On February 14, 2015, the government of Vietnam enacted Decree No. 15/2015/ND-CP (Decree 15) regulating the investment in the form of public-private partnership (PPP) that took effect on April 10, 2015 and replaced Decree No. 108/2009/ND-CP of the government, dated November 27, 2009, on investment in the forms of BOT (Build – Operate – Transfer), BTO (Build – Transfer – Operate) and BT (Build – Transfer) contracts (as amended by Decree No. 24/2011/ND-CP dated April 5, 2011); and Decision No. 71/2010/QD-TTg of the Prime Minister, dated November 9, 2010, issuing the trial regulations on investment in the PPP form.
Eligible PPP projects: Besides the eligible PPP projects as approved and announced by the authorised state agency, the investor/project enterprise may also propose another potential project if such project fully satisfies the following conditions:
Required capital contribution: An investor is required to contribute equity and raise other capital sources to implement the project as agreed in the project contract. The required equity rate of the investor must not be less than 15 percent of the total investment capital (excluding the state participating portion), or in case of a project over VND1,500 billion (approx. US$69.76 million), a progressive rate (saying 15 percent of the portion up to VND1,500 billion, and 10 percent of the portion over VND1,500 billion). Decree 15 also contains regulations of sources and use of state investment capital for PPP project implementation.
Selection methods of investor: To implement an approved PPP project, investor/project enterprises will be selected through open tendering or direct appointment. The selected investor shall then take part in the negotiation with the authorised state agency to sign the project contract, or in case an investment registration certificate for the project is required, to first sign an investment agreement in order to confirm the contents of the draft project contract as well as rights and obligations of the contracting parties in conducting licensing procedures for obtainment of such investment registration certificate, and the establishment of the project enterprise, if applicable.
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