Vietnam: What is a PPP contract?

A PPP contract is an investment contract in the form of Public-Private Partnerships (PPP). This is a type of contract signed between a competent state agency and an investor or project enterprise to implement investment projects to build new or renovate, upgrade, expand, manage and operate infrastructure works or provide public services.

PPP contracts have a number of features such as:

- One of the contracting parties is a state agency;

- Contracts related to infrastructure and public services.

According to Decree No. 15/2015/NĐ-CP of Vietnam’s Government, types of PPP contracts include: BOT, BTO, BOO, BT, etc. To be specific:

- BOT: Build – Operate – Transfer contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall be entitled to operate it for a specified period of time; eventually, the investor shall transfer it to the regulatory agency.

- BTO: Build – Transfer – Operate contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall transfer it to the regulatory agency, and shall be entitled to operate it for an agreed period of time.

- BT: Build – Transfer contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall transfer it to the regulatory agency, and then the investor will be allotted a land parcel used for carrying out another project under the provisions of Clause 3 Article 14 and Clause 3 Article 43 of Decree No. 15/2015/NĐ-CP.

- BOO: Build – Own – Operate contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall take ownership of this project and have the right to operate it for a specified period of time.

- BTL: Build – Transfer – Lease contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall transfer it to the regulatory agency and shall be entitled to provide services on the basis of operation of such project for a specified period of time; the regulatory agency shall have the authority to lease and make payment for the investor’s services according to the regulation in Clause 2 Article 14 of Decree No. 15/2015/NĐ-CP.

- BLT: Build – Lease – Transfer contract: A type of contract to build an infrastructure project between a regulatory agency and an investor; after completing the construction, the investor shall have the right to provide services on the basis of operation of such projector a specified period of time; the regulatory agency shall have the authority to lease and make payment for the investor’s services according to the regulation in Clause 2 Article 14 of Decree No. 15/2015/NĐ-CP; when the lease term expires, such project shall be transferred to the regulatory agency.

- O&M: Operation & Management contract: A type of contract to operate the project between a regulatory agency and an investor for a specified period of time.

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