According to the law in Vietnam, what is the PPP project contract? What are types of PPP project contract in Vietnam?

According to the law in Vietnam, what is the PPP project contract?

PPP project contract means a written agreement between a contracting authority and a PPP project investor or enterprise on the State's concession to that investor or PPP project enterprise to execute a PPP project according to provisions of this Law, including the following types of contracts:

- Build – Operate – Transfer contract (hereinafter referred to as BOT contract);

- Build - Transfer - Operate contract (hereinafter referred to as BTO contract);

- Build - Own - Operate contract (hereinafter referred to as BOO contract);

- Operate - Manage contract (hereinafter referred to as O&M contract);

- Build - Transfer - Lease contract (hereinafter referred to as BTL contract);

- Build - Lease - Transfer contract (hereinafter referred to as BLT contract);

- Mixed contract prescribed in Clause 3 of Article 45 of this Law.

According to the law in Vietnam, what is the PPP project contract? What are types of PPP project contract in Vietnam? - Image from Internet

What are regulations on the Build - Transfer contract (BT contract) in Vietnam?

Previously, in Decree 63/2018/ND-CP, the Build-Transfer Contract (referred to as BT contract) is a contract signed between the competent state agency and the investor or project enterprise (if any) to construct infrastructure projects. After completing the project, the investor transfers the project to the competent state agency. The investor is compensated with land funds, office premises, infrastructure assets, or the right to operate and exploit the project or provide services for the implementation of other projects.

Cease the implementation of new projects applying the Build-Transfer contract from 2021 in Vietnam

According to the Law on Public – Private Partnership Investment in 2020, from January 1, 2021, the transition of Build - Transfer (BT) contracts shall be as follows:

- Projects where bidding documents or requests for proposal have not been issued yet shall be suspended; in case where bidding documents or requests for proposal have already been issued, they shall be continued based on the invitations for bid, requests for proposals and legislative regulations at the time of issuance of these invitations for bid or requests for proposal;

- With regard to projects where investor selection results are obtained before the effective date of this Law, the contracting authority shall negotiate and sign the contract, based on the results of investor selection, bidding documents, proposals, invitations for bid and requests for proposal, and legislative regulations valid at the time of issuance of invitations for bid or requests for proposal;

- For projects which have signed contracts before the effective date of this Law, project execution and payment under regulations of BT contracts and legislative regulations valid at the time of contract conclusion shall be continued;

- Implementation of new BT projects shall be disapproved.

Therefore, from 2021, new projects applying the Build-Transfer contract will cease to be implemented, and the Public-Private Partnership (PPP) contract will no longer include the Build-Transfer contract.

Note: Implementation of the projects under BT contracts that have not been approved for investment policy yet shall be suspended from August 15, 2020.

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