Implementing the PPP Law: what are investors' expectations?

VCN - In the implementation of the Law on Investment under Public-Private Partnership (PPP), issues such as the field and total investment scale of PPP projects; termination of the PPP project contract; the sharing mechanism to increase and decrease revenue; PPP project process; and preferential mechanisms for investors committing to use domestic contractors, goods, materials, and equipment are being paid special attention by domestic and foreign investors.
Infrastructure development at the centre of PPP decree direction Infrastructure development at the centre of PPP decree direction
Good bidding mechanism, ensuring transparency will attract investors Good bidding mechanism, ensuring transparency will attract investors
Ownership, risk-sharing must be clarified in PPP law: experts Ownership, risk-sharing must be clarified in PPP law: experts
0803-1210-11-1939-de-xuat-an-dinh-quy-mo-von-toi-thieu-du-an-ppp1556474606
Many people said that it is necessary to have more capital mobilization options to facilitate the implementation of PPP projects. Photo: S.T

Clarify revenue fraud

According to experts, there are many concerns about the draft Decree detailing and guiding the implementation of the PPP Law that will take effect on January 1, 2021.

According to Phan Vinh Quang, Country Director of USAID’s Learning Evaluation Analysis Project (LEAP III), the draft has basically followed the content of the law. The PPP Law offers a number of incentives and support from the Government, and the draft needs to add specific criteria and procedures for application. Clear procedures should be put in place to guide the competent state agencies and investors to perform all tasks during PPP project implementation in accordance with the PPP Law.

The procedures must be specific, clear and workable. More importantly, they should not create administrative obstacles for both authorities and investors. Additionally, investment opportunities for PPP projects should be promoted by announcing potential projects to investors through a centralized portal system so that they can easily access and update information.

“Regarding regulations on market exploration, in Article 23 of the draft, the feasibility study report does not require market exploration. However, market exploration is very important to determine if private investors are interested in the project or not and if PPP projects are likely to be successful. If the market is not explored, the state authority may pay attention to unattractive projects, and thus qualified investors cannot be chosen. Furthermore, market-driven outputs will boost the commercial viability and bank-guaranteed ability of the project, so this must be a part of the project preparation process,” said Quang.

According to the draft, revenue fraud is defined as fraudulent behavior of revenue collected from users in contracts applying the fee collection mechanism from users or cheating the volume of public products or services provided in contracts that apply the state payment mechanism in order to gain illicit profits. Identification of revenue fraud should only apply to projects with a revenue sharing mechanism. For other cases, the revenue belongs to the project enterprise, so it is not reasonable to investigate the actual revenue.

Investors expect equality

From the perspective of representing PPP investors in transport infrastructure, Tran Chung, Chairman of the Vietnam Association of Road Traffic Investors (VARSI), said when signing a project contract, the state refused to ensure equality with investors. Commitment to finance the project between the state and the bank is still struggling, leading to projects with no capital for implementation. There should be more capital mobilization options to facilitate the implementation of PPP projects.

According to Tran Chung, among the issues assigned to the Government by the National Assembly to guide the PPP Law, the field and scale of total investment in PPP projects, the establishment of a PPP project appraisal committee or termination of the PPP project contract; sharing mechanism to increase and decrease revenue; PPP project process; and preferential mechanisms for investors committing to use domestic contractors, goods, materials, and equipment are being paid special attention by domestic and foreign investors.

These are also important issues that need to be concretized and guided so that the PPP Law can ensure feasibility when it comes into effect at the beginning of next year.

As an enterprise participating in many BOT projects, Dang Xuan Chinh, Head of Legal Department, Deo Ca Group Investment Joint Stock Company, said in fact, when implementing a BOT traffic project, there are many difficulties and problems from the stage of investor selection, project implementation, exploitation and operation because the policy mechanism has not been regulated synchronously or has not been guided in detail.

According to the representative of Deo Ca Group, regarding the contents of the draft Decree detailing and guiding the implementation of a number of articles of the PPP Law, for policy selection applied to consider and implement regulations on investment policy adjustments, PPP projects, to amend PPP project contracts; or apply the revenue reduction sharing mechanism specified in the Investment Law according to the investment mode, we recommend to choose the second option specified in the draft. Determining the "delay" behavior of investors and project enterprises should specify the delay time in the draft Decree or specify in the project contract and consider whether investors can speed up construction to compensate the progress or not.

“Accordingly, is it necessary to specify the time from the due date, the time for taking corrective measures or the time just passed the date specified in the contract is considered delayed and the contracting agency has the right to terminate the contract. This delay must be determined by the parties due to subjective reasons of the investor or the project enterprise, which will serve as a basis to determine that it is a violation of the investor or the project enterprise,” said Chinh.

From the perspective of a legal consultant, Lawyer Le Net, LNT & Partners Law Firm said that in terms of revenue sharing, according to Article 82 of the PPP Law, project enterprises are given risk sharing in some cases, such as project revenue not reaching 75% of the expected revenue in a fiscal year. Therefore, in Appendix IV - Guidance on drafting contracts, the draft decree should additionally state the project enterprise is obliged to minimize losses before requiring public authorities to share risks, and if the actual revenue is too low compared to the expected revenue for three consecutive years, the contracting agency has the right to terminate the contract. In addition, the contract should clearly specify the payment process due to risk sharing, documents that the project enterprise needs to prepare, approval time and authority of the signing agency, if the project's reserve fund cannot afford to pay.

By Xuan Thao/ Ha Thanh

Related News

Proactive in dealing with exchange rate pressure

Proactive in dealing with exchange rate pressure

VCN - Recently, the State of Bank (SBV) withdrew VND 30,000 billion through the T-bills channel, contributing to reducing exchange rate pressure. This is just one of the moves of the monetary policy management agency to stabilize the foreign exchange market, contributing to supporting the macro economy as well as import-export business activities of enterprises.
Meets standards to attract FDI into supporting industries

Meets standards to attract FDI into supporting industries

VCN - When choosing Vietnam as an attractive investment destination in the supporting industry, foreign investors not only expect a vibrant market but also desire a favorable investment environment and smooth administrative procedures.
Bright spots at the beginning of the year

Bright spots at the beginning of the year

VCN - Production and business activities of enterprises have been vibrant since the first days of the year, thanks to which, many economic indicators in the first 2 months of 2024 are positive and positive. This is the fulcrum of trust and motivation for businesses to continue to develop.
Numerous growth drivers, opening opportunities for enterprises

Numerous growth drivers, opening opportunities for enterprises

VCN - That is the appraisal given by experts at the seminar "HUBA Entrepreneurs' Coffee" under the theme: "Vietnam and HCMC's Economy in 2024 - Issues of interest to entrepreneurs," which took place on March 9, organized by the Ho Chi Minh City Business Association (HUBA).

Latest News

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

VCN - In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year. Ms. Nguyen Thi Thu Sac, Chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP) shared with Customs Magazine.

More News

Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Singapore is the largest foreign investor in VN in Q1

Singapore is the largest foreign investor in VN in Q1

The disbursed FDI rose by 7.1 per cent in the first quarter to reach $4.63 billion, a signal that the disbursement will continue the positive trend, the agency said.
Thai Binh boosts investment, trade cooperation with Germany

Thai Binh boosts investment, trade cooperation with Germany

A delegation from the northern province of Thai Binh, led by Deputy Secretary of the provincial Party Committee Nguyen Khac Than, visited several localities and business organisations in Germany from March 25 to 27, in a bid to enhance trade cooperation with and attract direct investment from the European nation.
Lifting obstacles to develop industrial parks

Lifting obstacles to develop industrial parks

VCN - Attracting investment and developing industrial zones (IZs) and economic zones (EZs) is one of the important contents to implement the policy of developing a multi-component, open, attract investment and resources from all economic sectors to develop the country. In addition to the results achieved, there still limitations that need to be removed to draw investments to develop industrial parks and economic zones, including financial problems for industrial parks.
Unlock capital flows and create favorable conditions for investors

Unlock capital flows and create favorable conditions for investors

VCN - Talking with the press, Dr. Ngo Cong Thanh (Photo), Provisional Executive Committee member of the Vietnam Industrial Park Finance Association (VIPFA), said that it is necessary to open up capital flows and create conditions for investors to access key factors. Facilitate production and business factors and innovate investment promotion activities to more effectively develop industrial parks.
More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 domestic and foreign businesses and manufacturers will attend the Vietnam Global Manufacturing Forum 2024 (VGMF2024) to explore investment and business cooperation opportunities.
Connecting with FDI firms helps boost wood exports: insiders

Connecting with FDI firms helps boost wood exports: insiders

Strengthening linkages and cooperation between foreign-invested and domestic enterprises will contribute to promoting the sustainable development of the Vietnamese wood industry, according to insiders.
Doosan Vina exports nearly 2,000 tonnes of modules to US

Doosan Vina exports nearly 2,000 tonnes of modules to US

The Doosan Enerbility Vietnam (Doosan Vina) specialising in heavy industries announced on March 26 that it has just exported a batch of nine modules weighing nearly 2,000 tonnes to the Golden Triangle Polymers company in Texas, the US.
Wood processing enterprises strive to increase the proportion of individually designed goods

Wood processing enterprises strive to increase the proportion of individually designed goods

VCN - Many wood and furniture processing enterprises are promoting investment in design activities, helping to increase the proportion of individually designed products (ODM) in exports, thereby affirming the industry's capacity Vietnamese wood in segments with higher added value.
Read More

Your care

Latest Most read
ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year.
Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Mobile Version