INVESTMENT PROCEDURE FOR PUBLIC - PRIVATE PARTNERSHIP (PPP)

INVESTMENT PROCEDURE FOR PUBLIC - PRIVATE PARTNERSHIP (PPP)

Investment under public - private partnership or PPP contract is a popular form of investment in various counties, especially developing countries like Vietnam. However, investment projects in PPP contracts are public infrastructure or public service and subjects of PPP contracts include the Government so the procedure for the issuance of investment registration certificate is different from ordinary procedure. The following article shall provide an in-depth and comprehensive understanding of the aforementioned matter.

I. Legal basis

- Law on investment 2014

- Decree 118/20150/ND-CP on guidelines for some articles of the law on investment

- Decree 15/2015/ND-CP on investment in the form of public - private partnership

II. Scope of consultation

1. What is a PPP contract?

Investment under the form of public - private partnership (PPP in short) is carried out on the basis of investment project contracts between competent agencies and investors, enterprises to construct, renovate, operate, do business, manage infrastructure and provide public service.

Types of investment contracts under public - private partnership (PPP contract)

- Build – Operate – Transfer contract (BOT contract)

- Build – Transfer – Operate contract (BTO contract)

- Build – Transfer contract (BT contract)

- Build – Own – Operate contract (BOO contract)

- Build – Transfer – Lease contract (BTL contract)

- Build – Lease – Transfer contract (BLT contract)

- Operation & Management contract (O&M contract)

- Other similar contracts regulated by the Government

2. Procedure to carry out investment project under the form of public - private partnership (PPP)

Step 1: Propose the investment project

Ministries, provincial People’s Committees and regulatory bodies or investors can propose investment projects

Step 2: Appraise and approve for proposal

Criteria and procedure for appraisal and approval are prescribed in Circular 02/2016/ TT - BKHDT on guidance on preliminary project selection, establishment, appraisal and approval for project proposal, and feasibility study report on investment project under the form of public-private partnership. Appraisal and approval duration is 30 days since the date of receiving valid dossier

Step 3: Announce investment project

Within 07 working days from the day on which the project proposal is approved, projects shall be announced on the National Electronic Procurement System. If a project includes contents relating to the intellectual property rights, trade secret, technology or agreements on mobilizing capital used for a project that needs top secret, then investors shall make a deal with Ministries, regulatory bodies and provincial People’s Committees on the contents of the announcement.

Step 4: Form, appraise and approve for feasibility study reports

- Competent agencies to perform: With projects proposed by Ministries, regulatory bodies, provincial People’s Committees, these agencies shall make a feasibility study report on the project as the basis of the formation of invitation for bid for investor selection and the contract negotiation. With investment proposed by investors, investors shall make a feasibility study report on the basis of written agreement with Ministries, regulatory bodies, provincial People’s Committees

- Competent agencies to appraise: The national appraisal board or Ministers, Heads of ministerial-level agencies, Presidents of the provincial People’s Committees

- Competent agencies to approve: The Prime Minister, Ministers, Heads of ministerial-level agencies, Presidents of the provincial People’s Committees

Step 5: Select investors, conclude of the investment agreement, conclude of project contract

The selection of investor is carried out in the form of open bidding or contractor appointment.

Step 6: Investment registration and project enterprise establishment

Investors carry out procedures for investment registration and project enterprise establishment as prescribed in law on enterprises

Step 7: Project implementation

Step 8: Final settlement and transfer of the project

- Within 06 months from the day on which the project is completed, the investor shall carry out the final settlement of the investment capital used for the project development. The competent agencies shall negotiate with the investors for the selection of an independent auditing organization that has proper capacity and experience to audit the value of investment capital used for the project construction.

- For the project contract that has terms and conditions concerning the transfer of the project, the regulatory agencies and investors shall obtain agreements about the conditions and procedures for project transfer in the project contract.

The aforementioned are the consultations about the procedure for PPP contract. HTC Law Firm is pleased to accompany clients with all legal problems. For the best consultancy service, please get in touch with us.

For more details, please contact:

HTC Vietnam Law Firm

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