Chapter V
IMPLEMENTATION OF PPP CONTRACTS
Section 1. BUILDING OF WORKS AND INFRASTRUCTURE SYSTEMS
Article 56. Preparation of building sites
Provincial People's Committees shall assume the prime responsibility for, and cooperate with competent authorities and contracting entities in, arranging compensation, support and resettlement, and completing procedures for land allocation, land lease, and building site handover for project implementation purposes in accordance with the law on land, PPP and other related contracts.
Article 57. Formulation, assessment and approval of the design following the basis design and cost estimate
1. Based on the feasibility study report and the provisions of the PPP contract, the PPP project enterprise must perform one or more of the following tasks:
a) Making the construction design after the basic design. With respect to sub-projects or items using public investment capital, making the cost estimate and sending it to the construction-specialized authority in accordance with law on construction for assessment purposes;
b) Making the design. With respect to sub-projects or items using public investment capital, making the cost estimate and sending it to the specialized authority in accordance with other law for assessment purposes.
2. PPP project enterprises shall approve designs and cost estimates specified in Clause 1 of this Article and send the following documents to the contracting authority for monitoring and supervisory purposes:
a) Approved design documents and cost estimates;
b) Design and cost estimate assessment documentation of specialized authorities.
Article 58. Selection of contractors bidding for execution of PPP projects
PPP project enterprises must adopt uniform regulations on contractor selection to be applied to enterprises according to the following principles:
1. Ensure fairness, transparency and economic efficiency;
2. Ensure these regulations do not affect or negatively impact national defense and security, state secrets, national or community interests and interests of competent authorities and contracting authorities;
3. The selected contractor must satisfy all capacity and experience requirements, and have feasible solutions for the execution of the package or project; take responsibility for fulfillment of quality and progress requirements of the package under the contract signed with the PPP project enterprise, including liability clauses by which the selected contractor are bound if the quality of the construction work or infrastructure system does not meet requirements set out in the PPP contract. PPP project enterprise shall be responsible for the quality and progress of implementation of the project;
4. Prefer domestic contractors bidding for the work that domestic contractors can undertake;
5. Only hire foreign workers if domestic workers are unqualified.
Article 59. Management and supervision of quality of construction works and infrastructure systems
1. The PPP project enterprise shall be responsible for the management and supervision of the quality, and the acceptance testing of the entire work and infrastructure system in accordance with law.
2. In the course of development and construction of the contractual work or infrastructure system, the contracting authority shall assume the following responsibilities:
a) Conduct the inspection of the PPP project enterprise's supervision of the process for construction of works and infrastructure systems;
b) Conduct the inspection of compliance with engineering and construction procedures, standards and regulations for works and infrastructure systems;
c) Conduct the quality assessment of construction parts, items and the entire work and infrastructure system whenever there is any doubt about quality, or upon the competent regulatory authority's request;
d) Request the PPP project enterprise to demand the contractor’s adjustment or suspension of construction when seeing that the quality of the work fails to conform to requirements.
3. The contracting authority may hire a consultant to assist in performing their responsibilities specified in Clause 2 of this Article.
4. Costs for hiring quality accreditation consultants and other related costs shall be subject to the following regulations:
a) In case where the contracting authority concludes that the quality of the work or infrastructure system fails to meet the requirements set forth in the contract through the fault of PPP project enterprise or the contractor, the PPP project enterprise shall be responsible for payment of these costs;
b) In case where the contracting authority concludes that the quality of the work or infrastructure system meets the requirements set forth in the contract, or concludes that it does not meet the requirements set out in the contract without fault of the PPP project enterprise or the contractor, the contracting authority shall use the project implementation expenses specified in Clause 3 of Article 73 in this Law for payment.
Article 60. Settlement of expenses for investment in works and infrastructure systems
1. After completing the work or infrastructure system, the contracting authority shall carry out the settlement of public capital invested in the PPP project as follows:
a) In case where public capital invested in a PPP project is managed and used in accordance with Point a of Clause 5 of Article 70 and Clause 2 of Article 72 of this Law, the contracting authority and the PPP project enterprise shall carry out the settlement of public capital invested in the PPP project according to the provisions of law in the same manner as public investment projects;
b) In case where public capital invested in a PPP project is managed and used in accordance with Point b of Clause 5 of Article 70 herein, the contracting authority shall make a financial statement of disbursements to the PPP project enterprise audited by an auditing body as a basis for settlement of capital invested in the PPP investment project. Public capital invested in a PPP project which is qualified for settlement must not exceed the state capital specified in the contract.
2. After completion of the work or infrastructure system, the contracting authority and the PPP project enterprise shall carry out the settlement of public capital invested in construction of the work or infrastructure system. The settlement value of investment capital for construction of the work or infrastructure system or the settlement value of investment capital in projects without construction components shall be determined on the basis of the contract already in effect.
3. The contracting authority shall reach an agreement with the PPP project enterprise in the contract on the selection of a qualified and experienced independent auditing organization to conduct the audit of capital invested in construction of the work or infrastructure system.
4. The Government shall elaborate on this Article.
Article 61. Certification of completion of a construction work and infrastructure system
1. After completion, the PPP project enterprise shall undertake the acceptance testing of the work or infrastructure system in accordance with construction law or other relevant legislation as a basis to prepare request documentation for completion certification.
2. Based on the documentation submitted to request the certification of completion of the work or infrastructure system specified in Clause 1 of this Article, the contracting authority shall check before granting the certificate of completion to the PPP project enterprise. In case where the PPP project enterprise completes the construction phase ahead of time or saves investment costs, the certification of completion of the work or infrastructure system shall not affect the contract term or the rates of prices and charges of public products and services defined in the contract.
3. The Government shall regulate documentation requirements and time limit for certification of completion of works and infrastructure systems.
Section 2. MANAGEMENT AND OPERATION OF WORKS AND INFRASTRUCTURE SYSTEMS
Article 62. PPP project management
The management of a construction work or infrastructure system and other assets during the period of implementation of PPP projects shall comply with the provisions of this Law, other regulations of relevant laws and terms and conditions of PPP contracts.
Article 63. Requirements for operation of works and infrastructure systems
1. Except for the case specified in Clause 2 of this Article, PPP project enterprises may operate infrastructure systems from the date on which the contracting authority certifies their completion as prescribed in Article 61 of this Law.
2. As for PPP projects using O&M contracts, PPP project enterprises shall operate works or infrastructure systems from the effective date of PPP contracts.
Article 64. Provision of public products and services
1. During the period of operation of works or infrastructure systems, PPP project enterprises shall assume the following responsibilities:
a) Implement the rights and obligations to provide public products and services, and other agreements made in the contract;
b) Ensure the use of works and infrastructure systems according to contractual terms and conditions;
c) Equally treat all users of public products and services provided by PPP project enterprises; prohibit refusing to provide public products or services to users;
d) Receive and promptly handle user’s opinions about the quality of public products and services provided by PPP project enterprises;
dd) Periodically repair and maintain, and ensure the safe operation of works or infrastructure systems according to the design or process agreed upon in the contract.
2. Competent authorities or contracting authorities can cooperate with PPP project enterprises in carrying out the responsibilities specified in Point d of Clause 1 of this Article.
Article 65. Public product and service prices and charges
1. Prices or charges of public products and services, conditions, procedures and adjustments shall be specified in the PPP contract according to the principle of ensuring the interests of the investor, the PPP project enterprise, the user and the State, providing investors or PPP project enterprises facilitation to recover capital and make profits. The pricing plan and price bracket of public products and services according to the term of a PPP project contract must specify the starting price and the price varying in specific periods to ensure accuracy, completeness, public disclosure and transparency of price factors.
2. The application of measures to support public product and service prices and charges shall comply with the provisions of law.
3. The agreement on and adjustment of public product and service prices and charges for each period in a PPP project contract must comply with the law on prices and charges.
4. If there is any change in prices and charges of public products and services, the dissemination of information about such adjustment shall be regulated as follows:
a) No longer than 10 days before the application of adjusted prices and charges of public products or services, contracting authorities shall make public disclosure of information as prescribed in Article 9 of this Law;
b) PPP project enterprises shall list adjusted prices and charges of public products and services at the locations where public products and services are provided in accordance with the law on prices and charges.
Article 66. Supervision of quality of public products and services
1. PPP project enterprises must ensure and take responsibility for the quality of public products and services under PPP contracts.
2. Contracting authorities shall be responsible for the supervision of the quality of public products and services provided by PPP project enterprises under PPP contracts.
3. In case where the quality of public products and services does not meet the requirements under a PPP contract, the contracting authority shall request the PPP project enterprise to take remedial action within the time limit specified in the contract; in case the PPP project enterprise’s failure to take, or delay in taking, remedial action, it shall apply measures to handle violations in the contract.
4. The contracting authority may hire a consultant to assist in performing their responsibilities specified in Clause 2 of this Article. Consultant hiring costs shall be paid under the provisions of Clause 4 of Article 59 in this Law.
Section 3. TRANSFER OF CONSTRUCTION WORKS OR INFRASTRUCTURE SYSTEMS, AND DISCHARGE OF PPP CONTRACTS
Article 67. Transfer of construction works and infrastructure systems
1. The transfer of construction works and infrastructure systems, and the determination of the quality and value of construction works and infrastructure systems prior to the transfer shall comply with the terms and conditions of PPP contracts. The residual value of the transferred work and infrastructure system shall be incorporated into state assets and state budget in accordance with the law on management and use of public assets and state budget.
2. Procedures and processes for disposal and management of the transferred property shall be subject to provisions laid down in law on management and use of public assets.
3. The Government shall elaborate on clause 2 of this Article.
Article 68. Discharge of PPP contracts
1. PPP contracts shall be discharged as follows:
a) In case where the contracting parties have already fulfilled their contractual obligations, the contracting parties shall certify the fulfillment and termination of their rights and obligations;
b) In case where a contract is terminated before expiry as specified in Clause 2 of Article 52 of this Law, the contracting parties shall certify the completed obligations and the parties' liabilities for the unfinished work.
2. The time limit for discharge of a PPP contract shall be agreed upon by the contracting parties, but not exceeding 180 days from the date on which the contracting parties fulfill their contractual obligations or the date on which the parties agree to terminate the contract before its expiry.
3. In case where costs have incurred when the contract is discharged as prescribed in Clause 1 of this Article, the discharge of the contract must include the determination of the obligations of the contracting authority and the PPP project enterprise to the costs incurred.
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