From 2021, How Is the Selection of Investors for Implementing PPP Projects Regulated?

From 2021, how is the selection of investors to implement PPP projects regulated (Illustration)

Public-Private Partnership Investment Law 2020 provides the main contents regarding the selection of investors as follows:

Firstly, the process of selecting investors must be followed as below:

- Selection of the shortlist (if applicable);- Preparation for investor selection;- Organizing the investor selection;- Evaluation of bidding documents;- Submission, appraisal, approval, and disclosure of investor selection results;- Negotiation, finalization, signing of the PPP project contract, disclosure of contract information.

- On the national bidding network system, this process is carried out according to a roadmap specified by the Minister of Planning and Investment.

- Accompanied by the following notes:

- Depending on the specific conditions of each project, the competent authority shall select the shortlist after deciding on the investment policy as prescribed in point a clause 1 Article 11 of this Law or after approving the project as prescribed in point b clause 1 Article 11 of this Law.- Investors with accepted project proposals are given preferential treatment when evaluating bidding documents.- Investors committed to using domestic contractors, goods, materials, and equipment are given preferential treatment when evaluating bidding documents.

Secondly, the valid status of investors must meet the following 6 conditions:

- Having registration for establishment and operation granted by the competent authority of the country or territory where the investor is operating;- Independent financial accounting; ensuring competition in investor selection;- Not in the process of dissolution; not in the case of insolvency as stipulated by the bankruptcy law;- Not during the period of being prohibited from participating in PPP investment activities;- State-owned enterprises holding 100% charter capital must form a consortium with private sector investors to participate in bidding;- Foreign investors must meet market access conditions when participating in investor selection for projects in industries and trades with conditional market access as prescribed by investment law.

Thirdly, ensuring competition in investor selection where participating investors must be legally and financially independent from the following parties:

- Consultants preparing pre-feasibility study reports, feasibility study reports, except for projects proposed by investors;- Consultants appraising pre-feasibility study reports, feasibility study reports;- Consultants preparing and appraising pre-qualification documents, bidding documents; evaluating and appraising pre-qualification results, investor selection results;- Competent authorities, contract-signing authorities, and bidding solicitors.

Fourthly, the selection of domestic and international investors is specifically regulated as follows:

- The selection of domestic investors is carried out through the forms stipulated in Articles 37, 38, 39, and 40 of this Law, in which only investors established under Vietnamese law are allowed to participate.- The selection of international investors is carried out through the forms stipulated in Articles 37, 38, 39, and 40 of this Law, in which both investors established under foreign law and those established under Vietnamese law are allowed to participate.- The selection of international investors applies to all PPP projects, except in the following cases:- Projects are in industries and trades not open to foreign market access per investment law;- Projects need to ensure requirements for national defense, security, and protection of state secrets.

Note: The language used in investor selection is Vietnamese for domestic investor selection; English or both Vietnamese and English for international investor selection.

More details can be found in Public-Private Partnership Investment Law 2020, effective from January 1, 2021.

Thanh Thao

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