VI Are State-owned enterprises eligible to participate in the selection of investors for PPP projects? How many forms of selecting investors for PPP projects are there according to the Law on Investment under the public-private partnership method? How is the process of selecting investors for PPP projects regulated? Through today’s article, let’s find out about this issue with Pham Consult!
Are State-owned enterprises eligible to participate in the selection of investors for PPP projects?
Pursuant to Article 29 of the Law on Investment in the form of public-private partnership 2020, the eligibility to participate in the selection of investors for PPP projects is specified as follows
Eligible status of investors
Investors are eligible when meeting the following conditions:
1. Having a registration for establishment and operation granted by a competent authority of the country or territory where the investor is operating;
2. Independent financial accounting; ensuring competition in the selection of investors;
3. Not in the process of dissolution; not in a case of insolvency according to the provisions of the law on bankruptcy;
4. Not in the period of being banned from participating in investment activities under the PPP method;
5. Enterprises in which the State holds 100% of the charter capital must form a joint venture with investors in the private sector to participate in the bidding;
6. Investors established under foreign law must meet the market access conditions when participating in the selection of investors for projects in industries and professions with conditional market access according to the provisions of the law on investment.
Thus, enterprises with 100% state charter capital will be eligible when meeting the following conditions:
+ Having a registration for establishment and operation issued by a competent authority
+ Independent financial accounting; ensuring competition in the selection of investors
+ Not in the process of dissolution; not in a case of insolvency
+ Not in the period of being banned from participating in investment activities under the PPP method
+ Must form a joint venture with an investor in the private sector to participate in the bidding.
How many forms of selecting investors for PPP projects according to the Law on Investment under the public-private partnership method are there?
Pursuant to Section 2, Chapter III of the Law on Investment in the form of public-private partnership 2020, there are 4 forms of selection of investors for PPP projects, including:
(1) Open bidding as prescribed in Article 37 of the Law on Investment in the form of public-private partnership 2020
(2) Competitive negotiation as prescribed in Article 38 of the Law on Investment in the form of public-private partnership 2020
(3) Designation of investors as prescribed in Article 39 of the Law on Investment in the form of public-private partnership 2020
(4) Selection of investors in special cases as prescribed in Article 40 of the Law on Investment in the form of public-private partnership 2020
Pursuant to Article 37 of the Law on Investment in the form of public-private partnership 2020, open bidding is explained as follows:
Open bidding
1. Open bidding is a form of investor selection in which the number of participating investors is not limited.
2. Open bidding must be applied to all PPP projects, except for the cases specified in Articles 38, 39 and 40 of this Law
Thus, open bidding is a form of investor selection in which the number of participating investors is not limited and is applied to almost all PPP projects except for PPP projects that are regulated to be selected from the remaining forms.
Based on Article 38 of the Law on Investment in the form of Public-Private Partnership 2020, the explanation of Competitive Negotiation is as follows:
Competitive Negotiation
Competitive Negotiation is applied in the following cases:
1. There are no more than 03 investors who meet the requirements for project implementation invited to participate;
2. High-tech application projects in the list of high technologies prioritized for investment and development according to the provisions of the law on high technology;
3. Projects applying new technologies according to the provisions of the law on technology transfer.
Thus, for projects applying high technology or new technology, when selecting investors for PPP projects, competitive negotiation will be applied
In case there are no more than 03 investors meeting the requirements for project implementation invited to participate, competitive negotiation will be applied to select investors
Pursuant to Clause 1, Article 39 of the Law on Investment under the form of public-private partnership 2020, the specific cases of investor designation are stipulated as follows:
Investor designation
1. Investor designation is applied in the following cases:
a) The project needs to ensure requirements on national defense, security, and protection of state secrets;
b) The project needs to immediately select a replacement investor according to the provisions of Point a, Clause 4, Article 52 of this Law to ensure continuity during project implementation.
Thus, for projects that need to ensure requirements on national defense, national security, protection of state secrets or projects that need to immediately select a replacement investor, the form of investor designation will be applied when selecting the PPP project investor.
Pursuant to Clause 1, Article 40 of the Law on Investment in the form of public-private partnership 2020 stipulates
Selecting investors in special cases.
1. In case a PPP project has specific and distinct conditions that cannot apply the investor selection methods prescribed in Articles 37, 38 and 39 of this Law, the competent authority shall submit to the Prime Minister for consideration and decision on the investor selection plan.
Thus, in case a PPP project has specific and distinct conditions that cannot apply the above investor selection methods, the competent authority shall submit to the Prime Minister for consideration and decision on the investor selection plan.
How is the process of selecting investors for PPP projects regulated?
Pursuant to Clause 1, Article 28 of the Law on Investment in the form of Public-Private Partnership 2020, the selection of investors is carried out according to the following process:
(1) Selecting a short list (if applicable);
(2) Preparing to select investors;
(3) Organizing the selection of investors;
(4) Evaluate bidding documents;
(5) Submit, appraise, approve and publicize the results of investor selection;
(6) Negotiate, finalize, sign PPP project contracts, and publicize contract information
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