Vietnam: Determination of starting prices for auction of leasing of right to operate road infrastructure assets

According to Circular No. 86/2019/TT-BTC of the Ministry of Finance of Vietnam, the starting price for auction of leasing of the right to operate the road infrastructure asset is the lowest price an auction of leasing of the right to operate road infrastructure assets begins with.

Specifically, starting prices for auction of leasing of right to operate road infrastructure assets shall be determined as follows:

- The starting price for auction of leasing of the right to operate the road infrastructure asset shall be determined on the basis of the market rent of asset of the same type or of same technical standards and/or quality at the time of leasing and of same leasing purposes;

- The starting price for auction of leasing of the right to operate the road infrastructure asset shall be determined on estimated revenues and expenditures incurred when operating the asset during the leasing period in case the asset of the same type or of same technical standards and/or quality at the time of leasing and of same leasing purposes is not available for comparison;

Moreover, the starting price for auction of leasing of the right to operate road infrastructure asset shall be determined by adopting valuation method or price appraisal methods included in Vietnam’s valuation standard system announced by the Ministry of Finance, provided that at least two (02) different methods for each asset shall be submitted to the Ministry of Transport or provincial People's Committee for consideration and decision.

Based on characteristics and specific supply and market conditions of the asset whose starting price needs to be determined, the Ministry of Transport or provincial People's Committee shall propose and assume responsibility for the selected valuation or price appraisal methods included in Vietnam’s valuation standard system announced by the Ministry of Finance in conformity with the asset and provisions of Decree No. 33/2019/NĐ-CP dated April 23, 2019 of Vietnam’s Government on management, use and operation of road infrastructure assets and guidance of Circular No. 86/2019/TT-BTC.

Moreover, if different valuation or price appraisal methods are adopted, the authority or unit responsible for determination of starting price should evaluate and clearly point out which method will be the main method and which method will be employed to check or verify valuation results, and then carry out analysis, computation and suggestion of the starting price for auction of leasing of right to operate road infrastructure asset.

If the Ministry of Transport or provincial People's Committee decides to employ one valuation or price appraisal method, reasons and actual evidence thereof must be given.

View full text at Circular No. 86/2019/TT-BTC of the Ministry of Finance of Vietnam, effective from January 20, 2020.

Thu Ba

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