Lawyer in Vietnam Oliver Massmann New Decree on Public - Private Partnership

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New Decree on Public-Private Partnership
State Bank of Vietnam Workshop
04 January 2017, Hanoi
OLIVER MASSMANN- PARTNER
DUANE MORRIS VIETNAM LLC
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TOPICS
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1. General Introduction of the new
Decree
2. Positive Changes
3. Specific Issues
4. Discussion

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PART I: GENERAL
INTRODUCTION OF THE NEW
DECREE
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General Introduction
• On 14 February 2015 the Government issued Decree No.
15/2015/ND-CP on Public-Private Partnership Investment Form
(PPP Decree)
• PPP Decree has come into effect since 10 April 2015
• It replaced two previous regulations:
 Decree No. 108/2009/ND-CP of the Government dated 27 November 2009
on BOT, BTO and BT investment forms;
 Decision No. 71/2010/QD-TTG dated 9 November 2010 of the Prime
Minister on pilot PPP investment regulations.
• PPP Decree establishes a legal framework for both the PPP
and the BOT/BTO/BT project regimes.
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Who in PPP? How to set up?
• Investor:
 Project enterprise
• Authorized state agency:
 Ministry
 Provincial People’s Committee
• Guaranteeing body:
 Party appointed by Prime Minister
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General PPP Process
Screening
Project
Proposal
Feasibility
Study
Bidding Contract
Implement
ation
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PART II: POSITIVE CHANGES
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Broader Application
 PPP Decree removes the requirement that a PPP project
must be an important and large – scale project;
 New sectors: agriculture, education, culture, sports,
construction of Government workplaces, social
housing and cemeteries, science and technology
facilities, economic and industrial zones, public sector
services.
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Contract forms:
 4 more forms of PPP investment: BTL, BLT, BOO
and OM
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Form of payment Contract type
User Fee BOT, BTO, BOO
Availability payment BTL, BLT
Service Fee OMC
Project swap BT

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Private Sector Investment Capital
• Old regulations: investment capital by
investors: at least 30% of the investment
capital
• PPP Decree: at least 15% of investment
capital up to VND 1,500 billion plus at least
10% of the portion of investment capital
exceeding VND 1,500 billion
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Government Contribution
• Old regulations: limit the state capital
contribution to no more than 49% for BOT
and 30% for PPP
• PPP Decree: No limit
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Selection of Investors
• Old regulations: competitive tendering was
always required for the selection of investors
for PPP.
• PPP Decree: selection by open tender or
direct appointment
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Unsolicited projects
• Investors now may
propose projects that are
not listed on the list of
projects announced by the
authorized state agencies,
as long as they satisfy all
the eligibility conditions
of PPP projects.
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Step – in rights
• Old regulations:
lending banks’ step in
right must be subject
to approval from
relevant competent
governmental
authority
• PPP Decree: no
approval needed.
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Selection of Foreign Laws
• Old PPP Pilot Decision:
foreign law to be applied
on a case by case basis
• PPP Decree: permit the
parties to select foreign
laws in all cases.
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PART III: SPECIFIC ISSUES
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Foreign Currency Convertibility
• No clear commitment on 100% foreign
currency convertibility. The amount of
foreign currency guaranteed to be convertible
will be determined on a case by case basis.
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Land
• PPP project companies: land rent exemption
or reduction.
• Land Law: no mortgage of land use rights if
they are exempted from paying rent on the
land.
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Negotiation Time
• No time limit for
negotiation and
signing of project
contracts
risk of lengthy
negotiations
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Thank you very much!
Oliver Massmann
OMassmann@duanemorris.com
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Duane Morris Vietnam LLC