Decision No. 71/2010/QD-TTg dated November 09, 2010 of the Prime Minister promulgating the Regulation on pilot investment in the public-private partnership form
Article 1. To promulgate together with this Decision the Regulation on pilot investment in the public-private partnership form for implementation of a number of projects as a basis for further improving mechanisms, policies and regulations on investment in the public-private partnership form.
Article 2. This Decision takes effect on January 15, 2011.
Article 3. The Minister of Planning and Investment, other ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of People's Committees of provinces or centrally run cities shall implement this Decision. The Ministry of Planning and Investment shall summarize and report any problems arising in the course of implementation of this Decision to the Prime Minister for consideration and decision.
ON PILOT INVESTMENT IN THE PUBLIC-PRIVATE PARTNERSHIP FORM
Article 1. Scope of regulation and subjects of application
1. This Regulation provides for the conditions, procedures and principles to be applied on a pilot basis to a number of investment projects on development of infrastructure or provision of public services in the public-private partnership form in the sectors specified in Article 4 of this Regulation.
2. This Regulation applies to competent state agencies, investors, organizations and individuals involved in the management and implementation of projects on development of infrastructure and provision of public services invested in the public-private partnership form on a pilot basis.
Article 2. Interpretation of terms
In this Regulation, the terms below are construed as follows:
1. Investment in the public-private partnership form means that the State and investor jointly implement projects on development of infrastructure or provision of public services on the basis of project contracts.
2. Project means a project on development of infrastructure or provision of public services invested in the public-private partnership form on a pilot basis.
3. Project proposal means a competent state agency's or an investor's proposal on a project to be invested in the public-private partnership form.
4. State participation portion means a combination of all forms of state participation, including state capital. investment incentives and relevant financial policies which are included in the total investment level (total investment capital) of a project with a view to increasing its feasibility Based on the characteristics of each project, the state participation portion may cover one or more of the above forms. The state participation portion is neither the contributed equity capital in the project enterprise nor associated with the right to receive profits from the project's revenues.
5. State capital under current law includes state budget capital, official development assistance, government bonds, state-guaranteed credit, state development investment credit, development investment capital of state enterprises and other capital sources which give rise to public debts managed by the State.
6. Project list means a list of projects which the Ministry of Planning and Investment summarizes from project proposals of competent stale agencies and submits to the Prime Minister for approval under Article 14 of this Regulation.
7. Project contract means a contract signed between a competent state agency and an investor under which the State franchises investment in and operation of a work or provision of a public service to the investor within a specified period of time. Based on the characteristics of each project, a project contract stipulates commitments on the responsibilities, obligations and powers of the investor and competent state agency and the relationship between the Stale and investor.
8. Project enterprise means an enterprise established by an investor under law to manage and implement the project in accordance with the investment certificate and project contract.
9. Feasibility study report (work construction investment project) means a combination of proposals related to the investment of capital in designing, building, operating and managing an infrastructure facility in the public-private partnership form.
Article 3. Principles of pilot investment in the public-private partnership form
1. Attracting capital sources of the domestic and foreign private sector for infrastructure development and provision of public services.
2. Raising the private sector capital in projects (excluding the state participation portion under Clause 0, Article 2 of this Regulation), including the investor's equity capital, domestic and foreign commercial capital and capita! of other sources without giving rise to public debts.
3. The investor's equity capital in a project must represent at least 30% of the private sector capital in this project. The investor may raise commercial loans and capital of other sources (without government guarantee) which account for up to 70% of the private sector capital in a project.
4. Selecting investors to implement projects on the basis of competitiveness, fairness, transparency, economic efficiency and conformity with Vietnamese law and international practices.
Article 4. Sectors for pilot investment in the public-private partnership form
1. Roads, road bridges, road tunnels and ferry landings.
2. Railways, railway bridges and railway tunnels.
3. Urban transport.
4. Airports, seaports and river ports.
5. Clean water supply systems.
6. Power plants.
7. Healthcare (hospitals).
8. Environment (waste treatment, plants).
9. Other projects on development of infrastructure and provision of public services under the Prime Minister's decisions.
Article 5. Project selection criteria
To be invested in the public-private partnership form, a project must satisfy any of the following criteria:
1. Being important and large-sized and urgently required for economic development under the Prime Minister's Decision No. 412/QD-TTg of April 11.2007.
2. Being capable of refunding capital to the investor from reasonable revenues collected from users.
3. Being capable of tapping technological advantages and management and operation experience and effectively utilizing the financial capacity of the private sector.
4. Other criteria as decided by the Prime Minister.
Article 6. Investment preparation expenses
1. Investment preparation expenses include expenses for making and announcing the project list, making feasibility study reports and selecting investors, and other expenses related to the performance of tasks and exercise of powers by competent state agencies and relevant agencies. Investment preparation expenses come from the state budget and other revenues (if any).
2. Investors selected to implement projects shall pay to the State expenses for making feasibility study reports specified in Clause 1 of this Article.
Article 7. State agencies competent to sign and perform project contracts
1. State agencies competent to sign and perform project contracts include ministries, ministerial-level agencies, government-attached agencies and People's Committees of provinces or centrally run cities (below collectively referred to as ministries, sectors and provincial-level People's Committees).
2. Competent state agency may act as a party to a project contract and shall exercise the rights and perform the obligations and responsibilities as agreed with the investor in the project contract.
3. A competent stale agency shall form a full-time section or designate one of its professional units to act as the focal point in performing jobs related to the project and exercising the rights and performing the obligations stipulated in the project contract. In all circumstances, the competent stale agency shall lake full responsibility for its obligations committed in the project contract.
Article 8. Inter-sector working team
1. An inter-sector working team shall be set up by the Minister of Planning and Investment to assist competent state agencies in formulating and implementing projects.
The inter-sector working team is composed of representatives of the Ministries of Planning and Investment; Finance; Justice; Industry and Trade; Transport; and Construction, the State Bank of Vietnam and other relevant agencies. Members of the inter-sector working team shall assist their ministries, sectors or agencies in giving opinions on the projects in the sectors under the management of their ministries, sectors or agencies.
2. The inter-sector working team is tasked to:
a/ Appoint its members to join the bidding expert group for selecting consultants to make feasibility study reports and the bidding expert group for selecting investors to implement projects;
b/ Take part in appraising feasibility study reports and results of selecting investors to implement projects;
c/ Take part in negotiating and finalizing project contracts;
d/ Assist competent state agencies in settling problems arising during project implementation:
e/ Review experience from pilot projects to improve policies on investment in the public-private partnership form, build capacity and develop human resources for sectors and localities:
f/ Assist competent state agencies in determining slate participation portions in projects:
g/ Perform other tasks under this Regulation and instructions of the Minister of Planning and Investment.
STATE PARTICIPATION PORTION
Article 9. State participation portion
1. The Prime Minister shall decide on state participation portions at the proposal of competent state agencies and appraisal opinions of the Ministry of Planning and Investment.
2. The total stale participation portion must not exceed 30% of the total investment level of a project, except other cases decided by the Prime Minister.
Article 10. State capital within state participation portion
1. Based on the characteristics of each project. state capital may be used to cover part of the project's expenses, build supporting works, pay compensation for, ground clearance and resettlement or perform other jobs when necessary.
2. State capital within the state participation portion in a project shall be planned under the Law on the State Budget and guiding documents.
3. The raising, signing and allocation of concessional credit capital and government- guaranteed loans comply with current law. Government guarantee and the state participation portion shall be considered and decided for each project to ensure its financial feasibility and the State's macro-balancing capacity.
Article 11. Realization of state participation portions
1. Ministries, sectors and relevant agencies shall realize state participation portions in projects under the Prime Minister's decisions under Article 9 of this Regulation.
2. Competent state agencies shall exercise the rights and perform the obligations related to the use of state participation portions under project contracts.
Article 12. Project proposals of competent state agencies
1. Based on approved infrastructure development investment master plans, plans and programs, competent state agencies shall make project proposals according to the contents specified in Clause 2 of this Article.
2. A project proposal covers:
a/ Expected size, capacity, location. construction area, work items and land use needs;
b/ The project's compliance with the sectors and criteria for project selection:
c/ Analysis and preliminary selection of technologies and techniques: conditions for the supply of equipment, materials, energy, services and technical infrastructure: preliminary plan on ground clearance and resettlement (if any): preliminary assessment of the project's impacts on the ecological and social environment;
d/ Set schedule for work const ruction (commencement, completion, takeover test and operation): operation duration, and the investor's management and business methods:
e/ Preliminary determination of goods prices and service charges to be collected from the operation of the work under current regulations;
f/ Conditions and methods for the transfer and receipt of the work;
g/ Expected total investment level; preliminary determination of the state participation portion; and proposals on incentives and the investment security mechanism for the project;
h/ Analysis of the project's overall effectiveness, covering the project's necessity: advantages and socio-economic benefits of its implementation in the public-private partnership form as compared with projects wholly invested with slate capital: and the feasibility of raising investment capital.
Article 13. Investors' project proposals
1. Investors may make their own project proposals in accordance with Clause 2 of Article 14.
2. An investor's project proposal must cover the contents specified in Clause 2. Article 12 of this Regulation.
Article 14. Making of the project list
1. Competent state agencies shall send project proposals to the Ministry of Planning and Investment for summarization, appraisal and submission to the Prime Minister for deciding to include the projects in the project list.
2. Investors shall send project proposals to competent stale agencies based on the latter's functions of state management of the sectors or territories corresponding to the sectors and geographical areas of project implementation, and concurrently to the Ministry of Planning and Investment for monitoring. Project proposals of investors shall be considered and included in the project list under Clause I of this Article.
3. The Ministry of Planning and Investment shall assume the prime responsibility for collecting opinions of ministries, sectors, provincial-level People's Commit tees and agencies related to the projects in order to appraise the project, proposals as a basis for submitting to the Prime Minister for deciding lo include the projects in the project list. Within 30 working days after receiving a request from the Ministry of Planning and Investment, relevant agencies shall give (heir written opinions on the matters falling within the ambit of their functions, tasks and powers. Past this time limit, if failing to give opinions, they will be regarded as having no objection.
Article 15. Announcement of the project list
The project list approved under Article 14 of this Regulation shall be publicized on the Bidding Newspaper, the Planning and Investment Ministry's e-portal. websites of ministries. sectors and provincial-level People's Committees and in other mass media (when necessary).
Article 16. Contents of a feasibility study report
A feasibility study report shall be made in accordance with current law and international practices to ensure that the project is capable of raising investment capital from domestic and international capital markets. Such a report contains:
1. Size, capacity, location, construction area, work items and land use needs;
2. The project's compliance with the sectors and criteria for project selection;
3. Analysis and selection of technologies and techniques: conditions for the supply of equipment, materials, energy, services and technical infrastructure; plan on ground clearance and resettlement; assessment of the project's impacts on the ecological and social environment;
4. Set schedule for work construction (commencement, completion, takeover test and operation): operation duration, and the investor's management and business methods;
5. Total investment;
6. Determination of goods prices and public-service charges to be collected from the operation of the work under current regulations;
7. Conditions and methods for the transfer and receipt of the work;
8. Expected state participation portion in the project; incentives and investment security mechanism for the project:
9. Risk analysis, rights and obligations of the involved parties.
10. Analysis of the project's overall effectiveness, covering the project's necessity: advantages and socio-economic benefits of its implementation in the public-private partnership form as compared with projects wholly invested with state capital: and the feasibility of raising investment capital.
Article 17. Making, appraisal and approval of feasibility study reports
1. Making of feasibility study reports
a/ Based on the project list approved under Article 14 of this Regulation, competent state agencies shall organize bidding under regulations to select consultants for making feasibility study reports.
b/ Within 30 working days after approving the results of selection of consultants lo make feasibility study reports, competent state agencies or their authorized dependent units shall sign and perform contracts with the selected consultants.
2. Appraisal and approval of feasibility study reports
Feasibility study reports shall be appraised and approved under current regulations on investment and construction applicable to state-funded projects.
Article 18. Approval of state participation portions, investment security mechanism and other matters
1. Before approving a feasibility study report under Clause 2 of Article 17 (after appraising a project), the competent state agency shall submit to the Prime Minister the proposed state participation portion, investment security mechanism and other matters which fall beyond the competence of ministries, sectors or localities. A dossier of proposals comprises a written explanation of the above contents, the feasibility study report and other relevant documents.
2. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned ministries and sectors in, appraising state participation portions, investment security mechanisms and other matters which fall beyond the competence of ministries, sectors or localities within 30 working days after receiving competent state agencies' complete dossiers specified in Clause 1 of this Article.
3. The Prime Minister shall decide on state participation portions, investment security mechanisms and other matters which fall beyond the competence of ministries, sectors or localities at the proposal of competent state agencies and based on the appraisal reports of the Ministry of Planning and Investment.
SELECTION OF INVESTORS AND SIGNING OF PROJECT CONTRACTS
Article 19. Bidding to select investors
1. Based on the approved feasibility study report, a competent stale agency shall make a bidding dossier and organize a domestic or international open bidding to select an investor for project implementation. Such bidding must comply with the bidding law and international practices and ensure competitiveness, fairness, transparency and economic efficiency,
2. A bid dossier must state the method of assessing the bid dossier, bidding order and procedures and draft project contract, enclosed with the approved feasibility study report, expected state participation portion in the project and the project's investment security mechanism.
3. A competent state agency shall appraise investor selection results and consult the Ministry of Planning and Investment before approving investor selection results under current regulations.
Article 20. Negotiation, finalization and signing of project contracts
1. Within 30 working days after approving investor selection results under Article 19 of this Regulation, a competent state agency shall coordinate with relevant agencies in negotiating, finalizing and initialing the project contract with the selected investor. Contents of an initialized project contract must conform to the decision approving investor selection results.
2. After a project is granted an investment certificate under Chapter VI of this Regulation. the investor and competent state agency shall officially sign the project contract. In case the investment certificate-granting agency requests modification of the project contract, the competent state agency and investor shall modify relevant contents of the contract before officially signing it.
3. The project's state participation portion and investment security mechanism specified in the project contract must not exceed those indicated in the Prime Minister's approving decision.
Article 21. Contents and form of a project contract
A project contract must stipulate the purposes, scope and contents of the project; and the rights and obligations of the involved parties in designing, building, commercially operating and managing the project work.
Article 22. Right to receive a project
1. The involved parties may agree on the lender's receipt of some or all the rights and obligations of the project enterprise (below referred to as right to receive a project) in case the project enterprise or investor fails to fulfill the obligations stipulated in the project contract or loan contract. After receiving a project, the lender shall fulfill the project enterprise's or investor's all relevant obligations stipulated in the project contract.
2. Conditions and procedures for the lender to receive a project and contents of the his/her/ its right to receive a project must be stipulated in the loan contract, loan security document or another agreement signed between the project enterprise or investor and the lender, and approved by a competent state agency.
Article 23. Transfer of rights and obligations under project contracts
1. The investor may transfer some or all his/ her/its rights and obligations under the project contract.
2. Transfer under Clause I of this Article must be approved by a competent state agency and must not affect the objectives, size, technical standards and implementation schedule of the project and other conditions agreed in the project contract.
Article 24. Modification of project contracts
1. A project contract may be modified as a result of changes in the agreed size, technical standards or total investment capital of the work or due to force majeure circumstances or in other cases stipulated in the project contract.
2. The involved parties shall agree in the project contract conditions for contract modification.
3. Modifications to a project contract must be approved by the investment certificate-granting agency.
Article 25. Term of a project contract
The involved parties shall agree on the term of a project contract as suitable to the sector, size and characteristics of the project, which may be extended or shortened under the conditions stipulated in the contract.
Article 26. Termination of project contracts
1. A project contract's validity will expire upon the expiration of the agreed term or ahead of schedule due to violations committed by any of the parties without taking effective remedies due to force majeure events or in other cases stipulated in the project contract.
2. The involved parties shall agree in the project contract conditions for contract termination and measures to be taken when the contract terminates ahead of schedule in the cases specified in Clause 1 of this Article.
Article 27. Application of foreign law to project contracts and relevant contracts
1. Foreign law may apply to each specific project and referred, to in the bidding dossier.
2. Application of foreign law under Clause 1 of this Article must not contravene Vietnamese law.
Article 28. Security for the project contract performance obligation
1. Measures to secure the project contract performance obligation shall be applied in the form of bank guarantee or other obligation security measures under the civil law.
2. The sum to secure the project contract performance obligation must not be lower than 2% of the project's total investment capital.
3. Security for the project contract performance obligation is valid from the date the project contract is officially signed to the date the work is completed.
GRANT OF INVESTMENT CERTIFICATES AND IMPLEMENTATION OF PROJECTS
Article 29. Investment certificate-granting agency
The Ministry of Planning and Investment shall grant investment certificates to projects to be invested in the public-private partnership form on a pilot basis.
Article 30. Dossiers, order and procedures for verification of dossiers, and grant of investment certificates
1. An investor shall submit 10 dossier sets, including at least one original set. to the investment certificate-granting agency defined in Article 29 of this Regulation for verification of the dossier and grant of an investment certificate.
2. A dossier of application for an investment certificate comprises:
a/ An application for a certificate;
b/ The initialed project contract and contracts related to the project implementation (if any):
c/ The feasibility study report;
d/ The joint-venture contract and project enterprise's charter (if any).
3. Verification shall be conducted on:
a/ Rights and obligations of the involved parties to the project contract:
b/ Project implementation schedule;
c/ Land use needs;
d/ Environmental solutions:
e/ State participation portion, investment incentives and project implementation security mechanism.
4. The investment certificate-granting agency shall verify the dossier and grant an investment certificate to the investor within 45 working days after receiving a valid dossier.
Article 31. Details of an investment certificate
1. An investment certificate contains:
a/ Name and address of the investor;
b/ Name of the project;
c/ Objectives and size of the project:
d/ Project location and land area;
e/ Project's total investment capital;
f/ Project implementation duration and schedule; capital raising schedule under the project contract;
g/ Investment incentives and security mechanism (if any).
2. Payment conditions must be specified in the project contract.
Article 32. Implementation of projects
1. After a project is granted an investment certificate, the investor shall make business registration for establishing a project enterprise to implement the project. Business registration dossiers, order and procedures comply with the Law on Enterprises.
2. The investor shall decide on the managerial apparatus, powers and responsibilities of the project enterprise in conformity with the project contract, the Law on Enterprises, the Investment Law and guiding documents.
3. The rights and obligations of a project enterprise during the implementation of a project shall be agreed as follows:
a/ After its establishment, the project enterprise shall sign a project contract to join the investor in forming a party to the project contract; or.
b/ The competent slate agency, investor and project enterprise shall sign an agreement to permit the project enterprise to receive and exercise the rights and perform the obligations of the investor stipulated in the project contract.
Such agreement constitutes an integral part of the project contract.
4. The parties to a project contract and relevant agencies shall perform the project contract under this Regulation and current law.
Article 33. Selection of contractors for project implementation
1. The project enterprise shall select consultancy, procurement, engineering and other contractors for project implementation. The selection of contractors is regulated by the Bidding Law and must comply with bidding regulations.
2. Contractor selection results must be notified to the competent state agency within 15 working days after a contractor selection decision is issued.
Article 34. Preparation of construction grounds
Provincial-level People's Committees shall clear the ground and complete land allocation or lease procedures for implementation of projects under law and land use conditions specified in project contracts.
Article 35. Technical designing, supervision and management of the construction of project works
1. Based on the feasibility study report and project contract, the project enterprise shall make a technical design and send it to the competent stale agency for supervision and examination. In case the technical design is modified as compared to the feasibility study report, the project enterprise shall submit such modifications to the competent state agency for consideration and decision.
2. The project enterprise may itself manage and supervise or hire an independent consultancy unit to manage and supervise construction and lest work items and the whole work before takeover according to the agreed design in accordance with the construction law and agreements in the project contract.
3. The competent state agency shall supervise and assess the investor's and project enterprise's response to the requirements on planning, objectives, size, technical standards, quality, capital raising and project implementation schedule, environmental protection and other matters as agreed in the project contract.
4. Adjustment of the total investment capital and modification of the technical design and other conditions agreed in the project contract may be considered only in the following cases:
a/ The project is affected by a natural disaster or another force majeure circumstance;
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