The 2020 Law on Public-Private Partnership (“The 2020 PPP Law”), enacted by the National Assembly on 18 June 2020 and in force as of 01 January 2021, has unified the current regulations governing PPP in many previously issued Laws and Decrees. However, despite recent growth in Viet Nam’s PPP sector, it remains relatively new. Therefore, although legal regulations governing the sector are constantly evolving, they have not kept pace with reality. Moreover, PPP projects often involve large-scale investments with prolonged time and complex legal relationships among diverse entities. Consequently, law enforcement for PPP projects has lately encountered several difficulties, obstacles, and inadequacies.
One of the reasons leading to that status quo is the lack of specific regulations for the 2020 PPP Law’s and the lack of PPP model contracts are causing difficulties for ministries, branches, and localities in the research, preparation, and implementation of PPP projects. In addition, the lack of a model PPP (a component included in the bidding documents for the selection of PPP project investors) has failed to ensure fair competition principles.
Specifically, the development and issuance of Model PPP Contracts, including the Model BOT Contract, BLT Contract and O&M Contract also play an important role in establishing a unified and standardized system of criteria and standards for PPP project contracts. This is in accordance with legal regulations, current legal standards, and practical norms, thereby contributing to ensuring fair competition principles in selecting investors to implement PPP projects, shortening negotiation time and signing contracts for contracting authorities and private investors or contractors. But so far, apart from the Ministry of Transport, which has issued the Model BOT Contract, the remaining ministries have not yet agreed on the focal agency to draft and approve the Model BLT and O&M Contracts
The Review Report on Model Contract for BOT, BLT, and O&M Projects in Vietnam aims to review and evaluate the current PPP legislation and the drafts of model contracts in BOT, BLT, and O&M projects regarding transport infrastructure, solid waste, and waste-water treatment. This report is conducted based on a review of the legal system and PPP practices in Viet Nam and other countries. On that basis, the Report is to make proposals and recommendations on supplementing and detailing model provisions of the Model BOT Contract during the process of drafting, negotiating, and signing of BOT Contracts; simultaneously give recommendations on requirements to draft the Model BLT Contract and Model O&M Contract in the future.
The review report was conducted as a part of “Technical assistance for capacity and resilience enhancement and sustainable development” – coordination between the Vietnam International Arbitration Centre (VIAC) and the Vietnam Chamber of Commerce and Industry (VCCI) with technical support from the United States Agency for International Development (USAID). The content of the report includes:
The legal framework for PPP contracts, including: the definition of PPP contracts; fundamental principles governing PPP contracts; classification of PPP contracts; basic term of PPP contracts; the process of issuing and using model PPP contracts from the practice in Viet Nam and other countries in the world;
Relevant legal regulations and the review of Model BOT Contract issued by the Ministry of Transportation and recommendations to supplement, detail, and complete the groups of provisions in a model BOT contract during the drafting, negotiating and signing of BOT Contracts;