Vietnam’s Public-Private Partnership Law to come into effect from 1 January 2021
2 October 2020
On 18 June 2020, a new Public-Private Partnership Law (“PPP Law”) was passed by the Vietnamese National Assembly which will take effect from 1 January 2021. This is the first set of laws of Vietnam established to unify, amend and modify existing regulations on the Public-Private Partnership (“PPP”) regime that will replace the existing regulations on Public-Private Partnership activity that were set out under several laws and decrees, in particular Decree 63/2018/ND-CP (“Decree 63”).
The PPP Law reduces available PPP investment sectors to include only transportation, power grids and power plants (except for the hydroelectric plants and the cases set aside for monopoly by the State as prescribed by the Law on Electricity), irrigation, clean water supply, water drainage and wastewater, waste treatment, healthcare and education and information technology infrastructure. Other sectors previously permitted under Decree 63 for PPP investment, such as commercial infrastructure will no longer be available (except to the extent that they fall within one of the above permitted sectors). Thresholds regarding a project’s value must also be met.
The PPP Law includes criteria which potential PPP investors must fulfil, procedures for appointing PPP investors through bidding process, competitive negotiation or appointment process, procedures and conditions for establishment of PPP project companies, terms and conditions on signing, amendment and termination of PPP contracts, and conditions and restrictions on transfer of shares in PPP project companies by PPP investors. The PPP Law also stipulates the use of standard form contracts for PPPs which will be issued by the Vietnam Government in due course.
There will be guiding decrees and circulars to be issued to guide the implementation of certain regulations under the PPP Law which have been expressed to be subject to further guidance from the Vietnam Government.