Selection of PPP projects, preparation of reports, and evaluation of reports by competent authorities

Selecting PPP projects, preparing reports, appraising reports of competent authorities (illustrative image)

Under Article 14 and Article 15 of the Law on Investment in the form of Public-Private Partnership 2020, the following contents are stipulated:

Article 14: Regarding the selection of projects and the preparation of pre-feasibility study reports for PPP projects, including:

1. Firstly, the conditions for selecting projects for investment in the form of PPP include the following contents:

- The necessity of investment;- Belonging to the fields specified in Clause 1 Article 4 of the Law on Investment in the form of Public-Private Partnership and meeting the minimum total investment scale stipulated in Clause 2 Article 4 of the Law on Investment in the form of Public-Private Partnership.- Not overlapping with PPP projects that have been approved for investment policy or approved projects;- Having advantages compared to other forms of investment;- The ability to allocate state capital in case there is a need to use state capital.

2. Secondly, the selection of projects and the preparation of reports must adhere to the bases for report preparation, including:

- The national socio-economic development strategy and plan, and relevant planning as prescribed by law on planning;- Provisions of this Law, other relevant laws on the investment field of the project;- Other related legal documents.

3. Thirdly, regarding the pre-feasibility study report:

- The necessity of investment; the advantages of investment in the form of PPP compared to other forms of investment; the impact of implementing the project in the form of PPP on the community and residents within the project scope;- Objectives; expected scale, location, implementation time of the project, land, and other resource usage needs;- Preliminary design plan as prescribed by construction law for projects with construction components, applicable laws for projects without construction components; preliminary explanation of technical and technological plans; preliminary division of component projects (if any);- Preliminary evaluation of the project's socio-economic effectiveness; preliminary environmental impact assessment in accordance with environmental protection law applicable to public investment projects;- Preliminary total investment cost; preliminary evaluation of the project's financial plan; anticipated use of state capital in the project (if any); anticipated payment method to investors for projects applying BTL contracts, BLT contracts;- Anticipated type of PPP project contract; forms of incentives, investment guarantees; revenue reduction sharing mechanism.

Article 15 regarding the appraisal of pre-feasibility study reports for PPP projects is stipulated as follows:

Regarding the dossier for appraising pre-feasibility study reports:

- Request for appraisal in writing;- Draft proposal for a decision on investment policy;- Pre-feasibility study report;- Other related legal documents of the project.

Regarding the appraisal of pre-feasibility study reports:

- Compliance with the project selection conditions for investment in the form of PPP as specified in Clause 1 Article 14 of the Law on Investment in the form of Public-Private Partnership;- Compliance with the bases for preparing the pre-feasibility study report stipulated in Clause 2 Article 14 of the Law on Investment in the form of Public-Private Partnership;- Investment effectiveness; the ability to recover capital for the investor;- Suitability of the type of PPP project contract;- Revenue reduction sharing mechanism;- Capital sources and the capability of balancing funds for PPP projects using state capital.

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

Thanh Thao

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