Vietnam: Procedures for settlement of capital invested in completed works and infrastructure system of PPP projects

Procedures for settlement of capital invested in completed works and infrastructure system of PPP projects​ (Image from Internet)

1. Rules for settlement of capital invested in completed works and infrastructure system of PPP projects

According to Article 13 of Decree 28/2021/ND-CP of Vietnam's Government, the rules for settlement of capital invested in completed works and infrastructure system of PPP projects are as follows:

- After the PPP project, component projects, sub-projects, independent works and items of the PPP project are completed, the report on settlement of capital invested in the completed project shall be audited for settlement of investment capital in accordance with Article 60 of the PPP Law of Vietnam.

- For the public investment capital provided as assistance in construction of works and infrastructure system prescribed in Point b Clause 5 Article 70 of the PPP Law, the contract-signing authority shall calculate the total value of public investment capital disbursed to the PPP project enterprise, which is the basis for the independent audit organization to settle public investment capital in the PPP project under the PPP project contract.

- Settlement of capital invested in completed works and infrastructure system means determination of lawful costs during the investment process for putting the project into operation under the PPP project contract concluded by the contract-signing authority, the investor, PPP project enterprise as prescribed by law.

- The rules for determination of capital raising costs, cost contingency, cost reduction by the PPP project enterprise according to Clause 2 Article 61 of the PPP Law and other costs incurred shall be specified in the PPP project contract and comply with relevant laws.

- The parties to the PPP project contract shall, on the basis of settled value of capital invested in completed works and infrastructure system and regulations of the PPP project contract, organize the fulfillment of rights and obligations (if arise).

2. Procedures for settlement of capital invested in completed works and infrastructure system of PPP projects

The procedures for settlement of capital invested in completed works and infrastructure system of PPP projects are specified in Article 14 of Decree 28/2021/ND-CP as follows:

- In case the PPP project is executed under a BOT, BOO, O&M or BLT contract, the contract-signing authority and PPP project enterprise shall reach an agreement on selection of a capable and experienced independent audit organization to audit the costs of construction of works and infrastructure system as prescribed in Clause 3 Article 60 of PPP Lawthe PPP Law.

- In case the PPP project is executed under a BTO or BTL contract: After the PPP project is completed, the contract-signing authority shall send a document requesting State Audit of Vietnam (SAV) to audit the costs of construction of works and infrastructure system as prescribed in Clause 3 Article 85 of the PPP Law.

- For mixed contracts: According to the contents of the PPP project contract, the contract-signing authority and PPP project enterprise shall reach an agreement on procedures for settlement of capital invested in construction works and infrastructure system in accordance with Article 60 and Article 85 of the PPP Law and regulations of Decree 28/2021/ND-CP.

- The PPP project enterprise shall prepare and send 01 set of documents for settlement of capital invested in completed works and infrastructure system to the contract-signing authority within the following time limits:

+ If the decision on investment is issued by the National Assembly or the Prime Minister: 09 months;

+ If the decision on investment guidelines is issued by the Minister, head of a central authority, another authority or provincial People’s Council: 06 months;

+ The time limits mentioned in Point a and Point b of this Clause begin when the construction work, infrastructure system is accepted as prescribed by law.

- The contract-signing authority shall consider approving the value of capital invested in completed works and infrastructure system within 01 from the receipt of adequate documents from the PPP project enterprise as prescribed in Article 15 of Decree 28/2021/ND-CP.

Vo Tan Dai

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE