When talking about public investment, a PPP contract is a common solution; especially in a time where the Vietnamese government is constantly making changes to attract foreign investment. Therefore, in this article, LSX will look into the Investment procedure in the form of PPP contracts under Vietnamese Law.
- 2020 Investment Law
- Decree 118/2015/ND-CP
- Circular 02/2016/TT-BKHDT
Competent state agency to sign the PPP contracts
Accordingly, ministries, branches, and provincial-level People’s Committees shall sign project contracts within their respective functions, tasks, and powers. In fact, these agencies may authorize contract signing for organizations under ministries, ministerial-level agencies, specialized agencies under provincial-level People’s Committees, and district-level People’s Committees.
Procedure of implementing investment project under PPP contracts
Step 1: Project investment proposal
Firstly, Ministries, branches, provincial People’s Committees, or investors are responsible for proposing investment projects.
Step 2: Project appraisal and approval
When appraise and approve the project, Circular 02/2016/TT-BKHDT regulates the criteria and procedures for project appraisal and approval; which guiding preliminary project selection, formulation, appraisal, and approval of project proposals and reporting feasibility study report on investment projects in the form of public-private partnership.
Hence the regulation, the time limit for assessment and approval is 30 days from the date of receipt of complete dossiers.
Step 3: Project announcement
Thirdly, within 7 days after the project is approved, the project will be announced on the national bidding network.
Besides, for project proposals with contents around intellectual property rights, trade secrets, technology, or agreements to raise capital for the implementation of confidential projects; the investor shall reach an agreement with the Ministries and Provincial-level People’s Committee on the announcing content.
Step 4: Preparation, appraisal and approval of feasibility study reports
- Executing subject: Firstly, for projects proposed by ministries, branches or provincial-level People’s Committees; these state agencies shall make a feasibility study report of the project as a basis for making bidding documents for investor selection and negotiate project contracts. Secondly, with the project proposed by the investor; the investor shall make a feasibility study report on the basis of a written agreement with ministries, branches and provincial-level People’s Committees.
- Appraisal subjects: Thus, the appraisal subjects might be the State Appraisal Council or PPP focal points are chaired by the Minister, the Head of the ministerial-level agency; and the President of the Provincial People’s Committee.
- Approved subject: Lastly, the Prime Minister, Ministers, Heads of ministerial-level agencies, Presidents of the People’s Committees of provinces are the subjects of approval.
Step 5: Investor selection, investment agreement signing, project contract signing
Accordingly, there are 2 ways of investor selections, which include:
- Open bidding
- Appoint contractors
Step 6: Investment registration and establishment of a project enterprise
Subsequently, investors carry out procedures to apply for an Investment Registration Certificate and establish a project enterprise to implement the project by the law on enterprises.
Step 7: Project implementation
Step 8: Finalization and project handover
Finally, under 06 months from the date of completion of the project work; the investor shall make the final settlement of the work construction investment capital. The audit of the value of investment capital is carried out by an independent auditing organization; selected by a competent state agency and the investor.
Hope this article “Investment procedure in the form of PPP contracts under Vietnamese Law” could help you solve your problem. If you have any questions, please contact Lawyer X for quick and best legal services: 0833102102.
PPP contract is an abbreviation of an investment contract in the form of corporate partnership thus Clause 8 Article 3 of the Law on Investment 2014. Basically, this is the type of contract signed between a competent state agency and an investor, project enterprise. When investing in this form, investors sign contracts with competent state agencies and Vietnamese investors to implement, manage and operate the project.
Foreign investment means that organizations and individuals of one country bring capital in different forms into another country to conduct business activities for profit. Foreign investment is made in the form of direct investment or indirect investment.
Accordingly, there are 7 types of contracts in the form of PPP contracts, including:
– (BOT) Build-Operate-Transfer Contract
– (BTO) Build-Transfer-Operate Contract
– (BT) Build-Transfer Contract
– (BOO) Build – Own – Operate Contract
– (BTL) Build – Transfer – Lease Contract
– (BTL) Build – Lease – Transfer Contract
– (O&M) Business-Management Contract