Negotiation Process of BOT Contract for the Thermal Power Plant

Progress of BOT Thermal Power Plant Contract Negotiation (Illustrative Image)

Article 11 of Circular 23/2015/TT-BCT specifies the process of negotiating a BOT Thermal Power Plant Contract as follows:

1. Conditions for Negotiation

The negotiation of a BOT Contract shall only proceed when the following conditions are met:

- The FS dossier has been approved by the Ministry of Industry and Trade;- The Ministry of Industry and Trade has selected Legal Counsel;- The starting time for negotiation is consistent with the progress stated in the MOU.

2. Negotiation of the BOT Contract

The negotiation process is divided into 02 rounds, each round consisting of 03 sessions, with each session lasting a maximum of 03 days.

Each round of negotiations shall only conclude once all terms of the contract have been negotiated. Unresolved issues will be carried forward to the next round of negotiations.

Before each round of negotiations, the General Department of Energy sends the draft BOT Contract to the BOT investor.

Within 60 days from the date of receipt of the draft, the BOT investor must send their opinions on the content of the draft BOT Contract to the General Department of Energy. Negotiations shall only commence 30 days after the receipt of the BOT investor's opinions.

At the end of each round of negotiations, the Ministry of Industry and Trade seeks opinions from related Ministries and sectors to form the basis for the next round of negotiations.

The inter-sectoral working group continues to negotiate with the BOT investor regarding the opinions of the Ministries and sectors in order to finalize the draft BOT Contract.

3. Conclusion of Negotiations

Upon the conclusion of 02 rounds of negotiations, the Ministry of Industry and Trade reports to the Prime Minister of the Government of Vietnam the results achieved by the parties and unresolved issues that require the Prime Minister's directives.

The inter-sectoral working group will continue negotiations with the BOT investor as directed by the Prime Minister of the Government of Vietnam. Negotiations will only conclude when both Vietnam and the BOT investor have agreed on all content of the project documents.

Within 10 working days from the conclusion of negotiations, the Ministry of Industry and Trade submits to the Prime Minister of the Government of Vietnam for approval to organize the signing of the investment agreement with the BOT investor.

More details can be found in Circular 23/2015/TT-BCT, issued on July 13, 2015.

Thuy Tram

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