Investors in PPP projects may enjoy more incentives

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The public-private partnership (PPP) investment format will be applied in many more sectors, with a greater participation of the State and more incentives for investors, according to a draft decision being put forth for comment.

The draft, prepared by the Ministry of Planning and Investment, is meant to replace Decision 71/2010/QD-TTg on PPP investment. At present, Decision 71 enables PPP pilot in only seven sectors, with a focus on traffic infrastructure. According to the amended decision, the PPP format will be carried out in 13 sectors, including many new ones such as culture, sports, agriculture and construction of markets, graveyards and offices for State agencies. Under the current regulations, PPP project planning and feasibility study are financed by the State budget. The chosen investors have to reimburse the State the sums given to make feasibility study reports. Meanwhile, the draft says that the State will cover the costs of project preparation and management, which is counted as its contribution. Investors may be asked to repay the State part or the entire project preparation expenses, depending on the scale of each project. In case their project proposals were rejected, investors would be paid in part or in whole for making project proposals. Currently, the State participation in a PPP project is decided by the prime minister, but it does not exceed 30 percent of the total investment in that project. As per the amended decision, the prime minister will decide the State contribution in the projects funded the central budget, and the proportion can vary greatly depending on each particular project. As for the projects funded by local budgets, the State participation will be decided by chairpersons of the local governments. Some investment incentives and guarantees will be kept unchanged, such as preferential corporate income tax and import tax, and the right to buy foreign currency. The amended decision introduces a new provision regarding dispute settlement. Disputes between the State agencies and investors or between investors in the same projects will be resolved by negotiation and mediation. If negotiation failed to settle disputes, related parties could take the case to the court or arbitration organisations. Legal capital and assets of investors will not be nationalised or confiscated on administrative orders. If there was a need to acquire investors’ assets, the State would compensate investors according to the Investment Law or the project contracts. Deputy Prime Minister Hoang Trung Hai has asked localities to make the lists of projects to be developed under the PPP format and submit them to the government no later than March 10.

Source: Saigon Times Daily


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