The draft PPP Law allows local conditions to choose the appropriate BT mechanism.

Explain why the BT contract in the Draft Law on Investment under the revised Public-Private Partnership (PPP) is different from the provisions in the Capital Law and the Pilot Resolutions.

This afternoon, November 6, the National Assembly will discuss in the Hall the Draft Law amending and supplementing a number of articles of the Law on Planning, the Law on Investment, the Law on Investment under the public-private partnership model and the Law on Bidding.

Previously, when discussing the Draft Law on PPP Amendment in groups, some National Assembly deputies raised the issue that the content of the regulations on BT contracts in the draft Law is different from the regulations in the Law on Capital and the pilot resolutions.

Vingroup Corporation has just sent a document to the Hanoi People's Committee proposing to participate in investing in the construction of Tu Lien Bridge project under the BT contract form.

In the explanatory report sent to the National Assembly, the Ministry of Planning and Investment clarified: "The provisions of the draft Law are designed to be applied nationwide and also take into account the specific requirements and conditions in localities."

Currently, the National Assembly has allowed 3 localities to pilot the implementation of BT contracts, including Ho Chi Minh City, Hanoi and Nghe An. The implementation methods of BT contracts in these 3 localities are not the same.

Ho Chi Minh City is allowed to apply the BT mechanism of payment in cash (using the City budget), with no restrictions on the applicable fields.

Nghe An applies the BT mechanism of payment in cash (using the state budget or money collected from public asset auctions, land use rights auctions) for a number of fields (transportation, urban technical infrastructure, lighting systems, decorative electricity; parking lots; drainage and wastewater treatment; environmental pollution treatment).

Hanoi is allowed to apply the BT mechanism of payment using the city budget (applied to projects applying high, advanced, clean technology) or payment using land funds.

Obviously, the Capital Law and specific Resolutions are built to meet specific requirements and conditions, suitable to the specific context of each locality.

The Draft Law is stipulating the continued application of BT contracts with payment in cash and payment in land funds, adding a type of BT contract that does not require payment to apply to infrastructure works and public service provision that investors propose to invest in and build and transfer to the State without requiring payment of construction investment costs.

To ensure comprehensive innovation and overcome the shortcomings of the implementation of BT contracts in the previous period, the Ministry of Planning and Investment said that the Government proposed to complete regulations on BT contracts paid by the state budget and land funds according to 5 principles.

Firstly, the total investment of BT projects must be determined accurately to avoid inflating the value of the project;

Second, organize bidding to select investors, not apply designated bidding;

Third, the payment mechanism for investors (in land or cash) must be specifically, clearly and transparently determined right from the project establishment stage;

Fourth, the contract management mechanism must be strictly ensured to avoid late payment interest leading to an increase in total investment;

Fifth, there is a strict monitoring mechanism to ensure the quality of the project when it is transferred to the state.

For localities implementing the Law on the Capital and specific Resolutions, the draft Law has stipulated transitional handling, allowing the People's Councils at the provincial and municipal levels to consider and choose to apply specific regulations or regulations of the Law to ensure the consistency and synchronization of the legal system and avoid disruption to project implementation in localities.

In particular, the Ministry also clearly explained that the regulations on the type of BT contract paid by land fund have been completed to overcome the shortcomings of the previous stage according to the principles. Including, the total investment of the BT project must be accurately determined, avoiding inflated project value; organizing bidding to select investors, not applying designated bidding; the location, area, and expected value of the land fund for payment must be specifically, clearly, and transparently determined right from the project establishment stage; the contract management mechanism must be strictly ensured, avoiding late payment interest leading to an increase in the total investment; there must be a strict monitoring mechanism, ensuring the quality of the project when transferred to the state.

Regarding the proposal to review and resolve problems with transitional BT projects and summarize the BT model being piloted in some localities before allowing the continued application of this type of contract, the Ministry of Planning and Investment said that if we wait for the results of the handling and summary of the BT model being piloted in some localities, we may miss the opportunity to develop and utilize private resources in localities where special mechanisms have not been applied.

Previously, in Document No. 675/TTr-CP dated October 18, 2024, the Government reported on the implementation process, results achieved, and existing problems and shortcomings of the BT contract type.

The Government assessed that although there were still some shortcomings, the BT projects implemented in the previous period still made certain contributions to the completion of the local infrastructure system, and the corresponding projects also contributed to improving the infrastructure of housing and services. Therefore, if this model is comprehensively innovated in the direction of strict management, the shortcomings will be overcome to the maximum extent.

For transitional BT projects, the Government will continue to direct the review and removal of obstacles in accordance with the direction of the Politburo and the requirements of the National Assembly Standing Committee.

Since 1997, the legal regulations on BT contracts have changed a lot, especially regarding payment methods.

Specifically, before 2014, both forms of payment in cash and in land funds were applied according to Decree 108/2009/ND-CP.

Since 2014, stop making cash payments according to Resolution 01 of the Government and Decree 15/2015/ND-CP;

Since 2018, the form of payment by land fund according to the parity mechanism has been legalized in the Law on Management and Use of Public Assets;

From 2021, BT contracts will not apply to new investment projects.

The suspension of BT projects under the PPP Law stems from the shortcomings of implementing this type of contract, such as: some projects do not have appropriate and unnecessary investment objectives; the value of BT projects is determined incorrectly, most projects have higher investment rates than projects using public investment capital; the selection of investors is mainly carried out through the form of non-competitive bidding; supervision is neglected, leading to unsatisfactory project quality...

Although there are still some shortcomings, according to the assessment of many ministries, branches and localities, BT projects implemented before the PPP Law took effect still made certain contributions to the completion of the infrastructure system in localities, mobilizing resources from the private sector, helping to reduce pressure on public investment capital. In addition, the reciprocal projects with investment payments also contributed significantly to the improvement of infrastructure in housing, services, the formation of new urban areas, new residential areas, etc.

Therefore, in the submission to the National Assembly on this draft Law, the Government emphasized that if this model is carefully studied for comprehensive innovation and to overcome the shortcomings of the previous stage, it can still be effective.

Regarding regulations on BT contract types, the Economic Committee and a number of National Assembly deputies proposed to only stipulate in this Law the principles for implementing BT contracts and assign the Government to specify in detail the procedures, order, and payment mechanisms.
The Ministry of Planning and Investment said it would accept this opinion and propose to revise the draft Law in the direction of regulating the implementation and payment mechanism for investors implementing BT contracts (using the state budget and land fund) to ensure that the Government has sufficient legal basis to specify in detail the procedures for implementing BT projects.

Source: https://baodautu.vn/du-thao-luat-ppp-cho-phep-tuy-dieu-kien-dia-phuong-de-chon-co-che-bt-phu-hop-d229303.html