The number of projects in the form of public-private partnership is "shrinking"

Dr. Duong Dang Hue

In order to facilitate the private sector's participation in public projects, in 2020, the PPP Law was passed by the National Assembly. However, more than a year after the PPP Law was promulgated and put into practice, the PPP investment model still failed to attract many investors. What do you think about this situation?

As far as I know, the number of PPP investment projects after the effective date of the PPP Law has decreased significantly. The PPP Law is not effective for many reasons. Firstly, there is a mismatch between the large scale of problems in PPP investment practice and the simplicity of the law in this investment field. The most serious limitation of the PPP Law and its guidelines is that it is too brief. In PPP, there are five common forms including: Build - Transfer (BT); Build - lease - transfer (BLT); Build - Operate - Transfer (BOT); Build - transfer - operate BTO) and build - own - operate (BOO).

In PPP Law, there are only eleven articles, mainly related to BOT contracts (as a specific type of PPP project contract), while other project contracts are of little importance. Many vague, non-specific, incomplete and unclear regulations have caused many difficulties for investors and project enterprises in the process of signing as well as implementing project contracts.

There are many groups of social relations that differ in nature and scale in PPP investment projects. Having relationships related to the grant, use and recovery of land and natural resources; having a social relationship related to bank credit; having relationships related to construction, management and operation of project works; related to the use of the state budget; related to the signing and performance of all kinds of contracts arising in the field of PPP investment. The diversity in nature and scale of social relations in this field is the reason why the PPP law must become a massive, multi-disciplinary and multi-characteristic legal field.

In addition to the incompleteness, the current PPP law has many other limitations.

Secondly, the current PPP Law does not clearly state the issue that investors and project enterprises are interested in today, that is, whether the project works they make are owned by them or not if not, what rights they have to this property (the issue of the rights of the investor, the project enterprise to the property is the project work).

This is a crucial issue that the PPP Law must solve, it cannot be ignored because how the interests of investors and project enterprises are protected, depends on determining the nature and content of the project of the rights that the law provides for these subjects.

The law also does not clarify the specific protection mechanism of the state for the right to operate works of investors and project enterprises and there is no appropriate mechanism to encourage investors and project enterprises to implement the auxiliary works along the expressway.

All of the above limitations have made our country's current PPP law ineffective, causing many investors to "falter" when they want to invest in a project in the form of PPP.

In your opinion, what should be done to overcome the limitations of the law on contracts in the field of PPP?

Although the new PPP Law has been in effect for more than a year, the reality shows that many problems have arisen that need to be further studied. Therefore, I propose the National Assembly carry out monitoring of the implementation of the PPP Law in accordance with the provisions of the Law on Promulgation of Legal Documents.

In addition, while the law and guiding decrees and circulars have not been amended and supplemented in a timely manner, it is necessary to issue regulations on PPP model contracts as soon as possible, because this is the biggest limitation.

We may lack Laws and Decrees, but we cannot lack a Model Charter to serve as a basis for parties to sign and perform these types of contracts. Forms of various PPP project contracts, including the BOT project contract form, must be issued by the Government in accordance with the provisions of the PPP Law (Clause 3, Article 47 of the PPP Law), but this task cannot be assigned to the ministries and ministerial-level agencies as prescribed in Decree 35/2021/ND-CP.

In addition, state agencies should now have a plan for the end of 2022 and early 2023 to organize a review of the two-year implementation of the PPP Law, including the implementation of contract regulations in this field.

At the same time, the National Assembly needs to carry out monitoring of the implementation of the PPP Law according to the provisions of Clause 2, Article 162 of the Law on Promulgation of Legal Documents, in order to detect contents that are contrary to the Constitution, laws and documents of the agency superior or unsuitable state agency to promptly suspend the execution, amend, supplement or annul part or all of the document, and at the same time handle it according to its competence or propose the competent authority handle agencies and individuals that have issued illegal documents.

Thank you sir!