Regulations on the classification of PPP contracts in Vietnam

Regulations on the classification of PPP contracts in Vietnam (Internet image)

1. Classification of PPP contracts in Vietnam

Article 45 of the Law on Public – Private Partnership Investment 2020 stipulates the classification of PPP contracts as follows:

-  The group of project contracts applying the mechanism for direct collection of fees from users or underwriting for public products and services, including:

+ BOT contract means the contract under which a PPP project investor or enterprise is assigned the right to build and operate infrastructure works and systems within a predetermined term;

Upon expiry of such term, the PPP project investor or enterprise transfers these works or systems to the State;

+ BTO contract means the contract under which a PPP project investor or enterprise is assigned the right to build infrastructure works and systems;

After the construction is complete, the PPP project investor or enterprise transfers these works or systems to the State, and is accorded the right to operate these works or systems within a specified period of time;

+ BOO contract means the contract under which a PPP project investor or enterprise is assigned the right to build, own and operate infrastructure works and systems within a predetermined term;

Upon expiry of such term, the PPP project investor or enterprise terminates the contract;

+ O&M contract means the contract under which a PPP project investor or enterprise is assigned the right to operate and manage part or the whole of existing infrastructure works and systems within a predetermined term;

Upon expiry of such term, the PPP project investor or enterprise terminates the contract.

- The group of project contracts providing the State mechanism whereby payment is made on the basis of the quality of public products and services, including:

+ BTL contract means the contract under which a PPP project investor or enterprise is assigned the right to build infrastructure works or systems, and transfer them after completion;

Is accorded the right to supply public products and services on the basis of operating and exploiting these works or systems within a predetermined term; the transferee signs a service lease and pays the PPP project investor or enterprise;

+ BLT contract means the contract under which a PPP project investor or enterprise is assigned the right to build infrastructure works or systems, and supply public products and services on the basis of operating and exploiting these works or systems within a specified period of time;

The transferee-to-be signs a service lease and pays the PPP project investor or enterprise; upon expiry of such term, the PPP project investor or enterprise transfers these works or systems to the State.

- Mixed contract is the contract which is the result of combination of those contracts prescribed in Clause 1 and 2 of Article 45 of the Law on Public – Private Partnership Investment 2020.

- With respect to the projects referred to in Point b of Clause 9 of Article 3 herein, the contract providing the mechanism for direct collection of fees from users shall not be applied to them.

2. Competent authorities and authorities signing PPP contracts in Vietnam

Article 5 of the Law on Public – Private Partnership Investment 2020 stipulates the competent authorities and authorities signing PPP contracts as follows:

- Competent authorities, including:

+ Ministries, Ministry-level agencies, governmental agencies, central bodies affiliated to political organizations, Supreme People’s Procuracy, Supreme People’s Court, State Audit, Office of the President, Office of the National Assembly, and central bodies of Vietnam Fatherland Front and socio-political organizations (hereinafter referred to as Ministries and/or central authorities);

+ Provincial People’s Committees;

+ Agencies and organizations set up by the Government and the Prime Minister, and assigned make state budget estimates according to the provisions of law on state budget (hereinafter referred to as other authorities).

- Authorities signing PPP contracts, including:

+ Competent authorities prescribed in clause 1 of Article 5 of the Law on Public – Private Partnership Investment 2020;

+ Entities and units authorized by competent authorities to sign contracts as provided in clause 4 of Article 5 of the Law on Public – Private Partnership Investment 2020.

- In cases where projects fall under the management of multiple competent authorities prescribed in Clause 1 of Article 5 of the Law on Public – Private Partnership Investment 2020, or in case of change of competent authorities, these authorities shall report to the Prime Minister to seek his decision to designate an authority as the competent authority.

- Competent agencies may authorize their directly controlled agencies or units to act as authorities signing contracts to execute PPP projects within their competence.

Ngoc Nhi

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE