Types of PPP Project Contracts and Their Documentation

How many types of PPP project contracts are there and what are the documentation requirements? (illustrative image)

According to Articles 45 and 46 of the Law on Investment in the form of Public-Private Partnership 2020, the specific regulations on 7 types of contracts and their documentation are as follows:

First, regarding project contracts, there are 7 types of contracts in 3 groups as follows:

- Group 1: Group of project contracts applying the mechanism of direct fees from users or purchasing of public products and services, including 4 types of contracts:

- BOT Contract is a contract whereby the investor or the PPP project enterprise is granted the right to construct, operate, and manage the infrastructure works or systems for a certain period; upon expiration, the investor or the PPP project enterprise transfers this infrastructure works or systems back to the State;- BTO Contract is a contract whereby the investor or the PPP project enterprise is granted the right to construct the infrastructure works or systems; after completion, the investor or the PPP project enterprise transfers these works or systems to the State and is granted the right to operate and manage them for a certain period;- BOO Contract is a contract whereby the investor or the PPP project enterprise is granted the right to construct, own, operate, and manage the infrastructure works or systems for a certain period; upon expiration, the investor or the PPP project enterprise terminates the contract;- O&M Contract is a contract whereby the investor or the PPP project enterprise is granted the right to operate and manage part or whole of existing infrastructure works or systems for a certain period; upon expiration, the investor or the PPP project enterprise terminates the contract.

- Group 2: Group of project contracts applying the mechanism of State payment based on the quality of public products and services, consisting of 2 types of contracts:

- BTL Contract is a contract whereby the investor or the PPP project enterprise is granted the right to construct the infrastructure works or systems and transfer them to the State upon completion; they are granted the right to provide public products and services based on operating and exploiting such works or systems for a certain period; the contracting agency hires the services and pays the investor or the PPP project enterprise;- BLT Contract is a contract whereby the investor or the PPP project enterprise is granted the right to construct the infrastructure works or systems and provide public products and services based on operating and exploiting such works or systems for a certain period; the contracting agency hires the services and pays the investor or the PPP project enterprise; upon expiration, the investor or the PPP project enterprise transfers these works or systems back to the State.

Secondly, regarding PPP project contract documentation, the requirements are as follows:

- PPP project contract documentation consists of the following 6 types of documents:

- PPP project contract including general conditions and specific conditions;- Contract appendix (if any);- Negotiation minutes of the contract;- Decision approving investor selection results;- Bidding documents and documents clarifying the bidding documents of the selected investor;- Bidding invitation documents and documents amending and supplementing the bidding invitation documents.

- When there are changes to contract contents, the parties must sign a contract appendix.

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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