Infrastructure crucial to development

Infrastructure development – especially in the transport, energy and environment sectors – has been a major concern in the country. Viet Nam News spoke with the director of the Italian Trade Commission in Viet Nam, Marco Saladini, about the issue.

What is your opinion of Viet Nam’s infrastructure situation?

The need to improve infrastructure in Viet Nam is obvious to all. Much has been achieved but a lot still needs to be done. Our research has shown that about US$80 billion needs to be invested in the three key sectors of energy, transport and environmental protection. This investment would contribute greatly to poverty reduction and to improving everyone’s quality of life.

What do you think about public-private partnership (PPP), which is a very new concept in Viet Nam?

As I said, the size of the investment and the need for speed will necessitate the involvement of all economic sectors. It’s not just a matter of funding. Infrastructure requires good planning, construction and operation. Public-private partnership (PPP) will be useful because it combines financial, supervisory and administrative support from the public sector with things such as design, construction, management and finance from the private sector. We ran some training activities on this subject for companies and administrations both in Viet Nam and Italy and there was strong interest. Setting up PPP schemes in Viet Nam will require a great deal of effort from all parties concerned. Italian companies and banks are already showing some preliminary interest in taking part in PPP schemes here.

What can Italian firms provide in terms of infrastructure development?

Italian businesses are well-positioned to respond to the challenge of developing infrastructure in Viet Nam. Besides existing PPP-style schemes, which are also found in sectors other than transportation, I would like to mention a few other advantages Italian firms can offer.

First, Italy has a very long tradition of building infrastructure works, starting from the Roman civilisation, 2,500 years ago. It is being continued and propagated by a number of companies and institutions that are at the forefront of today’s technology in their respective areas of competence. They include a full range of equipment manufacturers; engineering companies capable of designing and delivering specific parts of a project or turn-key solutions, as needed; general and special-purpose contractors; utility companies, which have recently started to take interest in overseas operations; financial institutions involved in infrastructure; and research centres.

Second, technical challenges, stemming both from natural and man-made obstacles, stimulate engineers and contractors to find new and effective solutions.

Third, the publicly owned privately managed company model, developed in Italy by utility companies, has often been able to address the needs of local communities, at the same time providing a source of durable and effective investment, while ensuring an adequate and steady cash flow.

Could you give us an overall picture of Italian companies’ investment in Viet Nam’s transport, energy and environment sectors?

Italian businesses are only just beginning to invest in these sectors in Viet Nam. At a seminar organised by ITC, with the support of the Italian embassy, that was held on October 4, 2010 in Ha Noi, Italian business were encouraged to enter the Vietnamese market. They were also asked to set up joint-ventures with Vietnamese companies. This message was conveyed by a number of speakers, including Vice Minister for Planning and Investment Dang Huy Dong and Italian Ambassador Andrea Perugini. Ayumi Konishi, who was also present, was very upbeat about support from the Asian Development Bank. Even though just six companies came to Viet Nam for the seminar, their presence was welcomed by more than 100 attendees and by 28 companies, both Vietnamese and foreign-invested. At this and subsequent business-to-business meetings, more than 80 appointments were set. I think that was a very promising start!

According to official sources, since 2000, 58 Italian companies have invested in Viet Nam a total of US$162 million. What challenges do Italian businesses face when doing business in Viet Nam?

Most of the Italian investors I have spoken to are enthusiastic about Viet Nam and have expansion plans. They of course face challenges in their day-to-day operations. At the set-up stage, some of them had difficulties understanding what was required in terms of regulations. As far as operations are concerned, it has become increasingly difficult to clear customs, in some cases. Companies are puzzled by this, especially given that Viet Nam has been putting much effort into economic integration and has been promoting itself as a cost-effective and regionally integrated economic hub. My office has set up an investment desk, in close connection with the Foreign Investment Agency of Viet Nam and other relevant authorities, in order to provide support to Italian companies.

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