Decree No. 28/2021/NĐ-CP on the financial management mechanism for public-private partnership investment projects

DECREE

REGULATIONS ON FINANCIAL MANAGEMENT MECHANISMS

FOR PUBLIC-PRIVATE PARTNERSHIP INVESTMENT PROJECTS

On the basis of Law on Government Organization dated June 19, 2015; Law Amending and Supplementing Certain Provisions of the Law on Government Organization and the Law on Local Administration dated November 22, 2019;

On the basis of Law on State Budget Management dated June 25, 2015;

On the basis of Law on Legislative Regulatory Documents dated June 22, 2015; Law Amending and Supplementing Certain Articles of the Law on Legislative Regulatory Documents dated June 18, 2020;

On the basis of Law on Prices dated June 20, 2012;

On the basis of Law on Construction dated June 18, 2014; Law Amending and Supplementing Certain Provisions of the Law on Construction dated June 17, 2020;

On the basis of Law on Management and Use of State Assets dated June 21, 2017;

On the basis of Law on State Debt Management dated November 23, 2017;

On the basis of Law on Public Investment dated June 13, 2019;

On the basis of Securities Law dated November 26, 2019;

On the basis of The Government promulgates this Decree amending and supplementing certain articles and appendices of Decree No. 58/2021/NĐ-CP dated June 10, 2021 of the Government on the operation of credit information service provision (hereinafter referred to as Decree No. 58/2021/NĐ-CP).

On the basis of Investment Law dated June 17, 2020;

On the basis of Law on Public-Private Partnership Investment dated June 18, 2020;

At the proposal of the Minister of Finance;

The Government issues this Decree to regulate financial management mechanisms for public-private partnership investment projects.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree stipulates the financial management mechanisms for public-private partnership investment projects (hereinafter referred to as PPP projects) including:

a) Financial plans of PPP projects;

b) Issuance of corporate bonds by PPP project enterprises;

c) Management and utilization of state capital in PPP projects;

d) Final accounts of construction investment capital for completed works and infrastructure systems;

đ) Procedures for transferring assets of completed works and infrastructure systems to competent state agencies;

e) Sharing of increased or decreased revenue.

2. The investment capital from the state budget allocated for project preparation work by competent authorities, units preparing PPP projects, tendering entities, PPP project appraisal boards, and units assigned to appraise PPP projects as prescribed in Article 73 of the PPP Law (hereinafter referred to as the PPP Law); support for construction of works and infrastructure systems as prescribed in point a, Clause 5, Article 70 of the PPP Law; compensation, land clearance, resettlement assistance, and temporary construction support as prescribed in Article 72 of the PPP Law shall be managed, utilized, and settled according to regulations on management, utilization, settlement, and final accounts of projects using state budget capital.

3. The procedures and formalities for transferring assets of completed works and infrastructure systems to competent state agencies as prescribed in point đ, Clause 1 of this Decree shall be carried out in accordance with the PPP project contract, laws on asset management and utilization, and relevant laws.

Article 2. Applicability

This Decree applies to parties in the PPP project contract; state management agencies and organizations and individuals related to PPP investment activities.

Chapter II
FINANCIAL PLANS OF PPP PROJECTS AND CAPITAL FOR IMPLEMENTING PPP PROJECTS BY INVESTORS AND PPP PROJECT ENTERPRISES

Section 1.

FINANCIAL PLANS OF PPP PROJECTS

Article 3. Principles for developing financial plans of PPP projects

1. The financial plan of a PPP project must fully reflect all legitimate costs and revenues as prescribed during the investment preparation, implementation, and operation phases of the PPP project.

2. Financial indicators in the financial plan are calculated based on discounted post-tax cash flows at the weighted average cost of capital comprising borrowing rates for various sources of capital and return on equity for investors.

3. Actual revenue includes all revenue from providing public goods and services, excluding value-added tax.

4. The currency used in the financial plan is the Vietnamese Dong.

Article 4. Content of the financial plan

The financial plan in the Preliminary Feasibility Study Report and Feasibility Study Report of PPP projects includes the following contents:

1. Total investment amount of the PPP project.

2. Sources of capital for implementing the PPP project:

a) State capital (if applicable) used for purposes prescribed in Articles 70 and 72 of the PPP Law:

- Total state budget investment capital for supporting construction and infrastructure systems; compensation, land clearance, resettlement assistance; temporary construction support;

- Value of state assets as prescribed by laws on asset management and utilization;

- Disbursement schedule for state budget capital; timing of support through state assets.

b) Capital owned by the investor:

- Total equity participating in the PPP project;

- Disbursement schedule for the investor's equity capital.

c) Capital raised by the investor:

- Total amount raised (by type of capital);

- Loan period, bond issuance term (if applicable), disbursement schedule for capital raised by the investor;

- Cost of raising capital: loan interest rate, corporate bond issuance interest rate (if applicable) and other necessary costs related to raising capital (if applicable).

d) Competent authorities are responsible for referring to medium-term and long-term lending rates of commercial banks; loan interest rates of similar projects to establish the financial plan in the Preliminary Feasibility Study Report and Feasibility Study Report (if applicable).

3. Proposals for incentives and guarantees (if applicable).

4. Return on equity for the investor.

5. Estimated operating expenses during the project's operational period.

6. Capital recovery and profit plan for the investor:

a) Proposed price and service fee levels; specifically determining the initial price and fee levels and principles for adjusting prices and fees in accordance with laws on pricing and fees and relevant laws;

b) Estimated revenue from each legitimate source of income for the PPP project enterprise;

c) Implementation, operation, capital recovery, and profit time frame for the investor;

d) For PPP projects implemented under BOT and BT contracts, the capital recovery and profit plan for the investor supplements provisions on payment sources for the PPP project enterprise, including:

- Schedule for disbursement of state budget investment capital for the PPP project;

- Schedule for disbursement of regular operating capital for the PPP project enterprise during the operational phase;

- Revenue from the provision of public services by the PPP project enterprise (if applicable).

7. Payments to the state budget (if applicable) for PPP projects implemented under O&M contracts.

8. Indicators for analyzing and assessing the feasibility of the financial plan include:

a) Net Present Value (NPV);

b) Internal Rate of Return (IRR);

c) Benefit-Cost Ratio (B/C);

d) Impact of changes in total investment amount, operating costs, revenue, and contract duration on the above financial indicators.

đ) Based on the specific nature of the PPP project, the competent authority may supplement other financial indicators such as the debt-to-equity ratio, debt service coverage ratio, quick asset conversion rate, liquidity ratio, and capital preservation measures as prescribed by current laws to select efficient investment projects.

9. The provisions of this Article serve as the basis for relevant agencies to establish, review, approve the prequalification documents, tender documents, and sign the PPP project contract.

Section 2.

SOURCES OF FUNDS FOR THE IMPLEMENTATION OF PPP PROJECTS

 OF THE INVESTOR, PPP PROJECT ENTERPRISE

Article 5. Equity Capital of the Investor

1. The equity capital of the investor participating in implementing the PPP project is the actual contributed capital of an independent legal entity or a consortium of independent legal entities according to the charter of the PPP project enterprise and consistent with the provisions of the PPP project contract.

2. Basis for determining the equity capital of the investor:

a) The most recent annual financial statements of the investor that have been audited by an independent auditing agency and interim financial statements as required by law that have been audited (if applicable);

b) In cases where the investor is a newly established organization within the year, the equity capital of the investor is determined based on the financial statements from the establishment date to the participation date in the PPP project or the interim financial statements at the nearest time point before participating in the PPP project as required by law, which have been audited; simultaneously, the representative of the owner, the owner, or the parent company must provide a commitment letter and financial statements proving sufficient equity capital to contribute according to the financial plan of the PPP project;

c) In cases where the investor participates in multiple projects and long-term financial investments at the same time, the investor must prepare a list of projects and long-term financial investments and ensure that the total equity capital of the investor meets the requirements for all committed equity capital for all projects and long-term financial investments as stipulated;

d) The prequalification documents and tender documents specify the basis for determining the equity capital of the investor and the requirement for the timing of determining the equity capital of the investor to serve as the basis for evaluating the financial capacity of the investor;

đ) At the time of signing the PPP project contract, the investor and the PPP project enterprise are responsible for submitting to the competent authority and the contracting authority the plan to ensure sufficient equity capital and supporting documents proving compliance with the equity capital requirements as stipulated in the PPP project contract, serving as the basis for monitoring the mobilization of capital by the investor and the PPP project enterprise.

3. The investor shall be liable under the law for the accuracy and legality of the data and documents provided related to equity capital, allocation of equity capital for ongoing projects and long-term financial investments, and the plan to mobilize equity capital according to the progress of the PPP project implementation.

Article 6. Mobilizing Loan Capital, Corporate Bonds, and Other Legal Sources of Funds to Implement the Project

1. The loan capital source, capital raised from issuing corporate bonds, and other legal sources of funds up to the time of negotiating the PPP project contract are determined based on the commitments or written agreements between the lender, bond purchaser, or guarantor of the bond issuance and the investor, PPP project enterprise. The total amount of committed capital provided by the lender, bond purchaser, or bond issuance guarantor must be at least equal to the capital that the investor, PPP project enterprise must raise.

2. The total loan capital, including capital raised from issuing corporate bonds and other forms of borrowing (if any), shall not exceed the total loan capital as stipulated in the PPP project contract.

3. The PPP project enterprise can only issue non-convertible individual corporate bonds or non-warrant individual corporate bonds after signing the PPP project contract.

4. The issuance of corporate bonds by the PPP project enterprise shall be carried out in accordance with the provisions of the PPP Law and the Government Decree on the public offering and trading of individual corporate bonds in the domestic market and the public offering of corporate bonds in the international market by companies that are not listed companies.

5. The PPP project enterprise issuing individual corporate bonds in the domestic market must meet the provisions of Clause 4 of this Article and the following conditions:

a) Paying off both principal and interest of issued corporate bonds or paying off due debts for three consecutive years prior to the bond issuance (if applicable);

b) The bond issuance plan must be approved by the competent authority in accordance with the law on the public offering and trading of individual corporate bonds in the domestic market and consistent with the financial plan in the signed PPP project contract;

c) The most recent annual financial statements of the year preceding the issuance year, audited by an auditing organization authorized to audit financial statements of public interest entities. In cases where the PPP project enterprise has operated for less than one year, it is exempted from the condition of having audited financial statements of the year preceding the issuance year according to Clause 3 of Article 78 of the PPP Law.

6. The participants in the offering round are professional securities investors as prescribed by the law on the public offering and trading of individual corporate bonds in the domestic market. Participants in the offering and trading of corporate bonds in the international market shall comply with the regulations of the issuing market.

7. The bond issuance plan of the PPP project enterprise shall be implemented in accordance with the Government Decree on the public offering and trading of individual corporate bonds in the domestic market and the public offering of corporate bonds in the international market and the following provisions:

a) The volume and term of issued corporate bonds must be consistent with the financial plan in the signed PPP project contract.

b) Scheme for handling interest and principal repayment of corporate bonds in the case where the project enterprise's contract is terminated according to Clause 2, Article 52 of the Law on Public-Private Partnerships (PPP).

8. The regime for disclosing information about the issuance of corporate bonds by PPP project enterprises shall be carried out in accordance with the laws on information disclosure when offering and trading individual corporate bonds in the domestic market and issuing corporate bonds in the international market, as well as the following contents:

a) Disclosure of information prior to the issuance regarding the financial plan of the project according to the signed contract; the management and disbursement process of capital from bond issuance; the scheme for handling interest and principal repayment of corporate bonds as stipulated in Clause 7 of this Article;

b) Periodic disclosure of information on the management and use of capital from bond issuance, progress in implementing the PPP project.

9. In the event that the PPP project enterprise's contract is terminated according to Clause 2, Article 52 of the Law on Public-Private Partnerships (PPP), the repayment of principal and interest of corporate bonds to investors purchasing the bonds shall be implemented as follows:

a) The replacement investor who takes over the project according to Clause 2, Article 53 of the Law on Public-Private Partnerships (PPP) shall be responsible for assuming the obligation to repay interest and principal of corporate bonds according to the conditions and terms of the corporate bonds issued by the PPP project enterprise;

b) In the case where the competent authority takes over the project upon early termination of the PPP contract, the PPP project enterprise shall be responsible for making full prepayment of principal and interest of corporate bonds to investors purchasing corporate bonds from the acquisition funds of the PPP project enterprise or the compensation fund for early termination of the PPP project contract as stipulated in Clause 6, Article 52 of the Law on Public-Private Partnerships (PPP) and other legitimate sources of capital of the PPP project enterprise.

10. The PPP project enterprise shall be responsible for reporting to the contracting agency about the situation of mobilizing and using capital according to the PPP project contract.

Chapter III
MANAGEMENT, USE AND PAYMENT OF STATE CAPITAL IN IMPLEMENTING PPP PROJECTSIN THE IMPLEMENTATION OF THE PPP PROJECT

Article 7. Principles for managing state capital used in implementing PPP projects

1. State investment capital, value of public assets supporting construction of works and infrastructure systems as stipulated in Article 70 of the Law on Public-Private Partnerships (PPP):

a) The use of state investment capital to support the construction of works and infrastructure systems as stipulated in Point b, Clause 5, Article 70 of the Law on Public-Private Partnerships (PPP) shall be specifically defined in the PPP project contract concerning the ratio, value, schedule, and conditions stipulated in the PPP project contract.

b) The ratio of state capital participating in PPP projects as stipulated in Points a and c, Clause 1, Article 69 of the Law on Public-Private Partnerships (PPP) shall not exceed 50% of the total investment amount of the project as stipulated in the PPP project contract. For projects consisting of multiple component projects, including those invested through the PPP method, the ratio of state capital as stipulated in Points a and c, Clause 1, Article 69 of the Law on Public-Private Partnerships (PPP) shall not exceed 50% of the total investment amount of the component project utilizing state capital.

c) The portion of state capital used in PPP projects as stipulated in Points a and c, Clause 1, Article 69 of the Law on Public-Private Partnerships (PPP) shall not be included in the revenue recovery plan and profit of the investor.

2. Using public assets to support the construction of works and infrastructure systems:

a) Authority, procedures, and formalities for deciding to use public assets to support the construction of works and infrastructure systems shall be carried out in accordance with the laws on the management and use of public assets;

b) Public assets supporting the construction of works and infrastructure systems must be appraised according to the laws on pricing and the laws on the management and use of public assets. The issuance of the appraisal certificate to determine the value of public assets shall not exceed six months from the date of submitting the proposal for approval of the investment policy of the PPP project to the competent authority.

3. State capital for payment to PPP project enterprises providing public goods and services under BOT contracts and BT contracts:

a) For projects where the signing agencies are state agencies or public service units that cannot fully self-fund their regular expenses or partially self-fund them, the payment capital for PPP project enterprises includes:

- State investment capital allocated in the medium-term and annual investment plans to pay for the project's investment costs;

- Regular expenditure capital from the state budget allocated in the annual budget and any revenues (if any) of the PPP project to pay for the operating costs of the PPP project enterprise.

b) For projects where the signing agencies are public service units that can fully self-fund their regular expenses and investment, the payment capital for PPP project enterprises includes:

- Development Fund of the public service unit, development investment capital from the state budget allocated to pay for the project's investment costs within the state capital portion of the PPP project;

- Other lawful revenues (if any) as prescribed by law.

c) The source of payment capital, payment conditions, payment amount, payment time, and payment deadline must be specified in the PPP project contract.

4. State capital allocated from regular expenditure capital to pay for the implementation costs of the project after the signing of the contract by the competent authority and the signing agency as stipulated in Clause 3, Article 73 of the Law on Public-Private Partnerships (PPP) shall be implemented in accordance with the laws on the state budget.

5. The state shall pay to the PPP project enterprise the reduced revenue portion according to the mechanism of sharing increased and decreased revenue from the state budget reserve as stipulated in Article 82 of the Law on Public-Private Partnerships (PPP) in accordance with Chapter V of this Decree.

Article 8. Principles for controlling the disbursement of state capital investment funds, regular expenditure funds, and lawful revenue sources of project enterprises allocated for investment within PPP projects, and expenditures from budget reserves

Clause 1. The State Treasury is assigned the task of controlling the disbursement of state capital investment funds, regular expenditure funds, and lawful revenue sources of PPP project enterprises for investment, regular expenditure, and expenditures from budget reserves within PPP projects.

Clause 2. State capital in PPP projects shall be disbursed when competent authorities allocate capital plans and budget estimates according to the provisions of the law.

Clause 3. State capital supporting the construction of project components and infrastructure systems as stipulated in Point b, Clause 5, Article 70 of the PPP Law shall only be disbursed for completed component quantities confirmed by the contracting authority of the PPP project, in accordance with the ratio of funding sources, value, progress, and conditions specified in the PPP project contract, consistent with the medium-term and annual state capital investment plans approved by competent authorities.

Clause 4. State capital shall be disbursed to PPP project enterprises providing public products and services under BOT and BOOT contracts from the time such public products and services are provided according to the agreement in the PPP project contract. The periodic payment value shall be based on the actual quantity and quality of public products and services provided by the PPP project enterprise as stipulated in the PPP project contract, consistent with the medium-term and annual state capital investment plans and regular expenditure budgets approved by competent authorities.

Clause 5. Disbursements of state capital to PPP project enterprises shall not exceed the amount of state capital in implementing the PPP project (or adjusted state capital) approved by competent authorities and stipulated in the PPP project contract. The disbursement of state capital to PPP project enterprises in a year shall not exceed the capital plan allocated for the PPP project.

Clause 6. The State Treasury shall base its control over the disbursement of state capital on the payment request documents sent by the contracting authority of the PPP project in accordance with this Decree and the provisions of the PPP project contract. In cases where it detects non-compliant expenditure requests or missing documents as required, the State Treasury shall notify the contracting authority of the PPP project of its refusal to disburse funds within three working days from the date of receipt of the payment request, specifying the reasons for the refusal.

Clause 7. The contracting authority of the PPP project shall bear legal responsibility before the law and authorized persons for determining whether the PPP project enterprise has met the disbursement conditions as prescribed in this Decree and the PPP project contract; it shall be responsible for the proposed payment value, supervision, and determination of the proportion of the enterprise's own capital disbursed in accordance with the PPP project contract; it shall ensure the legality of the documents in the files submitted to the State Treasury and relevant agencies.

Clause 8. In cases where documents in the payment request files of authorized levels contravene legal regulations, the State Treasury may temporarily suspend disbursements and simultaneously issue a document requesting the issuing authority to reconsider the issuance of documents contrary to current regulations and clearly state the proposed opinion. If, within ten working days from the date the State Treasury issues a document requesting the issuing authority to reconsider the issuance of documents contrary to current regulations (and the issuing authority does not respond or responds inconsistently with current regulations), the State Treasury shall report to higher-level authorities and financial agencies for review and handling.

Article 9. Methods for Implementing State Capital Payment Procedures through the State Treasury

1. Submitting documents and receiving results directly at the State Treasury's office.

2. Submitting documents and receiving results through the State Treasury's public service information website in cases where units have participated in electronic transactions with the State Treasury (units log in and follow the instructions on the State Treasury's public service information website).

3. Submitting documents and receiving results through the National Public Service Portal.

Article 10. Legal Documents to be Submitted Once for Control and Payment of Public Investment Capital, Regular Expenditure Capital, and Legally Collected Revenue Capital for Investment and Regular Expenditure in PPP Projects

1. The agency signing the PPP project contract shall submit one set of initial legal documents to the State Treasury where the account is opened (these documents are original or certified true copies from authorized agencies, only submitted once until the PPP project contract is terminated, except when additional or amended documents are required) prior to or simultaneously with the request for payment of public investment capital, regular expenditure capital, and legally collected revenue capital for investment and regular expenditure in the PPP project.

2. The legal documents to be submitted once include:

a) Decision approving the PPP project by the competent authority and any decisions adjusting the PPP project (if applicable);

b) PPP project contract and any supplementary agreements to the PPP project contract (if applicable).

Article 11. Documents for Control and Payment of Public Investment Capital, Regular Expenditure Capital, and Legally Collected Revenue Capital for Investment and Regular Expenditure in PPP Projects

1. Based on the completed volume accepted for inspection and the payment conditions stipulated in the PPP project contract, the agency signing the PPP project contract shall prepare and submit one set of payment request documents to the State Treasury for public investment capital support for construction works and infrastructure systems as prescribed in Point b Clause 5 Article 70 of the PPP Law, including:

a) A summary table of the value of completed work volumes proposed for payment under the PPP project contract prepared by the PPP project enterprise and confirmed by the agency signing the PPP project contract (Annex I);

b) A request for public investment capital payment from the agency signing the PPP project contract (Annex II);

c) Payment transfer documentation as prescribed in Decree No. 11/2020/NĐ-CP dated January 20, 2020 of the Government on administrative procedures within the domain of the State Treasury.

2. Based on the public goods and services provided according to the agreement in the PPP project contract, the agency signing the PPP project contract shall prepare and submit one set of payment request documents to the State Treasury for the PPP project enterprise providing public goods and services under BLT contracts and BTL contracts, including:

a) A summary table of the quantity and quality of public goods and services proposed for payment prepared by the PPP project enterprise and confirmed by the agency signing the PPP project contract (Annex III);

b) A request for payment to the PPP project enterprise providing public goods and services from the agency signing the PPP project contract (Annex IV);

c) Payment transfer documentation as prescribed in Decree No. 11/2020/NĐ-CP dated January 20, 2020 of the Government on administrative procedures within the domain of the State Treasury.

Chapter IV
SETTLEMENT OF PUBLIC INVESTMENT CAPITAL FOR CONSTRUCTION WORKS AND INFRASTRUCTURE SYSTEMS

Article 12. Settlement of Public Investment Capital, Regular Expenditure Capital, and Legally Collected Revenue Capital for Investment and Regular Expenditure According to the Fiscal Year

The agency signing the PPP project contract shall settle public investment capital according to the fiscal year in accordance with regulations on management, payment, and settlement of projects using public investment capital, and annual settlement of regular expenditure sources according to regulations on examination, review, notification, and annual settlement compilation.

Article 13. Principles for finalizing state capital investment in completed PPP projects and infrastructure systems

1. After completion, PPP projects, component projects, sub-projects, independent works, and independent work items under PPP projects must be audited to finalize the project investment capital report in accordance with Article 60 of the PPP Law to complete the finalization of project investment capital.

2. For the portion of state capital investment supporting work items and infrastructure systems as stipulated in point b, Clause 5, Article 70 of the PPP Law, the contracting agency of the PPP project shall aggregate the value of state capital investment that has been disbursed to the PPP project enterprise, which will be audited by an independent auditing agency to serve as the basis for finalizing state capital investment within the PPP project according to the provisions of the PPP project contract.

3. Finalizing state capital investment in completed works and infrastructure systems involves determining the value of legitimate expenses incurred during the investment process to put the project into operation and use in accordance with the PPP project contract signed between the PPP project contracting agency and the investor, and the PPP project enterprise, consistent with relevant laws.

4. The principles for determining the finalization of expenses related to capital mobilization, contingency costs, savings made by the PPP project enterprise as stipulated in Clause 2, Article 61 of the PPP Law, and other incidental costs must be specifically defined in the PPP project contract, consistent with relevant laws.

5. Based on the value of finalizing state capital investment in completed works and infrastructure systems and the provisions of the PPP project contract, the parties to the PPP project contract shall organize the implementation of any resulting rights and obligations (if any).

Article 14. Procedures and formalities for finalizing state capital investment in completed works and infrastructure systems

1. For PPP projects implemented through BOT contracts, BOO contracts, O&M contracts, and BLT contracts: The PPP project contracting agency and the PPP project enterprise shall agree on selecting an independent auditing agency with capability and experience to audit construction investment costs for works and infrastructure systems in accordance with Clause 3, Article 60 of the PPP Law.

2. For PPP projects implemented through BTO contracts and BTL contracts: After the completion of the PPP project, the PPP project contracting agency shall issue a document requesting the State Audit Agency to audit construction investment costs for works and infrastructure systems in accordance with Clause 3, Article 85 of the PPP Law.

3. For hybrid contracts: Based on the content of the PPP project contract, the PPP project contracting agency and the PPP project enterprise shall agree on the procedures and formalities for finalizing state capital investment in works and infrastructure systems in accordance with Articles 60 and 85 of the PPP Law and the provisions of this Decree.

4. The PPP project enterprise shall prepare and submit one set of finalization documents for state capital investment in completed works and infrastructure systems of the PPP project to the PPP project contracting agency within the following specific time limits:

a) Projects under the investment decision-making authority of the National Assembly and the Prime Minister: nine months;

b) Projects under the investment decision-making authority of the Minister, head of central agencies, other agencies, and provincial People's Councils: six months;

c) The deadline for the PPP project enterprise to prepare and submit finalization documents for state capital investment in completed works and infrastructure systems to the PPP project contracting agency as specified in points a and b of this clause shall be calculated from the date the works and infrastructure systems are accepted for completion in accordance with the law.

5. The PPP project contracting agency shall review and approve the value of finalizing state capital investment in completed works and infrastructure systems within one month from the date it receives all documents provided by the PPP project enterprise in accordance with Article 15 of this Decree.

Article 15. Documents for final settlement of capital investment in completed construction projects and infrastructure systems

1. The proposal requesting approval of the final settlement value of capital investment in completed construction projects and infrastructure systems by the project enterprise (Original). The proposal clearly states the agreed contents, non-agreed contents, and reasons for disagreement between the PPP project enterprise and the auditing agency.

2. Project PPP contract documents as stipulated in Article 46 of the PPP Law (Copies certified true to original).

3. Audit reports from independent auditing agencies for projects implemented under BOT contracts, BOO contracts, O&M contracts, and BLT contracts; Audit reports from the State Audit Agency for projects invested under BTO contracts and BTL contracts (Copies certified true to original).

4. Inspection conclusions from inspection agencies, inspection records from inspection bodies, investigation results from competent state agencies in cases where the PPP project enterprise violates laws and is investigated by competent state agencies (Copies certified true to original) (if applicable).

5. Report on compliance with provisions of Clause 3 and Clause 4 of this Article by the PPP project enterprise (Original).

Chapter V
SHARING INCREASED AND DECREASED REVENUE

Article 16. Principles for managing revenue and expenditure arising from the revenue-sharing mechanism

1. For PPP project enterprises:

a) The increased revenue portion shared by the PPP project enterprise with the State according to Clause 1 of Article 82 of the PPP Law shall be directly deducted from the revenue when determining the corporate income tax payable by the PPP project enterprise.

b) The PPP project enterprise shall pay the increased revenue portion shared with the State into the State budget in accordance with the laws on the State budget.

c) The decreased revenue portion shared by the State with the PPP project enterprise as stipulated in Clause 2 of Article 82 of the PPP Law shall be considered as revenue from providing public goods and services by the PPP project enterprise. The PPP project enterprise is not required to declare and pay value-added tax on the decreased revenue portion shared by the State with the PPP project enterprise as stipulated in Clause 2 of Article 82 of the PPP Law.

2. For the State:

a) The increased revenue portion shared by the PPP project enterprise with the State according to Clause 1 of Article 82 of the PPP Law for projects within the investment decision-making authority of the National Assembly, the Prime Minister, the Minister, the head of central agencies, and other agencies shall be revenue of the central budget.

b) The increased revenue portion shared by the PPP project enterprise with the State according to Clause 1 of Article 82 of the PPP Law for projects within the investment decision-making authority of the People's Councils at provincial level shall be revenue of the local budget.

c) Sources of State funds for sharing the decreased revenue portion with the PPP project enterprise:

- For projects within the investment decision-making authority of the National Assembly, the Prime Minister, the Minister, the head of central agencies, and other agencies, the State funds for sharing the decreased revenue portion according to Clause 2 of Article 82 of the PPP Law shall come from the central budget reserve.

- For projects within the investment decision-making authority of the People's Councils at provincial level, the State funds for sharing the decreased revenue portion according to Clause 2 of Article 82 of the PPP Law shall come from the local budget reserve.

d) The State shall pay the decreased revenue portion to the PPP project enterprise according to Clause 2 of Article 82 of the PPP Law after the competent authority has made a decision on using the State budget reserve for the PPP project. The decreased revenue portion shared by the State with the PPP project enterprise does not include value-added tax.

Article 17. Procedures and formalities for implementing revenue sharing increases and decreases

1. Annually, based on the actual revenue reported by the PPP project enterprise in accordance with Clause 1, Article 20 of this Decree, the contracting authority of the PPP project and the PPP project enterprise and investor shall carry out:

a) Reviewing and comparing the actual revenue of the PPP project with the revenue stipulated in the PPP project contract;

b) Adjusting the price and fee levels of products and public services, and adjusting the contract term in accordance with Clause 1 and Clause 2, Article 82 of the PPP Law.

c) In cases where conditions arise that allow the application of the revenue sharing mechanism as prescribed in Clause 1 and Clause 2, Article 82 of the PPP Law, the contracting authority of the PPP project has the responsibility to request the State Audit Agency to audit the actual increase or decrease in revenue of the PPP project to serve as the basis for determining the value of shared revenue between the State and the PPP project enterprise.

2. Based on the audit report of the State Audit Agency and the PPP project contract, the contracting authority of the PPP project determines the value of the shared revenue portion between the State and the PPP project enterprise and reports it to the competent authority.

3. For the increased revenue portion that the PPP project enterprise shares with the State as determined by the parties in accordance with Clause 2 of this Article, the PPP project enterprise is responsible for remitting this revenue portion to the State budget within sixty days from the date the State Audit Agency issues the audit report confirming the increased revenue.

4. For the decreased revenue portion that the State shares with the PPP project enterprise as determined by the parties in accordance with Clause 2 of this Article, the procedures and formalities for implementing revenue sharing are as follows:

a) For projects decided on investment orientation by the National Assembly, the Prime Minister, the Minister, the head of a central agency, or another agency:

- The competent authority sends one set of documents to the Ministry of Finance requesting implementation of the revenue reduction sharing mechanism. The documents include:

(i) The State Audit Agency's audit report on the reduced revenue of the PPP project enterprise (a certified copy);

(ii) A document from the contracting authority of the PPP project requesting sharing of the reduced revenue portion; specifying the value of the reduced revenue that the State will share with the PPP project enterprise (original).

- The Ministry of Finance takes the lead and coordinates with relevant agencies to compile and submit to the Prime Minister for consideration and decision on using the central government reserve fund to pay the reduced revenue portion to the PPP project enterprise in accordance with Clause 2, Article 82 of the PPP Law.

b) For projects decided on investment orientation by the People's Council at provincial level:

- The contracting authority of the PPP project sends one set of documents to the Provincial Department of Finance requesting implementation of the revenue sharing mechanism. The documents include:

(i) The State Audit Agency's audit report on the reduced revenue of the PPP project enterprise (a certified copy);

(ii) A document from the contracting authority of the PPP project requesting sharing of the reduced revenue portion; specifying the value of the reduced revenue that the State will share with the PPP project enterprise (original).

- The Provincial Department of Finance takes the lead and coordinates with relevant agencies to compile and submit to the People's Committee at provincial level for consideration and decision on using the local government reserve fund to pay the reduced revenue sharing portion to the PPP project enterprise in accordance with Clause 2, Article 82 of the PPP Law.

c) The competent authority considers and decides on using the State reserve fund to pay the reduced revenue sharing portion to the PPP project enterprise within sixty days from the date the finance authority receives all the documents requesting revenue sharing in accordance with Clause 4 of this Article.

Article 18. Payment for Revenue Reduction Sharing from the State Budget Reserve Fund

1. Based on the decision of the competent authority regarding the use of the state budget reserve fund as stipulated in Clause 4, Article 17 of this Decree, the competent authority (for PPP projects using the central government's reserve fund) or the agency signing the PPP project contract (for PPP projects using local government's reserve fund) shall issue a written request to the financial agency at the same level to issue an expenditure order to pay the revenue reduction sharing portion to the PPP project enterprise according to the laws on the state budget.

2. Based on the expenditure order issued by the financial agency, the State Treasury shall verify the legality and validity of the expenditure order and disburse funds from the budget to the account of the PPP project enterprise in accordance with the laws on the state budget.

Chapter VI
REPORTING SYSTEM

Article 19. Responsibilities of the Competent Authority, Contract Signing Agency of the PPP Project, and State Agencies with Public Assets Participating in the PPP Project

1. The competent authority shall report on the implementation and disbursement of public investment capital, regular expenditure funds, lawful sources of income for investment and regular expenditures under the state budget's responsibility to fulfill the PPP project contract according to the laws on public investment, state budget, management and use of public assets, and relevant laws.

2. State agencies with public assets participating in the PPP project shall report on the use of public assets participating in the PPP project according to the laws on management and use of public assets.

3. The competent authority shall compile all commitments on the use of state-owned capital stipulated in PPP project contracts into the report on the implementation of the PPP project to report to the central-level state management agency on PPP projects as prescribed in Clause 7, Article 94 of the PPP Law.

Article 20. Responsibilities of Investors and PPP Project Enterprises

1. Within ten days from the date the PPP project enterprise submits the annual tax settlement dossier as required by the law on tax administration, the PPP project enterprise shall issue a written report to the agency signing the PPP project contract on the actual revenue of the fiscal year as the basis for implementing the mechanism for sharing increased or reduced revenues (if applicable).

2. The PPP project enterprise entrusted by the State to manage and use public assets according to the PPP project contract and the laws on management and use of public assets shall report on the use of public assets participating in the PPP project according to the laws on management and use of public assets.

Chapter VII
DUTIES, POWERS, RESPONSIBILITIESOF THE AUTHORITIES, ORGANIZATIONS AND INDIVIDUALS

Article 21. Duties, Powers of the Ministry of Finance

1. To compile and report to the Prime Minister on the use of the central government's state budget reserve fund when there is a mechanism for sharing revenue reduction in PPP projects decided by the National Assembly, the Prime Minister, the Minister, the head of the central agency, or other agencies.

2. To lead and direct the organization to implement payment and settlement of state-owned capital in PPP projects, settlement of public investment capital for completed works and infrastructure systems.

3. To coordinate with the Ministry of Planning and Investment to report to the Government on determining public investment capital in PPP projects.

4. To coordinate with the Ministry of Planning and Investment in supervising the implementation of financial plans in PPP project contracts of ministries, sectors, central agencies, other agencies, and provincial People's Committees.

Article 22. Tasks and Authorities of the Ministry of Planning and Investment

1. Take the lead and coordinate with the Ministry of Finance to report to the Government on determining the public investment capital in PPP projects.

2. Take the lead and coordinate with the Ministry of Finance, ministries, sectors, central agencies, provincial People's Committees to supervise the implementation of PPP projects.

3. Coordinate with the Ministry of Finance to report to the Prime Minister on the use of the central budget reserve when there is a mechanism for sharing reduced revenue from PPP projects decided by the National Assembly, the Prime Minister, the Minister, the head of a central agency, or another agency.

Article 23. Responsibilities of the competent authority and the agency signing the PPP project contract

1. Implement the provisions of the PPP Law, the State Budget Law, the Public Investment Law, the Law on Management and Use of State Property, the Price Law, guiding documents for these laws, and the provisions in the PPP project contract.

2. Be responsible for evaluating the financial capacity of investors based on the documents provided by the investors, ensuring the selection of investors with sufficient financial capacity to implement PPP projects: monitor the fulfillment of commitments to raise equity capital by investors as stipulated in the PPP project contract.

3. Examine and approve financial handling plans, rights, responsibilities, and obligations of the parties in cases where the PPP project contract is terminated according to Article 52 of the PPP Law.

4. Inspect and supervise the implementation of PPP projects, including raising and using the investment capital of investors and PPP project enterprises as stipulated in the PPP project contract.

5. Urge and direct the agency signing the PPP project contract and the PPP project enterprise to complete the final settlement of public investment funds for completed works and infrastructure systems in accordance with regulations.

6. Summarize difficulties and obstacles in implementing the provisions of this Decree and submit them to the Ministry of Finance for consolidation and reporting to the Government.

Article 24. Responsibilities of Investors and PPP Project Enterprises

1. Investors and PPP project enterprises are responsible for performing the rights, obligations stipulated in the PPP project contract and relevant laws.

2. Coordinate with the competent authority, the agency signing the contract, and the agency managing the state capital portion in the PPP project to complete the payment documents for the state capital portion in the PPP project and the final settlement documents for completed works and infrastructure systems.

3. Investors and PPP project enterprises are responsible for determining revenue, costs, and other income for tax purposes according to the Tax Law and this Decree.

Chapter VIII
IMPLEMENTING PROVISIONS

Article 25. Transitional Provisions

1. For PPP projects that have not yet tendered at the time this Decree takes effect, the Tender Inviter shall be responsible for extending the tender documents in accordance with the bidding law to amend the tender documents and request documents in accordance with this Decree, ensuring no adjustment to the investment policy and approved feasibility study report.

2. For PPP projects that have tendered but have not signed the PPP project contract by the time this Decree takes effect, the agency signing the PPP project contract shall organize negotiations and sign the contract in accordance with Clause 3, Article 101 of the PPP Law and the provisions of this Decree regarding procedures and processes for paying state capital in the PPP project, final settlement of public investment funds for works and infrastructure systems, and implementing mechanisms for sharing increased or decreased revenue, ensuring no adjustment to the investment policy and approved feasibility study report.

3. PPP project contracts signed before the effective date of this Decree shall continue to be implemented in accordance with the PPP project contract.

4. Final settlement of public investment funds for works and infrastructure systems for PPP project contracts signed before the effective date of this Decree shall be carried out in accordance with the law at the time the PPP project contract was signed.

Article 26. Effective date

1. This Decree takes effect from the date of signature.

2. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Councils, centrally-administered cities, related agencies, organizations, and individuals are responsible for implementing this Decree./.

 

ANNEX 1

TABLE OF TOTAL VALUE OF COMPLETED WORKS ACCORDING TO THE PPP PROJECT CONTRACT FOR PAYMENT PROPOSAL
(Attached to Decree No. 28/2021/NĐ-CP dated March 26, 2021 of the Government)

Project Name:                                                        Project Code:

Based on the PPP project contract between the PPP project contract signing agency and the investor/project enterprise No.: …on …day…month…. year……

PPP Project Enterprise:

Payment Number:

Basis for Determination:

Table of Completed Work Volume Determination Each Time No. …on …day…month…. year…..

1. Contract Value:

2. State Capital Participation Value in the Project (according to the contract):

3. Cumulative Value of Work Volume Completed by the Investor up to the Payment Proposal Period:

4. Cumulative State Capital Paid Up to the Payment Proposal Period:

5. Amount Proposed for Payment of State Capital in This Period:

Amount in Words: …(is the amount proposed for payment in this period).

 

 

ANNEX II

(Attached to Decree No. 28/2021/NĐ-CP dated March 26, 2021 of the Government)

 

APPLICATION FOR PAYMENT OF STATE CAPITAL PARTICIPATION IN THE PPP PROJECT

Respectfully submitted to: State Treasury …

Project name: … Project investment code: …

PPP project enterprise: … Enterprise registration number: …

Based on the PPP project contract between the contracting agency and the investor/PPP project enterprise, contract number: … date … month … year …

Based on the Summary Table of Completed Work Volume Value for Payment Request under the PPP project contract, request number … date … month … year …

Cumulative value of completed work volume for payment request: … VND.

Amount requested for payment:

Source of funds:…

Budget plan: … Year ...

Unit: dong

Total amount requested for payment in figures: …

In words: ...

…………………………………………………………………………………………………………...

Beneficiary unit name …

Beneficiary unit account number … at …

 

(1) Abbreviation of the contracting agency

 

PART OF THE STATE TREASURY

Date of receipt of payment request form

The State Treasury agrees to make payment as follows

Remarks: …

 

 

ANNEX III

SUMMARY TABLE OF VALUE AND QUALITY OF PUBLIC PRODUCTS AND SERVICES FOR PAYMENT REQUEST
(Attached to Decree No. 28/2021/NĐ-CP dated March 26, 2021 of the Government)

Project name: … Project code: …

Based on the PPP project contract between the contracting agency and the investor/PPP project enterprise, contract number: … date … month … year …

PPP Project Enterprise:

Payment Number:

Basis for Determination:

Quantity and quality determination table of public products and services provided each time, number … date … month … year …

1. Contract Value:

2. Value of public investment capital payment for the project (according to the contract):

3. Cumulative value of quantity of public products and services provided by the project enterprise up to the payment request period:

4. Cumulative value of state participation capital paid up to the payment request period:

- Public investment capital:

- Regular expenditure capital:

- Development Fund of the public institution:

- Other lawful revenue sources disbursed up to the payment request period:

5. Value of payment requested this period:

(Amount in words: …)

- Public investment capital:

- Regular expenditure capital:

- Development Fund of the public institution:

- Other lawful revenue sources paid up to the payment request period:

 

 

ANNEX IV

(Attached to Decree No. 28/2021/NĐ-CP dated March 26, 2021 of the Government)

 

PAYMENT REQUEST FORM FOR PPP PROJECT ENTERPRISE PROVIDING PUBLIC PRODUCTS AND SERVICES

Respectfully submitted to: State Treasury …

Project name: … Project investment code: …

PPP project enterprise: … Enterprise registration number: …

Based on the PPP project contract between the contracting agency and the investor/PPP project enterprise, contract number: … date … month … year …

Based on the Summary Table of Value and Quality of Public Products and Services Provided for Payment Request according to the contract, request number … date … month … year …

Cumulative value of quantity of public products and services provided for payment request: … VND.

Amount requested for payment:

Source of funds:…

Belongs to budget plan/project estimate: … Year ...

Unit: dong

Total amount requested for payment in figures: …

In words:…

Beneficiary unit name …

Beneficiary unit account number … at …

 

 

(1) Abbreviation of the contracting agency

 

PART OF THE STATE TREASURY

Date of receipt of payment request form

The State Treasury agrees to make payment as follows

Remarks: …