion and serve the broader public interest, it is necessary
to construct parallel connecting routes. During the project procurement, National
Highway Authority of India relied on a traffic study conducted in 1998. However, it
soon became apparent that the actual traffic volume greatly exceeded the projected
numbers from the very beginning of commercial operations. The expressway
experienced heavy queues at toll booths and significant delays in traffic flow, which

26
undermined the expressway's intended purpose of reducing travel time, fuel costs,
and congestion. As a result, the project seemed socially unviable.
Fortunately, the decision-making is reconsider, and timely action and
necessary measures taken by the authorities and the Concessionaire helped improve
the conditions on the expressway.

27
CHAPTER 2. ANALYSIS OF DECISION-MAKING POLICY ON PPP
TRANSPORT PROJECT IN VIETNAM
project in Vietnam
2.1.1. Key Definitions and History of Evaluation of Decision-making policy on
PPP transport project in Vietnam
2.1.1.1. Definition of Decision-making policy on PPP transport project in Vietnam
Definition of PPP project
The definition of PPP project, according to Law on PPP 2021 is that: “Public -
private partnership investment refers to a form of investment carried out by the
fixed-term cooperation between the state and a private-sector investor through
conclusion and execution of a PPP project agreement in order to call for private
sector involvement in a PPP project”.
While these definitions share common elements, such as collaboration
between the public and private sectors and the involvement of private sector
financing and expertise, there may be minor differences in wording and emphasis.
The specific characteristics and regulatory frameworks for PPP projects can vary
across countries and institutions.
Definition of decision-making policy on PPP transport project
In Vietnam, there is no specific, comprehensive definition of decision-making
policy outlined in the Law on PPP. Consequently, the decision-making process for
PPP projects may be guided by a combination of various laws, regulations,
guidelines, and administrative procedures. These may differ depending on the
specific project and the authorities involved.
According to Article 17 of the Law on Public-Private Partnership Investment
in Vietnam, an investment policy decision for a PPP project should include the
following key information: Project name; Competent authority responsible for the
project; Objectives, proposed project scale, site, and execution timeline; Land and

28
natural resource demands related to the project; Proposed PPP contract type;
Preliminary total investment estimate and financial plan, including the structure of
funds invested, expected price bracket, and prices of public products/services for
fee-based projects; Mechanism for guaranteeing investment and distributing
revenue reductions. Additionally, for projects involving high or new technologies,
the investment policy decision should also include the bid solicitor's name, investor
selection form, and the time of the investor selection event.
To find out the decision-making policy, stakeholders need to find a variety of
principles, guidelines, and procedures that govern the process of making decisions
regarding the above information.
2.1.1.2. History of Evaluation of Decision-making policy on PPP transport project
in Vietnam
History of decision-making policy on PPP transport project in Vietnam
The history of decision-making policy on PPP transport project goes along
with the history of PPP project in Vietnam.
- Before 2008:
In Vietnam, PPP investment was first implemented in 1997 with only one
form of BOT (Build - Operate - Transfer) contract (Decree No. 77/CP dated June
18th
, 1997 of the Government on the issuance of regulations on investment in the
form of build-operate-transfer contracts). By 1998, PPP contracts had been
expanded to include three types of BOT, BTO (Build - Transfer - Operate), and BT
(Build - Transfer), but only applied to foreign investment in Vietnam (Decree No.
62/1998/ND-CP dated August 15th
, 1998 of the Government on the issuance of
regulations on investment in the form of build-operate-transfer contracts, build-
transfer-operate contracts, and build-transfer contracts applying to foreign
investment in Vietnam). In 2004, the Ministry of Finance issued Circular No.
90/2004/TT-BTC dated September 7, 2004 guiding the collection, payment,
management, and use of road tolls, which regulated road investment for business,
toll stations, and conditions for applying road tolls.

29
In 2005, the concept of the three types of BOT, BTO, and BT contracts was
first regulated in the Investment Law and continued to be implemented in Decree
No. 78/2007/ND-CP dated May 11, 2007 of the Government on investment in the
form of build-operate-transfer contracts, build-transfer-operate contracts, and build-
transfer contracts.
Overall about this period, legal documents only regulated general issues
(investment fields, sources of capital, conditions for project implementing
enterprises, investment licensing procedures, project contract signing, investment
implementation, etc.), the content of the contract was mainly agreed upon by the
parties, and there was no guidance on selecting investors, although the 2005
Bidding Law had been issued and in effect since April 1, 2006, it did not adjust the
selection of PPP project investors.
- From 2009 to 2014:
According to the compiled data from the Ministry of Transport, the majority
of infrastructure investment projects in the form of BOT and BT contracts are being
implemented in this phase based on regulations from Government Decree No.
108/2009/NĐ-CP, Circular No. 166/2011/TT-BTC and No. 159/2013/TT-BTC of
the Ministry of Finance. From 2011 to 2015, the Ministry of Transport alone
mobilized approximately 158.742 trillion VND to invest in 52 projects under BOT,
BT and BOO contracts, including 46 BOT projects, 1 BT project combined with
BOT, 4 BT projects and 1 BOO project.
- From 2015 to 2020: Although the legal provisions on investment under the
PPP method in the period of 2015 - 2020 are quite comprehensive compared to
before, the number of implemented projects during this period is not significant. For
detail, from 2016 to 2021, the Ministry of Transport has only implemented 04 PPP
projects: 01 project of automatic toll collection without stopping in the form of
BOO contract; 03 PPP projects on the East North - South Expressway in the period
of 2017 - 2020 (Dien Chau – Bai Vot, Nhan Trang - Cam Lam and Cam Lam -
Vinh Hao sections).

30
- From 2020 to now: In 2020, Vietnam issued Law on PPP for the first time. It
is hoped to be a milestone in PPP legal framework and help to make decision-
making policy on PPP project both effective and efficient. However, up to now,
there have been any transport projects completed under this regulations.
History of evaluation of decision-making policy on PPP transport project
in Vietnam
Vietnam has established dedicated institutions and legal frameworks to
facilitate PPP transport projects.
Over time, decision-making policies on PPP transport projects have evolved
based on lessons learned from earlier initiatives.
In early years (2000s-2010s), Vietnam started exploring the use of PPPs in
infrastructure development, including transport projects. During this time, the
evaluation of decision-making policies on PPP transport projects was primarily
focused on financial viability, economic benefits, and environmental impact
assessments. Decision-making authorities evaluated projects based on cost-
effectiveness, revenue potential, and other financial considerations. Environmental
and social impact assessments were also conducted to ensure projects complied with
sustainability standards.
In 2020, Vietnam enacted the Law on Public-Private Partnership, providing a
legal framework for implementing PPP projects, including transport projects. The
law introduced more comprehensive evaluation criteria, including technical
feasibility, financial viability, risk allocation, and the potential for private sector
participation. Since the introduction of the PPP Law, Vietnam has continued to
refine and improve the evaluation process for PPP transport projects. Decision-
making authorities have focused on conducting thorough feasibility studies,
including traffic demand analysis, cost-benefit analysis, and value-for-money
assessments. Social and environmental impact assessments have become more
rigorous to ensure projects align with sustainable development goals.

31
2.1.2. Process of Evaluation of Decision-making policy on PPP transport projects
in Vietnam
Process of PPP project in Vietnam
According to Article 11 of the Law on Public-Private Partnership Investment
in Vietnam, the process for PPP projects is outlined as follows:
Figure 2.1. Process of PPP project in Vietnam
For special PPP projects (projects that involve high technologies or new
technologies, project involves a construction work that requires an architectural
proposal test), there are some additional regulations. According to Decision No.
38/2020/QD-TTg dated 30th
December, 2020 of Prime Minister on approving the
list of high technologies prioritized for development investment and the list of hi-
tech products encouraged for development, in general, transport project is not on
that list. Therefore, it will apply the general process as in Figure 3 above.
In general, PPP process in Vietnam is the same as international PPP process.
Implementing the PPP contracts.
Establishing PPP project enterprises and concluding PPP contracts
Selecting investors for the project
Project approval
Making feasibility study reports Assessing feasibility study reports
Decisions on investment policies
Making pre-feasibility study reports Assessing pre-feasibility study reports

32
Process of decision-making PPP transport project in Vietnam
In general, the decision-making process for PPP transport projects in Vietnam
may have similarities to the international decision-making process. Both processes
typically involve project proposal from preparing unit, feasibility studies, evaluation
and approval, and decision-making.
Figure 2.2. Process of decision-making PPP transport project in Vietnam
Process of Evaluation of Decision-making policy on PPP transport
projects in Vietnam
Applying the evaluation process of decision-making policy on PPP transport
projects mentioned in Chapter 1, the evaluation of Decision-making policy on PPP
transport projects in Vietnam is as follows:
- Step 1. Define Evaluation Criteria: Establish clear evaluation criteria and
objectives to assess the decision-making policy on PPP transport projects in
Vietnam.
- Step 2. Collect Relevant Data: Gather relevant data and information on the
decision-making policy on PPP transport project in Vietnam.
PPP transport
project
proposals
Assessment of
Feasibility study
reports for PPP
projects
Feasibility
Report
Decision on PPP
transport
project
investment

33
- Step 3. Analyze Policy: Evaluate the performance of decision-making policy
on PPP transport projects based on the established criteria in Vietnam.
- Step 4. Identify Lessons Learned: Identify lessons learned from the decision-
making policy. Determine areas of strength, weakness, and recommendations to
stakeholders in decision-making policy on PPP transport projects in Vietnam.
2.1.3. Stakeholder of Evaluation of Decision-making policy on PPP transport
project in Vietnam
The stakeholders involved in Evaluation of Decision-making policy on PPP
transport project in Vietnam include:
- Government Agencies and Entities affected by policy impact, as mentioned
in in Chapter 1.
- Stakeholders of Decision-making policy on PPP transport project:
(1) PPP project preparation unit
At central-level project, there are 02 PPP units could be preparation unit,
according to Circular No. 50/2022/TT-BGTVT dated 31st
August, 2022 of Ministry
of Transport on the performance of functions and tasks of competent agencies,
agencies that sign and perform investment project contracts under the mode of
public-private partnership managed by the Ministry of Transport:
+ Specialized Management Authority, includes: Vietnam Road
Administration, Vietnam Maritime Administration, Vietnam Aviation
Administration, Vietnam Railways Department, Vietnam Inland Waterway
Administration; and Vietnam National Expressway Authority.
+ Project Management Unit: The PMU is a public non-business unit.
At local-level project, there is not a definite regulation on definition of
preparing unit. These preparing unit is responsible for coordinating and overseeing
the preparation, implementation, and monitoring of PPP projects in the country.

34
(2) PPP Project Assessment Board
Article 6 of the PPP (Public-Private Partnership) Law discusses the
establishment of PPP Project Assessment Boards. These Boards are responsible for
assessing pre-feasibility study reports and feasibility study reports for different
types of PPP projects.
There are three types of PPP Project Assessment Boards:
- The State Assessment Board: This board assesses projects falling under the
authority of the National Assembly to grant investment policy decisions.
- The Interdisciplinary Assessment Board: This board assesses projects falling
under the authority of the Prime Minister to grant investment policy decisions.
- Other Assessment Boards: These boards, established by the Minister, Head
of central or other body, or President of a provincial People's Committee, assess
projects falling under their respective authorities.
The Prime Minister has the authority to establish the State and
Interdisciplinary Assessment Boards upon the request of the Minister of Planning
and Investment.
Depending on the project's size, scale, and significance, grassroots-level
Assessment Boards can be set up or directly controlled units can be assigned to
conduct assessments for PPP projects.
The PPP Project Assessment Board and its subordinate unit may hire
independent consultants to support their assessment tasks.
(3) Competent authority
Article 5 of the Law on PPP outlines the competent authorities and authorities
responsible for signing PPP contracts in Vietnam.
- Competent authorities include Ministries, Ministry-level agencies,
governmental agencies, central bodies affiliated with political organizations, and
other organizations like the Supreme People's Procuracy, Supreme People's Court,

35
State Audit, Office of the President, Office of the National Assembly, and central
bodies of Vietnam Fatherland Front and socio-political organizations. It also
includes Provincial People's Committees and agencies and organizations set up by
the Government and the Prime Minister, responsible for state budget estimates.
- Authorities signing PPP contracts include the competent authorities
mentioned in clause 1 of this Article. Additionally, entities and units authorized by
competent authorities to sign contracts can act as authorities.
- In situations where multiple competent authorities manage a project or if
there is a change of competent authorities, these authorities must report to the Prime
Minister for the designation of a competent authority.
Competent agencies have the right to authorize their directly controlled
agencies or units to act as authorities to sign contracts and execute PPP projects
within their assigned authority.
(4) Decision-making authority
Article 12 of the Law on PPP outlines the authorities responsible for issuing
policies for investment in PPP projects in Vietnam. Here are the main points:
- The National Assembly has the authority to issue decisions on policies for
PPP projects that meet certain criteria, including projects with significant public
investment capital, projects with substantial environmental impacts, and projects
involving large-scale resettlement.
- The Prime Minister has the authority to grant decisions on investment
policies for PPP projects that do not fall under the criteria mentioned in point 1,
such as projects involving resettlement, projects using central budget capital or
foreign loans, and projects related to airports, seaports, and their infrastructure
construction.
- Ministers, Heads of central authorities, and other agencies have the authority
to grant decisions on investment policies for PPP projects under their management,
excluding projects falling under the criteria mentioned in points 1 and 2.

36
- Provincial People's Councils have the authority to make decisions on
investment policies for PPP projects within their jurisdiction, except for projects
falling under the criteria mentioned in points 1 and 2.
Adjustments to policies for investment in PPP projects are subject to
regulations specified in Article 18, Clause 2 of the PPP Law.
Compared with the PPP legal framework of other countries around the world,
the PPP legal framework in Vietnam has many similarities and has already
incorporated most of the principles analyzed in section II above.
Currently, there are two main legal systems in the world. The 'common law'
system, characterized by 'judge-made law', means that in terms of legal texts, laws
passed by the National Assembly will only consist of general rules. The market and
the litigation legal system (including courts, arbitrators, etc.) will provide specific
interpretations of these rules for each case. On the other hand, the 'civil law' legal
system will provide specific explanations and regulations corresponding to the
principles, issued by the government.
Vietnam follows the civil law legal system, thus, in addition to regulating
principles like the recommendations of international organizations (World Bank, ADB,
etc.) and learning from the experiences of countries (UK, India, South Korea, etc.),
Vietnam has customized those principles into specific regulations, as analyzed below.
2.2. Apply Evaluation Criteria to Decision-making Policy on PPP transport
project in Vietnam
2.2.1. Effectiveness criteria
2.2.1.1. Legal framework
Current legal system on Decision-making policy on PPP transport project
in Vietnam
The legal framework for decision-making policy on Public-Private Partnership
(PPP) transport projects in Vietnam consists of several key laws and regulations.

37
Table 2.1. Current legal framework on PPP transport project decision-making
in Vietnam
First, the Law on Public-Private Partnership Investment (Law on PPP) was
enacted in 2020 and provides a legal basis for PPP projects in various sectors,
including transport. It outlines the roles and responsibilities of different
stakeholders, including the government, private investors, and project
implementers.
Law on PPP is mainly intended to regulate the specific provisions of PPP
investment. For other matters, the PPP Law does not prescribe but refers to other
laws, including:
+ Law on organization of the authority issuing decisions on policies for
investment in PPP projects, such as: Law on National Assembly organization, Law
on government organization, Law on local government organization, et al.
+ Law on public budget, such as: Law on Public Investment, Law on State
Budget, et al.
LAW
• PPP law
• Relevant
law
DECREE
• Decree No. 35 on
elaboration of some
Articles of the Law on
PPP
• Decree No. 28 on
financial management
mechanism for PPP
Projects
CIRCULAR
•Circular No. 09 of Ministry of
Planning and Investment providing
guidelines for selection of investors
executing PPP projects and investment
projects involving land use.
Transport providing guidance on bid
evaluation methods and criteria for
selection of investors executing PPP
projects and template of build-operate-
transfer contract in transport sector.
Transport providing guidelines on
some contents of pre-feasibility study
reports and feasibility study reports of
investment projects in the forms of
public-private partnership, build-
operate-transfer contracts in transport
sector

38
+ Law regulates private entity, such as: Law on Enterprise, Law on Taxes,
Law on Investment, et al.
+ Law on state management, such as: Law on Inspection, Law on Auditing,
regulations on publicity and transparency, Law on Land, et al.
+ Specialized law, such as: Law on Construction, Law on Road traffic, Law on
management and use of public property, et al.
Second, there are 02 main Decrees guiding Law on PPP. The first one is
Decree No. 35/2021/ND-CP dated March 29th
, 2021 of Government on elaboration
of some Articles of the Law on PPP, which elaborates regarding investment sectors,
scales of PPP projects; PPP Project Assessment Boards; preparations for PPP
projects; selection of investors executing PPP projects; confirmation of completion
and transfer of works and infrastructure; termination of PPP project contracts;
handling of various situations and violations during PPP investment. The another
one is Decree No. 28/2021/ND-CP dated March 26th
, 2021 of Government, which
guide on financial management mechanisms of PPP projects, regarding: financial
plans, assuance of bonds by PPP project enterprises; management and use of state
capital in PPP projects; settlement of capital invested in completed works and
infrastructure system; procedures for transfer of completed works and infrastructure
system to competent authorities; and sharing of increases and decreases in revenue.
Third, there are 3 main Circular on guidance of PPP project regarding
transport sector. While Circular No. 09/2018/TT-BKHDT of Ministry of Planning
and Investment provides guidelines for selection of investors executing
PPP projects, including regulations on preparation of prequalification documents,
negotiation documents and bidding documents for PPP projects; Circular No.
09/2021/TT-BGTVT of Ministry of Transport providing guidance on bid evaluation
methods and criteria for selection of investors executing PPP projects and template
of build-operate-transfer contract in transport sector; and Circular No. 22/2022/TT-
BGTVT of Ministry of Transport provides guidelines on some contents of pre-
feasibility study reports and feasibility study reports of investment projects in the

39
forms of BOT, including: socio-economic efficiency indicators; rates of ROE of
investors; indicators for evaluation of quality of infrastructure works/systems
provided by project enterprises; depreciation periods of infrastructure
works/systems.
The biggest problem of the PPP legislation is that, the two parties seek for
other benefits. From the perspective of state agencies, it is not the most important to
prioritize profits, but to comply with regulations and rules regarding civil servant
responsibilities. Only those activities that are specifically governed by the law can
be implemented, whereas in contrast, under civil law, private enterprises are
allowed to carry out anything not prohibited by the law, with the ultimate goal of
maximizing profits. Due to different approaches, goals, and tools, state agencies and
investors frequently encounter difficulties in constructing and negotiating contracts.
That is the reason why the Government must issue some specific sample of contract
in law. However, the more detail the rule is, the more feasible it is to be adjusted,
make the legal system unstable.
According to Article 14, 15 Law on PPP, the bases for preparation of
feasibility study reports will not only depend on law documents, but also the
strategies, plans and planning schemes.
Bases for PPP transport project decision-making in Vietnam
Table 2.2. Bases for PPP transport project decision-making in Vietnam
National socio-
economic
development
strategies, plans
and other
planning schemes
in accordance
with law on
planning;
Planning
Provisions of this
Law and other
regulations of
other laws related
to the sectors
where projects
invest
Law
Other relevant
legislative
documents
Others

40
From the above regulations, it can be seen that, besides legal documents,
Planning, and other guiding documents are also bases for PPP projects. This is
appropriate considering the urgency of the project as well as placing it in the overall
context of the development strategy (factors that are not expressed in ordinary legal
documents - inherently stable, not providing strategies, not really based on up-to-
date event). However, this basis may make it difficult for investors to find the legal
basis of the project. An example of the Legal basis is in Appendix 1.
One problem of public-private partnership is the asymmetry in legal status
between the contracting parties, because the contracting agency is also the state
administrative agency. This relationship easily leads to SPV's apprehension about
state agencies confusing their functions when performing contracts with SPV as
they do administrative management with subordinate units. To handle this concern,
World Bank suggest a mechanism called “Independent Engineer”, who is
independent from both Government and Investor. This engineer will act as an
intermediary in project management. This mechanism is quite efficient from the
“dependence perspective”.
In Vietnam, Government will control the quality of the project, and the
independent third party only appears when dispute arises. This will help to decrease
of total investment budget, as parties do not need to pay the cost on the third party
on the whole project.
Additionally, a specialized unit is tasked with monitoring PPP schemes and
guaranteeing conformity with appropriate legislation and guidelines: The Ministry
of Planning and Investment is accountable for the PPP framework and protocols,
whereas the Ministry of Transport manages the execution of PPP plans related to
highways.
Parties involved in the PPP project will have access to important information
about the project, and this information should be shared openly and promptly in a
transparent manner. These requirements below are mandatory to keep the project
transparent:

41
- Publish information online: According to Article 9 Law on PPP, information
available on the Vietnam National E-Procurement System includes: Information
about investment policy decisions or decisions on approval of PPP projects;
Information about selection of investors, including invitation for prequalification,
invitation to bid, shortlist, bidder selection results; Information about selected
investors in PPP projects and PPP project enterprises; The main contents of a PPP
project contract, including total investment; proportion of funds invested in a
project; type of contract; duration of project implementation; prices and costs of
each public product and service; fee or cost collection forms and locations (if any)
and other necessary information; The settled amount of public investment capital
invested in PPP projects in the case of using public investment capital; Legislative
documents regarding PPP investment; Investor database; Information on settlement
of complaints, denunciations, petitions and sanctioning of violations of PPP
investment law.
- Conduct public consultations: The government will organize market
sounding of to gather feedback, as mentioned above. This can provide an
opportunity for interested parties to voice their concerns, ask questions, and learn
more about the project.
- Monitor and evaluate project performance: Mainly governed by specialized
laws and regulations on operation and maintenance of infrastructure, there are
currently no effective tools to assess the level of user satisfaction with the provided
services.
2.2.1.2. Technical Feasibility
In order to verify that the suggested solution is both viable and capable of
being executed properly, an appraisal will be conducted on the project's technical
potential. This task is usually implemented very early and is the main job of the
project preparation unit.
In Vietnam, the legal documents that guide the technical feasibility of a
transport project can include the following:

42
- Law on Investment: The Law on Investment provides guidelines and regulations
for investment activities, including transport infrastructure projects. It outlines the
requirements for feasibility studies and the assessment of technical viability.
- Law on Construction: This law governs construction activities in Vietnam. It
sets out the technical requirements and standards for construction projects,
including transport infrastructure. The law also specifies the procedures and
documents needed for obtaining construction permits.
- Law on Environmental Protection: The Law on Environmental Protection
establishes the framework for assessing the environmental impact of projects,
including transport infrastructure. It outlines the requirements for conducting
environmental impact assessments (EIAs) and implementing mitigation measures to
minimize negative effects on the environment.
- Vietnamese National Technical Regulations: These are technical standards
and regulations specific to various aspects of transport infrastructure, such as road
construction, bridge design, railway systems, and transportation safety. These
regulations provide guidelines for ensuring the technical feasibility and compliance
of transport projects.
- Circulars and Decrees: The Vietnamese government issues circulars and
decrees that provide more detailed guidance on specific aspects of transport project
feasibility, construction, and operation. These documents may address technical
requirements, procedures, and standards relevant to different types of transport
infrastructure.
Guidelines from Ministry of Transport: The Ministry of Transport issues
guidelines, circulars, and regulations specific to the transport sector. These
documents provide detailed technical requirements and guidelines for transport
infrastructure projects, including bridges, roads, railways, ports, and airports.

EVALUATION OF DECISION-MAKING POLICY ON PUBLIC - PRIVATE PARTNERSHIP TRANSPORT PROJECTS IN VIETNAM

EVALUATION OF DECISION-MAKING POLICY ON PUBLIC - PRIVATE PARTNERSHIP TRANSPORT PROJECTS IN VIETNAM

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