PPP Law 2020: 12 basic contents of PPP contract in Vietnam

PPP Law 2020: 12 basic contents of PPP contract in Vietnam (Internet image)

Article 47 of the Law on Public – Private Partnership Investment 2020 clearly states that PPP contract in Vietnam shall contain the following information:

1 - Objectives, scale, location and schedule of implementation of a project; time and duration of a infrastructure work or system; the effective date of the contract; contract term;

2 - Scope of and requirements concerning engineering, technology and quality of the infrastructure work or system, supplied public products or services;

3 - Total investment; capital structure; financial plan, including the financial arrangement plan; public product and service prices and charges, including methods and formulas for setting or adjusting them; state capital invested in a PPP project and the corresponding form of management and use (if any);

4 - Conditions for use of land and other natural resources; plans to organize the construction of auxiliary works; requirements for compensation, support and resettlement; assurance of safety and environmental protection; force majeure cases and plans for response to force majeure events;

5 - Responsibilities for carrying out licensing procedures according to regulations of relevant laws; design; organization of construction; quality inspection, supervision and management at the construction phase; acceptance testing, settlement of investment capital and confirmation of the completion of infrastructure works and systems; provision of main input materials used for production and business activities of the project;

6 - Responsibilities for the operation and commercial use of infrastructure works and systems so that public products and services are provided in a continuous and stable manner; conditions, order and procedures for transfer of infrastructure works and systems;

7 - Performance security; rights of ownership, management, and exploitation of assets related to the project; rights and obligations of the PPP project investor or enterprise; the agreement on use of a third-party guarantee service with respect to the obligations of the contract signatory;

8 - Plans for response to the circumstances substantially changing in accordance with civil law to continue to perform the contract; response, compensation and punitive measures in case one of the contracting parties breaches the contract;

9 - Responsibilities of parties related to information security; reporting regime; provision of information, related documents and explanation about the contract performance at the request of competent authorities, inspection, examination, auditing, and supervising authorities;

10 - Principles and conditions for amendment, supplementation and termination of the contract before its expiry; assignment of rights and obligations of the parties; the lender's rights; procedures, rights and obligations of the parties upon contract discharge;

11 - Investment incentives, guarantees, plans to share the revenue increase and decrease, assurance of balancing of foreign currencies, types of insurance (if any);

12 - Laws governing the contract and dispute resolution mechanism.

Note:  PPP contract in Vietnam must specify rights and obligations of the contracting authority, the investor and the PPP project enterprise.

Nguyen Trinh

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