Vietnam: New Decree on financial management for Public-Private Partnership (PPP) projects

In brief

On 26 March 2021, the government of Vietnam issued Decree No. 28/2021/ND-CP ("Decree No. 28"), providing regulations for the financial management of Public-Private Partnership (PPP) projects in Vietnam. Decree No. 28, which took effect on its signing date, does not mention which document it will replace, but it essentially supplants Circular No. 88/2018/TT-BTC of the Ministry of Finance on 28 September 2018 guiding the financial management and fees for selecting investors in PPP projects (“Circular No. 88”). As such, it clarifies some points of confusion and supplements the legal framework with additional guidance.


Contents

Key takeaways

The scope of Circular No. 88 includes, among others, the management of pre-investment costs and implementation costs of PPP projects, the managerial regime and use of capital supporting the preparation of investment and financial plans for PPP projects, as well as the determination of the value of public assets in PPP projects.

Decree No. 28 basically keeps the spirit and most of the relevant financial management provisions under Circular No. 88. Other than that, the new decree introduces some key changes, as follows:

  • Decree No. 28 removes fees for selecting investors in PPP projects. Provisions regarding these fees have been moved to another decree on the implementation of the PPP Law.
  • Decree No. 28 proposes a stricter requirement in cases where the payment request dossier lacks certain documents.
  • Decree No. 28 has several provisions, such as issuing corporate bonds, in relation to how investors can mobilize capital to implement the PPP project. The principles for calculating fees and costs for capital mobilization and relevant documents must be provided in the PPP contract.
  • Decree No. 28 provides a new mechanism to settle the investment capital and distribute the risks in case of revenue reduction.

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