The Government issued on February 14 a new regulation on investment in the form of public-private partnership (PPP), stipulating a wide range of sectors open for PPP investment such as traffic infrastructure, electricity, health care and education.
Under Decree No. 15/2015/ND-CP, investors are responsible for contributing equity and mobilizing other capital sources to implement projects as agreed in project contracts, and equity of investors must account for at least 15 percent of projects’ total investment.
The meeting of the PPP Steering Committee in Hanoi on December 16, 2014__Photo: VNA
Regarding projects capitalized at over VND 1.5 trillion (USD 71.4 million), the investor equity ratio must be determined on the partially progressive principle. Specifically, the investor equity must account for at least 15 percent of the capital portion up to VND 1.500 billion, and at least 10 percent of the capital portion in excess of VND 1.5 trillion.
The Decree also sets out five conditions for a PPP project to be approved, including the project’s being in line with the development master plans and plans of relevant sectors and regions and local socio-economic development plans; satisfaction of conditions relevant to the field of investment; capability to attract and absorb investor’s commercial capital, technology and management experience; capability to supply quality products and services in a continous and stable manner; and being capitalized at VND 20 billion (USD 952,000) or more, except projects in the operation and maintenance (O&M) form and those specified in this Decree.
The new regulation, which will take effect on April 10, will replace Government’s Decree No. 108/2009/ND-CP, on investment in the form of build, operate and transfer (BOT), build, transfer and operate (BTO), and build-transfer (BT); Decree No. 24/2011/ND-CP, amending and supplementing a number of articles of Decree No. 108/2009/ND-CP, and the Prime Minister’s Decision No. 71/2010/QD-TTg, promulgating the Regulation on pilot investment in the public-private partnership form.-