Investment registration certificate no longer required for PPP projects

As from 19 June 2012, investors participating in the implementation of a PPP project will not need to carry out procedures for registration of Investment Registration Certificate (the “IRC”) before implementation of the project. Projects having been granted the IRC before 19 June 2018 will continue to be implemented in accordance with the contents of the IRC. In cases where the project needs amending, the parties will amend the project contract in accordance with the relevant provisions of law, without conducting procedures for amending the IRC. In cases where the project contract after amendment is different from the granted IRC, the parties to the project contract will comply with the amended project contract and take responsibility before the law for such amendment.

In addition, to simplify procedures, save costs and time to implement projects for Group C and high-tech PPP projects, it is not required to prepare, appraise pre-feasibility study reports and investment policy decisions for Group C projects, but it is necessary to announce the project after the pre-feasibility study report is approved; and for high-tech PPP projects, selection of investors is made before the pre-feasibility report is prepared, and such preparation will be conducted by the selected investor itself before proceeding with the remaining steps.

As for the implementation of the project under the BT contract, the relevant authority (for projects not proposed by the investor) or the investor (for the project proposed by the investor) must prepare the design and cost estimates in accordance with legislation on construction or related specialized law. The design and cost estimates will be assessed and approved by the professional body to tighten management, thereby eliminating the possibility of losses, deficits and waste of the State budget.

In addition, in order to increase the efficiency and feasibility of the project, the investor's equity ratio must be at least as follows: (i) Not less than 20% of total investment capital for the project has total investment capital of up to VND 1,500 billion, increased by 5% compared to previous regulations; and (ii) for projects with a total investment capital of over VND 1,500 billion, the owner's equity ratio is determined on the following basis: For capital up to VND 1,500 billion, the owner's equity ratio must be not less than 20%; for capital of over VND 1,500 billion, the owner's equity ratio must not be lower than 10%. For BT contracts, investors must meet additional requirements on owner’s equity (if any) in accordance with legislation on investment, construction, housing, real estate business and related laws to implement other projects.

The foregoing are some new provisions of Decree 63/2018/ND-CP issued by the Government on 4 May 2018 regulating investment in the form of public-private partnerships. Decree No. 63/2018/ND-CP will officially come into force on 19 June 2018 in replacement of Decree No. 15/2015/ND-CP dated 14 February 2015 of the Government regulating the same field.