Amend regulations on PPP and BT investment: Fully calculating to avoid loss of state assets

Vice Chairman of the National Assembly Nguyen Duc Hai chaired the meeting. Photo: National Assembly

State capital participating in PPP projects is of a “supportive” nature

According to the program of the 8th Session, in the afternoon session of November 6, 2024, the National Assembly discussed in the hall the Draft Law amending and supplementing a number of articles of the Law on Planning, the Law on Bidding, the Law on Investment, the Law on Investment under the public-private partnership (PPP) method (1 law amending 4 laws).

Participating in the discussion related to the PPP investment method, delegate Thach Phuoc Binh (Tra Vinh delegation) said that expanding all investment fields of PPP projects can increase opportunities for the private sector to participate more, reducing the burden on the state budget.

The delegate expressed agreement with the proposal to increase the state capital ratio from 50% to a maximum of 70% in special cases, but the delegate suggested adding more clarity on the basis and criteria for application to avoid cases where high ratios are easily abused.

At the same time, it is proposed to expand the authority to decide on state capital participation in larger projects to other competent agencies besides the Prime Minister and provincial People's Councils to ensure consistency in authority.

Delegate Thach Phuoc Binh (Tra Vinh delegation). Photo: National Assembly

Also relating to the state capital in PPP projects, according to delegate Tran Van Tuan (Bac Giang delegation), in reality, to encourage and mobilize social resources for investment in the form of PPP, the State's support policy is very important.

However, the 2020 PPP Law only stipulates state capital to support construction, in order to increase the financial efficiency of the project, and there are no regulations on supporting project revenue that has decreased due to no fault of the investors.

Therefore, delegate Tran Van Tuan proposed to study and add to the draft Law regulations on cases requiring additional state capital support for PPP projects signed contracts before the effective date of this law.

At the same time, the Government is assigned to specify in detail the procedures, subjects of application, and risk sharing mechanism of the investor and the lending party when implementing in this case.

However, regarding this issue, in a recent explanatory report sent to National Assembly deputies, the Ministry of Planning and Investment (MPI) said that the regulation of state capital limits aims to support the state budget to attract private investors, but still ensures specific conditions to avoid widespread application, which does not meet investment efficiency.

However, according to the MPI, the state capital participating in PPP projects is of the nature of "supporting" investors and enterprises to increase the financial feasibility of the project, not of the nature of "contributing capital" to share profits.

Delegate Pham Van Hoa (Dong Thap delegation). Photo: National Assembly

It is necessary to clearly identify benefits and limitations before legalization

Also in the discussion section, regarding the regulations on investment under BT (build-transfer) contracts, some National Assembly deputies said that the BT contract type in some localities has not been fully summarized, so it is necessary to more clearly identify the benefits and limitations before legalization.

Moreover, delegate Pham Van Hoa (Dong Thap delegation) also raised concerns that the transfer to investors in cash or real estate, if not fully calculated, will result in loss of state assets or investors will be disadvantaged.

Minister of Planning and Investment Nguyen Chi Dung. Photo: National Assembly

Explaining some opinions raised by National Assembly deputies at the meeting, Minister of Planning and Investment Nguyen Chi Dung said that restoring the investment form under BT contracts would have a new, stricter management method.

The Minister of Planning and Investment said that if the problems related to investment under BT contracts are resolved, it will unlock huge resources for development investment, contribute immediately to budget revenue and economic growth, help many businesses remove obstacles, and create many jobs.

Thereby increasing transparency, ensuring that the interests of the State and investors are not lost.

Therefore, the authorities will have to determine the land price, bid, and have a mechanism for equal compensation. If the land price increases, the price will be re-evaluated. If it is not enough, the investor must pay the full amount equal to the actual land price at that time. If it is lower, the State will pay back in cash, etc.

Regarding the issue of BT transfer, the Minister commented that this is a very complicated issue. Because there are currently 160 projects worth about 59,000 billion VND listed, but in reality there may be more in the localities.

Therefore, the Government has established a Steering Committee, including the Permanent Deputy Prime Minister as Head of the Committee and including the police, courts, and prosecutors, along with the participation of all internal affairs agencies.

Minister Nguyen Chi Dung said that tomorrow afternoon (November 7, 2024) there would be a meeting to announce the decision to establish the Steering Committee, then a review would be conducted nationwide and a solution would be found for each group of issues.