Circular No. 55/2023/TT-BGTVT guides certain contents of projects invested under the public-private partnership (PPP) model, including the business-management highway concession contract.

CIRCULAR

Guidelines on certain contents of investment projects under the public-private partnership (PPP) model, including business-operation management contracts for expressways

_____________________

 

Pursuant to the Public-Private Partnership Investment Law dated June 18, 2020;

Pursuant to the Law "7. A flexible power plant is a thermal power plant using reciprocating internal combustion engines (RICE) or aeroderivative gas turbines (Aero-GT) with fast start-up capabilities, designed in modular form to generate electricity for balancing capacity and maintaining power system stability."amending and supplementing certain articles of the Law on Public Investment, the Law on Public-Private Partnership, the Investment Law, the Housing Law, the Bidding Law, the Electricity Law, the Enterprise Law, the Special Consumption Tax Law, and the Civil Enforcement Law dated January 11, 2022;

Pursuant to Decree No. 28/2021/NĐ-CP dated March 26, 2021 of the Government stipulating the financial management mechanism for investment projects under the public-private partnership model;

Pursuant to Decree No. 35/2021/NĐ-CP dated March 29, 2021 of the Government detailing and guiding the implementation of the Law on Public-Private Partnership;

Pursuant to Decree No. 56/2022/NĐ-CP dated August 24, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry ofof Transport;

The Minister of Transport issues this Circular detailing Clause 3 and Clause 4, Article 52 of the Road Law, including:

The Minister of Transport issues this Circular guiding certain contents of investment projects under the public-private partnership (PPP) model, including business-operation management contracts for expressways.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides certain contents of investment projects under the public-private partnership (hereinafter referred to as PPP), including business-operation management contracts for expressways (hereinafter referred to as O&M expressway projects) throughout the country, including:

1. Certain contents in the preliminary feasibility study report and feasibility study report;

2. Methods and standards for evaluating tender documents;

3. Model project contract.

Article 2. Applicability

This Circular applies to organizations and individuals participating in or related to the activities of preparing preliminary feasibility study reports, feasibility study reports, selecting investors, and signing O&M expressway project contracts throughout the country.

Chapter II

CERTAIN CONTENTS IN THE PRELIMINARY FEASIBILITY STUDY REPORT AND FEASIBILITY STUDY REPORT OF THE PROJECT

Article 3. Economic and social efficiency indicators

1. The economic and social efficiency indicators of the project include: net present value (ENPV); benefit-cost ratio (BCR); economic internal rate of return (EIRR). The calculation of these indicators shall be carried out according to the provisions in Part IV of Form 01 in Appendix II and Part IV of Form 01 in Appendix III attached to Decree No. 35/2021/NĐ-CP dated March 29, 2021 of the Government detailing and guiding the implementation of the Law on Public-Private Partnership (Decree No. 35/2021/NĐ-CP).

2. Determination of cost and benefit factors from an economic and social perspective according to the following groups of factors:

a) Group of factors that can be quantified and converted into monetary terms, including: benefits obtained from receiving state budget revenue; benefits obtained due to the state not having to allocate annual state budget funds for the management, operation, and maintenance of expressway projects;

b) Group of factors that can be quantified but not priced, including: benefits due to promoting economic growth, increasing employment;

c) Group of factors that can only be qualitatively determined, including: benefits due to the state not having to organize a management body to directly manage, operate, and maintain expressway projects.

3. Units preparing preliminary feasibility study reports and feasibility study reports may supplement other factors outside those mentioned in Clause 2 of this Article, ensuring consistency with the specific characteristics of each project, construction work, and relevant laws.

4. In cases where it is not possible to determine quantifiable benefit factors that can be converted into monetary terms as prescribed in point a of Clause 2 of this Article, the project preparation unit may assess the economic and social efficiency of the project based on the remaining groups of factors.

Article 4. Quality Index for Construction Projects and Infrastructure Systems Provided by Project Enterprises

The quality index for construction projects and infrastructure systems provided by project enterprises shall be determined as follows:

1. The assessment of the quality of construction works serving business and management operations shall be carried out by investors and project enterprises (if any) in accordance with the laws on construction.

2. The assessment of the quality of management and operation shall be conducted in accordance with the laws on the management and operation of high-speed road infrastructure.

3. The assessment of the quality of maintenance of high-speed road infrastructure shall be implemented in accordance with the criteria for supervision and acceptance of maintenance results of traffic infrastructure assets set forth by the Minister of Transport.

Article 5. Certain Contents in the Financial Plan of O&M Projects

1. The financial plan of O&M projects shall be implemented in accordance with the provisions of Section 1, Chapter II of Decree No. 28/2021/ND-CP dated March 26, 2021, of the Government on the financial management mechanism for public-private partnership investment projects (Decree No. 28/2021/ND-CP).

2. The total investment amount of the project shall be implemented in accordance with the provisions of Article 6 of this Circular.

3. The return on equity of the investor shall be determined based on the profit framework prescribed in Article 7 of this Circular.

4. Costs during the operational period of the project shall be implemented in accordance with the provisions of Article 8 of this Circular.

5. The plan to recover the initial investment and profits of the investor shall be implemented in accordance with the provisions of Article 9 of this Circular.

6. Costs throughout the project's lifecycle include the total investment amount of the project as stipulated in Article 6 of this Circular and costs during the operational period of the project as stipulated in Article 8 of this Circular.

7. The minimum tax revenue at the feasibility study report stage and the preliminary feasibility study report shall be determined based on the calculation of the financial plan.

8. The implementation period of the project shall not exceed the land allocation or lease term as prescribed by the laws on land and shall be calculated based on:

a) The current status of construction works and infrastructure systems within the project;

b) Technical and technological requirements for each type of construction work and infrastructure system, the time required for periodic repairs or the usage period of construction works and infrastructure systems as prescribed by the laws;

c) The financial plan and the minimum tax revenue value.

Article 6. Preliminary Total Investment Estimate and Total Project Investment

1. The preliminary total investment estimate of the project is an estimated investment cost of the project that is consistent with the contents of the preliminary feasibility study report of the project.

The preliminary total investment estimate of the project shall be calculated based on the scale, capacity, or service capability of the project and the unit cost of investment (if available) or cost data from similar projects in terms of type, scale, and nature, adjusted and supplemented with necessary costs, including cost items as stipulated in Clause 2 of this Article.

2. The total project investment is the entire investment cost of the project specifically determined in accordance with the feasibility study report of the project. The detailed contents of the costs forming the basis for determining the total project investment for O&M highway projects include:

a) Investment costs for construction works to serve business and management operations of O&M projects (if any) in accordance with the Government's regulations on investment cost management and detailed legal documents;

b) The minimum tax revenue value as prescribed in Clause 7 of Article 5 of this Circular;

c) Project preparation costs of competent authorities, PPP project preparation units; organization costs of the PPP project appraisal board and units assigned the task of appraising PPP projects; organization costs of the authority in charge, tenderer for selecting investors and signing contracts;

d) Equipment costs including procurement and technology equipment costs, training and technology transfer costs (if any), installation, testing, calibration costs, and other related costs;

đ) Transportation, insurance, tax, and other related fees and costs;

e) Other cost components.

Article 7. Profit Margin on Equity of Investors

1. Based on legal regulations, economic and social conditions, and the specific characteristics of the project, the project preparation unit shall propose the profit margin on equity of investors in the financial plan within the pre-feasibility study report and feasibility study report, ensuring the following conditions simultaneously:

a) The minimum profit margin on equity of investors shall not be lower than the average interest rate for 12-month term deposits for organizational customers of at least three state-owned joint-stock commercial banks, determined at the nearest point in time within the last three months before the preparation of the pre-feasibility study report and feasibility study report.

b) The maximum profit margin on equity of investors shall be equal to the minimum profit margin on equity of investors according to point a, Clause 1 of this Article plus the inflation rate.

The inflation rate is determined based on the average Consumer Price Index (CPI) over the past ten years as published by the General Statistics Office of Vietnam, taking into account the exclusion of years with significant CPI fluctuations.

2. Based on the economic and social effectiveness of the project as stipulated in Section IV Model No. 01 Appendix II on the pre-feasibility study report for PPP projects and Section IV Model No. 01 Appendix III on the feasibility study report for PPP projects issued together with Decree No. 35/2021/NĐ-CP, the project preparation unit shall propose the equity ratio and loan capital in the financial plan that is appropriate, ensuring the project's economic and social effectiveness and financial efficiency.

Article 8. Operating Costs of the Project

1. Operating costs of the project include management, operation, and maintenance costs of the facility.

2. Management, operation, and maintenance costs of the facility shall be implemented in accordance with the guidelines of the Minister of Construction on determining maintenance costs for construction works; the regulations of the Minister of Transport on managing operations and maintenance of road works and regular management and maintenance standards for roads; other costs (if any) shall be based on the maintenance procedures for expressway facilities, legal regulations on managing operations and maintenance of expressway facilities.

Article 9. Plan for Recovery of Investment Capital and Investor Profits

1. Investors and project enterprises have the right to charge tolls or fees for using expressway services in accordance with legal provisions and contractual agreements already signed.

2. In cases where investors and project enterprises are allowed to collect other revenues (if any) in accordance with legal provisions, such revenue must be updated in the project's financial plan.

3. Units preparing the pre-feasibility study report and feasibility study report shall determine the project's revenue annually, including basic level revenue, maximum level revenue, and minimum level revenue.

4. Expected revenue is determined based on:

a) Collection rates; collection targets; anticipated price and fee increase schedules in accordance with PPP laws, pricing, and fee laws;

b) Traffic volume forecast results.

Traffic volume forecast results are determined based on: traffic volume investigation and survey results at the time of preparing the pre-feasibility study report and feasibility study report; data collection results about traffic volume and composition from the database of management organizations operating the roads and other stored data (if any) on the routes included in the project and related operational routes; current status and socio-economic development plans, transportation network planning, static transportation system, public transportation system, connection planning, and transportation network planning; specific conditions and nature of the project and other relevant contents.

Units preparing the pre-feasibility study report and feasibility study report shall select traffic forecasting methods to provide forecast results under high, medium, and low economic growth scenarios for comparison and selection purposes.

Article 10. Review of the preliminary feasibility study report and feasibility study report of the project

The review of the preliminary feasibility study report and feasibility study report of the project shall be carried out in accordance with Article 15 of Decree No. 35/2021/NĐ-CP. The consulting review must ensure specific contents within the scope of the review tasks, including financial and technical content according to the requirements of the agency or unit hiring the consulting review.

Chapter III

METHODS AND EVALUATION CRITERIA FOR BID DOCUMENTS AND SAMPLE OPERATING AND MAINTENANCE CONTRACTS

Article 11. Principles for applying methods and evaluation criteria for bid documents

The evaluation of bid documents for highway operating and maintenance projects shall be conducted in accordance with the following provisions:

1. Method of evaluating bid documents: carried out in accordance with the provisions on the method of evaluating bid documents under Section 3, Chapter III of the Law on Investment under Public-Private Partnership (PPP Law), Chapter IV of Decree No. 35/2021/NĐ-CP, Circular No. 09/2021/TT-BKHĐT dated November 16, 2021 issued by the Minister of Planning and Investment guiding the selection of investors to implement public-private partnership investment projects and investment projects using land.

2. Evaluation criteria for bid documents: carried out in accordance with Appendix I, Appendix II, and Appendix III attached to this Circular.

The evaluation criteria must be publicly disclosed in the tender invitation documents. During the bid document evaluation process, the evaluation criteria stated in the tender invitation documents must be adhered to.

Article 12. Principles for applying sample operating and maintenance contracts for expressway projects

The operating and maintenance contract for expressway projects signed between the contracting authority and the investor, project enterprise shall be implemented in accordance with the sample operating and maintenance contract for expressway projects stipulated in Appendix IV attached to this Circular. During the negotiation and completion of the contract, the parties may propose amendments and supplements to the contract content ensuring that it does not change the basic content of the bid documents as prescribed in Clause 3, Article 64 of Decree No. 35/2021/NĐ-CP and does not contravene the provisions of the tender invitation documents, laws on public-private partnership investment, and relevant laws.

Article 13. Operating and Maintenance Contract for Expressway Projects

1. The project enterprise for operating and maintenance must implement measures to ensure the implementation of the project contract in accordance with Article 48 of the PPP Law.

2. The operating and maintenance contract for expressway projects includes: the agreement document of the parties regarding the contract, general conditions of the contract, specific conditions of the contract, and annexes to the contract (if any).

a) Agreement document of the parties regarding the contract

The agreement document of the parties regarding the contract includes: legal basis for signing the project contract; general information about the parties signing the project contract (contracting authority, investor, project enterprise); contract documents and legal priority order; duration of the contract and the effective date of the contract.

b) General conditions of the contract

The general conditions of the contract include common contents prescribed in operating and maintenance contracts for expressway projects.

c) Specific conditions of the contract

The specific conditions of the contract clarify the corresponding contents to the general conditions of the operating and maintenance contract for expressway projects when applied to specific projects.

d) Annexes to the contract

Annexes to the contract are part of the project contract. In necessary cases, the contract may have annexes attached to detail certain clauses of the contract.

3. Investors and project enterprises are responsible for managing, operating, exploiting, and maintaining highway infrastructure assets in accordance with the law and the signed contracts. Management, operation, exploitation, and maintenance costs shall be borne by the investors and project enterprises, except where otherwise provided by law.

Article 14. Value and Deadline for State Budget Payment

1. The value of state budget payment under the project contract shall be based on the decision approving the result of investor selection.

2. The deadline for paying the value of state budget payment:

a) In case the value of state budget payment is less than 1,000 billion VND: the investor and the project enterprise shall pay at most twice; in which the first time shall pay at least 50% of the value of state budget payment within one month from the date the contract becomes effective, the second time shall pay the remaining value of state budget payment within three months from the date the contract becomes effective;

b) In case the value of state budget payment exceeds 1,000 billion VND: the investor and the project enterprise shall pay at most three times; in which the first time shall pay at least 40% of the value of state budget payment within two months from the date the contract becomes effective, the second time shall pay at least 30% of the value of state budget payment within four months from the date the contract becomes effective, the third time shall pay the remaining value of state budget payment within twelve months from the date the contract becomes effective;

c) The project contract shall specify the progress and the value of state budget payment in detail.

3. The investor and the project enterprise must disburse the minimum capital equivalent to 15% of the total investment amount of the project in the first payment. Subsequent disbursement of capital shall be carried out according to the project contract.

4. Handling of late payment of state budget payment value

a) The project contract shall specify the handling measures in case the investor and the project enterprise delay the payment of the state budget payment value, including fines for delayed payment and other measures prescribed by law.

b) The fine for delayed payment shall be implemented as follows: the rate of fine for delayed payment is 0.03%/day calculated on the amount of delayed payment; the period for calculating the fine for delayed payment shall be continuously counted from the day following the day when the delayed payment occurs until the day immediately preceding the day when the payment is made into the state budget.

5. The investor and the project enterprise shall be considered to have seriously violated the obligations stipulated in the contract as provided for in point d, Clause 2, Article 52 of the Public-Private Partnership Law in case they fail to fully pay the entire value of state budget payment within three months from the date the contract becomes effective if the value of state budget payment is less than 1,000 billion VND; within twelve months from the date the contract becomes effective if the value of state budget payment exceeds 1,000 billion VND.

Chapter IV

IMPLEMENTING PROVISIONS

Article 15. Effectiveness

1. This Circular takes effect from March 1, 2024.

2. In case the legal normative documents referred to in this Circular are amended, supplemented, or replaced, the provisions of the amended, supplemented, or replaced legal normative documents shall apply.

3. Amend and supplement Article 1 of Circular No. 09/2022/TT-BGTVT dated June 22, 2022, guiding certain contents regarding the method and criteria for evaluating tender documents to select investors under the public-private partnership model and the model BOT contract in the transport sector as follows:

"This Circular guides certain contents regarding the method and criteria for evaluating tender documents to select investors under the public-private partnership model (excluding the method and criteria for evaluating tender documents to select investors under the public-private partnership model and the type of management-contracting highway operation contract) and the model BOT contract in the transport sector."

Article 16Implementation Organization

The Head of the Ministry's Office, the Inspector General of the Ministry, the Heads of Departments, the Directors of the Bureaus under the Ministry of Transport, the Directors of Project Management Boards under the Ministry of Transport, the Directors of Provincial Transport Departments, the Heads of agencies, units, and individuals concerned are responsible for implementing this Circular./.