Guide on PPP project investor selection relespansed

 

A view of Dau Giay-Phan Thiet expressway project which is invested under the form of PPP. — Photo vietbao.vn

HA NOI (Biz Hub) — To attract more investment from Vietnamese and foreign investors into public projects, the Government has issued a Decree detailing a number of articles in the Bidding Law on investor selection.

The Decree 30/2015/ND-CP applies to public-private partnership (PPP) projects and projects using land of high commercial value that are specified in the lists approved for construction in urban and new urban centres, commercial housing construction and multipurpose complexes, which are not under PPP projects.

Accordingly, investors in most PPP projects and land-use projects must be selected by open international bidding, except for open domestic bidding or investor appointment under the Law on Investment.

Specifically, subject to open domestic bidding are the sectors in which foreign investment is restricted by the Vietnamese law or international treaties to which Viet Nam is a member state; cases where foreign investors do not participate in or fail the international pre-qualification; PPP projects (group-C projects) as prescribed by the law on public investment; and land-using projects in which the initial total investment is under VND120 billion (US$5.58 million).

The projects under type C are defined by their smaller scale, and would have a capital of less than VND120 billion, but still have a good influence on socio-economic development.

In consideration of the scale and characteristics of the project, the soliciting entity shall decide the selling price for a set of pre-qualification documents, bidding documents, or request for proposals (inclusive of tax).

Of note are the caps applied for investor selection, which are as follows:

For domestic bidding:

A cap of VND20 million ($930) per set on selling bidding dossiers;

A cap of VND5 million ($232) per set on pre-qualification invitations.

For international bidding:

A cap of VND30 million ($1,395) on corresponding rates;

A cap of VND100 million ($4,650) on the development of pre-qualification invitations;

A cap of VND50 million ($2,325) on appraisal of pre-qualification invitations;

A cap of VND100 million on evaluation pre-qualification invitations;

A cap of VND50 million on evaluation of pre-qualification results.

Under the new regulation, investors having prepared feasibility reports for any C-group PPP projects may join in bidding for such projects, provided they are legally and financially independent from other parties, except for contractors providing consultancy on the elaboration of feasibility study reports. However, there will be no certainty that will be chosen to implement such projects without having to compete with other investors.

An investor shall be considered for selection when all of the following conditions are met:

1. The investor has a valid bid-envelope;

2. The investor is qualified in terms of capacity and experience;

3. The investor satisfies technical requirements;

4. The investor offers the lowest service price, which does not exceed the service price determined in the approved feasibility study report, confirms with regulations of law on prices, fees, and charges (if service-price-based method is applied); proposes the lowest state investment, which does not exceed the state investment determined in the approved feasibility study report (if state-investment-based method is applied); or offers the highest payment to state budget (if public-interest-based method is applied.)

Assurance of competition in bidding

An investor participating in bidding (referred to as bidder) is considered legally and financially independent from the consultancy contractor that makes and evaluates the feasibility study report (for PPP projects of group C, the bidder must be independent from the contractor that prepares and evaluates the project proposal), and from the consultancy contractor that makes, evaluates the pre-qualification documents bidding documents, evaluates the pre-qualification applications, bid-envelopes, appraises results of investor selection, from competent authorities, and from the soliciting entity prescribed in Clause 4 Article 6 of the Law on Bidding when the following conditions are satisfied:

a) The bidder does not belong to the same organisation (for administrative services);

b) The bidder, the competent authority, and the soliciting entity do not have more than 30 per cent of each other’s shares or stake;

c) The bidder and the contractor that prepares and evaluates the feasibility study report (for PPP projects of group C, the bidder must be independent from the contractor that makes and evaluates the project proposal), the contractor that prepares, evaluates the pre-qualification documents, bidding documents, evaluates pre-qualification applications, bid-envelopes, appraises results of investor selection do not have a stake in each other; do not own 20 per cent of shares or stakes in the same organization or individual.

The investor is permitted to bid for the project that makes the feasibility study report (or the project proposal for PPP projects of Group C) and must be legally and financially independent from other parties, except for the consultancy contractor that makes the feasibility study report (or project proposal for PPP projects of Group C).

The Decree, which will come into effect on May 5, is expected to improve the country’s legal framework for selecting investors for PPP projects and land-use projects, help address limitations of current regulations, and promptly guide the implementation of the Bidding Law. – VNS

Guide on PPP project investor selection relespansed

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