What is PPP project contract in Vietnam? What are the types of PPP project contracts in Vietnam?
What is PPP project contract in Vietnam? What are the types of PPP project contracts in Vietnam?
Based on Clause 16, Article 3 of the Public-Private Partnership Investment Law 2020 (supplemented by Clause 1, Article 3 of the Law on Amendments to the Planning Law, Investment Law, Public-Private Partnership Investment Law, and Bidding Law 2024), a PPP project contract is a written agreement between the contracting agency and the investor or PPP project enterprise regarding the State's concession to the investor or PPP project enterprise to implement the PPP project as stipulated.
A PPP project contract includes the following types of contracts:
- Build - Operate - Transfer (BOT) contract
- Build - Transfer - Operate (BTO) contract
- Build - Own - Operate (BOO) contract
- Operate - Manage (O&M) contract
- Build - Transfer - Lease (BTL) contract
- Build - Lease - Transfer (BLT) contract
- Hybrid contract- Build - Transfer (BT) contract
What is PPP project contract in Vietnam? What are the types of PPP project contracts in Vietnam? (Image from the Internet)
What are the basic contents of a PPP project contract in Vietnam?
Based on Article 47 of the Public-Private Partnership Investment Law 2020, a PPP project contract has the following basic contents:
- Objectives, scale, location, and schedule of the project; construction time of works, infrastructure systems; effective date of the contract; contract duration;
- Scope and requirements regarding technical specifications, technology, quality of works, infrastructure systems, public service products to be provided;
- Total investment; capital structure; financial plans, including financing arrangements; pricing and fees for public service products, including methods and formulas for establishment or adjustment; state capital in the PPP project and corresponding management and usage methods (if any);
- Conditions for land use and other resources; plans for constructing auxiliary works; requirements for compensation, support, resettlement; safety assurance and environmental protection; force majeure cases and handling plans for force majeure situations;
- Responsibilites for performing procedures to obtain permits as per relevant legal regulations; design; construction organization; inspection, supervision, quality management during construction phase; acceptance, investment capital settlement, and confirmation of completion of works and infrastructure systems; supply of primary input materials for production and business activities of the project;
- Responsibilities for operating, conducting business, and managing works and infrastructure systems to ensure continuous and stable provision of public services; conditions, order, and procedures for transferring works and infrastructure systems;
- Assurance for contract performance; ownership rights, management rights, and exploitation rights of assets related to the project; rights and obligations of the investor and PPP project enterprise; agreements on the use of third-party guarantee services for the obligations of the contracting agency;
- Handling plans for situations of significant change as per civil law regulations to continue contract performance; handling measures, compensation, and penalties in case of contract breach by any party;
- Responsibilities of parties concerning information security; reporting policies, providing relevant information, documentation, and explaining contract performance upon request of competent authorities, inspection agencies, auditing, and supervision bodies;
- Principles and conditions for modifying, supplementing, or terminating contracts ahead of time; transfer of rights and obligations of parties; rights of lenders; procedures and rights and obligations of parties upon contract liquidation;
- Incentives, investment guarantees, plans for sharing increases/decreases in revenue, foreign currency balance assurance, and types of insurance (if any);
- Governing law of the contract and dispute resolution mechanisms.
Which agency in Vietnam signs a PPP project contract?
Based on Article 5 of the Public-Private Partnership Investment Law 2020, the authorized agency and agency signing a PPP project contract are defined as follows:
Article 5: Authorized agencies and agencies signing PPP project contracts
[...]
- Agencies signing PPP project contracts include:
a) Authorized agencies as stipulated in Clause 1 of this Article;
b) Agencies or units authorized by competent authorities to sign contracts according to the provisions of Clause 4 of this Article.
[...]
According to the above provisions, the agencies signing PPP project contracts include:
- Ministries, ministerial-level agencies, agencies under the Government of Vietnam, central agencies of political organizations, the Supreme People's Procuracy, the Supreme People's Court, the State Audit Office, the Office of the President, the Office of the National Assembly, central agencies of the Vietnam Fatherland Front, and socio-political organizations
- Provincial-level People's Committees
- Agencies or organizations established by the Government of Vietnam or the Prime Minister of the Government of Vietnam and assigned budget estimates as per state budget laws
- Authorized agencies permitted to delegate to subordinate agencies or units to become the signing agency for PPP project contracts within their jurisdiction.
