Vietnam law has general provisions regarding investor selection. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are investor selection procedures in PPP in Vietnam? What are regulations on assurance of competitive investor selection in PPP? Thanks for answering my questions!”
Legal grounds
- 2014 Vietnam Law on Public-Private Investment
Investor selection procedures in PPP
– An investor shall be selected according to the following procedures:
+ Drawing up the shortlist (where applicable);
+ Making preparations for selection of the investor;
+ Selecting investors;
+ Evaluating bidding documents;
+ Submitting, assessing, approving and publishing investor selection results;
+ Negotiating, finalizing and concluding a PPP contract, and publishing contract information.
– Based on the specific conditions of each project, the competent authority draws up a shortlist after issuing an investment policy under Point a of Clause 1 of Article 11 in 2020 Vietnam Law on Public-Private Partnership Investment, or after approving the project under Point b of Clause 1 of Article 11 herein.
– Selecting an investor according to the procedures specified in Clause 1 of this Article on the Vietnam National E-Procurement System shall conform to the schedule set by the Minister of Planning and Investment.
– The investor whose project proposal has been accepted shall be entitled to the preferential treatment during the bid evaluation process.
– The selected investor committed to hiring domestic contractors, and using domestic goods, supplies, materials and equipment, shall be given preference during the bid evaluation process.
– The Government shall elaborate on this Article.
Regulations on Investor’s lawful status in PPP
An investor in lawful status must meet the following requirements:
– Having an establishment and operation registration certificate issued by a competent authority of the country or territory in which that investor is operating;
– Carrying out the independent financial accounting regime; ensuring competitive investor selection;
– Not in the dissolution process; not falling into the case of insolvency in accordance with the law on bankruptcy;
– Not subject to any prohibition against participation in PPP investment activities;
– Enterprises with 100% state-owned capital must enter into partnership with private sector investors to participate in the bidding process;
– Investors established under foreign laws must meet market access conditions when participating in the process of selection of investors in projects in the relevant conditional
Assurance of competitive investor selection
Bidding investors must display legal and financial independence from the parties hereunder:
– The party giving counsel on preparation of the pre-feasibility study report or feasibility study report, except for cases where the project is proposed by an investor;
– The party giving counsel on the assessment of the pre-feasibility study report or the feasibility study report;
– The party giving counsel on the formulation and assessment of the invitation for prequalification and the invitation for bid; the evaluation and inspection of prequalification or investor selection results;
– The competent authority, the contract signatory and the bid solicitor.
Domestic or international investor selection
– The selection of domestic investors shall be made in the forms prescribed in Articles 37, 38, 39 and 40 of 2020 Vietnam Law on Public-Private Partnership Investment. Only investors established under Vietnamese law may participate in this selection process.
– The selection of international investors shall be made in the forms prescribed in Articles 37, 38, 39 and 40 of 2020 Vietnam Law on Public-Private Partnership Investment. Both investors established as per foreign law and those established as per Vietnamese law may participate in this selection process.
– The process of selection of international investors may be applied to all PPP projects, except:
+ Projects in the industries and trades without the authorization for market access in which foreign investors make their investment in accordance with the law on investment;
+ Projects subject to the requirements concerning national defence, security and state secrets.
Language used in the investor selection process
The language used in the process of selection of domestic investors shall be Vietnamese; the language used in the process of selection of international investors shall be either English or Vietnamese and English.
Bid guarantee in PPP
– Based on the scale and nature of each project, the value of a bid guarantee shall be specified in the invitation for bid at a determined rate of between 0.5% and -5% of total investment of the project.
– The period of validity of the bid guarantee specified in the invitation for bid shall be equal to the validity period of the bid plus 30 days.
– In case of extension of the validity period of a bid, the bid solicitor must request the investor to give an extension equivalent to the period of validity of the bid guarantee provided that the contents of the submitted bid are not changed. In case the investor refuses to give such extension, the bid will be no longer valid and eliminated.
– In case a partnership participates in a bid, each partner member can provide a separate bid guarantee or can enter into an agreement under which a partner member is responsible for providing the bid guarantee for both that partner member and others joining the partnership. Total value of a bid guarantee shall not be less than the value requested in the invitation for bid. In case where there is a member in the partnership violating the provisions of Clause 6 of this Article, the bid guarantees provided by all member partners shall not be refunded.
– Bid solicitors must return or release bid guarantees to unsuccessfully bidding investors within the time limit specified in the invitation for bid, but not longer than 14 days from the date on which the results of investor selection are approved. With regard to the selected investor, their bid guarantee shall be returned or released after the PPP project enterprise established by the investor has fulfilled their obligations specified in the contract performance security (or performance bon+ as prescribed in Article 48 herein.
In case an investor refuses to give an extension as prescribed in Clause 3 of this Article, the bid solicitor must return or release the bid guarantee to the investor within 14 days from the date on which the bid solicitor has received the written document on refusal of extension.
– Bid guarantees shall not be returned in the following cases:
+ Investors withdraw their bids during the validity of these bids;
+ The investor violates the law on bidding to the extent that such violation leads to the bid cancellation as prescribed at Point dd of Clause 1 of Article 34 herein;
+ The investor has not conducted or refused to negotiate or finalize the contract within 30 days of receipt of the bid-winning notice from the bid solicitor, or has negotiated and finalized the contract but refused to sign the contract, except in force majeure cases;
+ PPP project enterprises established by investors has failed to fulfill their obligations specified in the contract performance security (or performance bon+ as prescribed in Article 48 herein.
Regulations on Bid cancellation in PPP
– Bid cancellation shall occur in the following cases:
+ All applications for prequalification and bidding documents do not meet the requirements of the invitation for prequalification or the invitation for bid;
+ Objectives and scale mentioned in the invitation for prequalification or the invitation for bid change;
+ The invitation for prequalification or the invitation for bid fails to comply with regulations laid down in 2020 Vietnam Law on Public-Private Partnership Investment or other relevant laws to the extent that the selected investor fails to meet the requirements for project implementation;
+ The investor selection process is carried out in breach of regulations laid down in 2020 Vietnam Law on Public-Private Partnership Investment or other relevant laws to the extent that competition between investors is restricted;
+ There is any proof of bribe offer, receipt or brokerage, bid rigging, fraud, abuse of position and power with the intention of illegally interfering in bidding activities to the extent that such acts falsify results of investor selection.
– Organizations and individuals that commit violations to the extent of bid cancellation as prescribed at Points c, d and dd of Clause 1 of this Article shall pay compensation to related parties and shall be subject to actions prescribed by law.
Bid solicitor’s responsibilities during the investor selection process
– Assume responsibility before law and to competent authorities for the investor selection process.
– Ensure faithfulness, objectivity and equality.
– Pay compensation in accordance with laws.
– Keep documents or records confidential.
– Store relevant information provided in law on archives.
Handling of investor selection situations arising in the project execution process
– Handling of investor selection situations arising in the project execution process means any response to cases arising that has not been prescribed clearly and in detail herein.
– Competent authorities and bid solicitors shall be responsible before law for situation handing decisions on the basis of ensuring conformity with the following principles:
+ Such decisions must be issued to ensure competitiveness, fairness, transparency and economic efficiency;
+ Such decisions must be made based on the investment policy decision; the project approval decision; the invitation for prequalification; prequalification applications or bidding documents; prequalification results, investor selection results; the contract that has been signed with the selected investor; actual situation of project implementation.
– The Government shall elaborate on this Article.
Please see more:
- Instructions for exclusive registration of company logos in Vietnam
- Service of changing the legal representative of Vietnamese enterprises
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Frequently asked questions
An investor shall be selected according to the following procedures:
+ Drawing up the shortlist (where applicable);
+ Making preparations for selection of the investor;
+ Selecting investors;
+ Evaluating bidding documents;
+ Submitting, assessing, approving and publishing investor selection results;
+ Negotiating, finalizing and concluding a PPP contract, and publishing contract information.
The investor whose project proposal has been accepted shall be entitled to the preferential treatment during the bid evaluation process.
Yes! Bidding investors must display legal and financial independence from the parties hereunder:
– The party giving counsel on preparation of the pre-feasibility study report or feasibility study report, except for cases where the project is proposed by an investor;
– The party giving counsel on the assessment of the pre-feasibility study report or the feasibility study report;
– The party giving counsel on the formulation and assessment of the invitation for prequalification and the invitation for bid; the evaluation and inspection of prequalification or investor selection results;
– The competent authority, the contract signatory and the bid solicitor.
Conclusion: So the above is General provisions regarding investor selection in PPP in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
