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The Government Office has issued Announcement No. 511/TB-VPCP, outlining the conclusions of the Standing Government Committee regarding the draft Decree detailing the implementation of projects under the Build-Transfer (BT) contract model.
According to the announcement, the development and issuance of the legal framework must be based on practical requirements, drawing deeply from past shortcomings to design and formulate policies that ensure a comprehensive overhaul of implementation and payment methods for investors.
The aim is to maximize the resolution of bottlenecks and challenges in implementation, meeting the practical need for flexibility to attract investors while ensuring stringent measures to prevent policy exploitation leading to state asset losses.
The land fund for payment refers to land subject to recovery, with the investor advancing funds for site clearance. Land allocation or lease can only proceed once conditions stipulated by land laws are met. The state budget for investor payments, sourced from the auction of public assets, is not to be included in the medium-term public investment plan.
“The projected value of the land fund for payment must not exceed the approved total investment of the BT project. The provision for a maximum 10% variance in the projected land value payable to the investor is omitted due to lack of legal basis. Costs for site clearance advanced by the investor (including for both BT project sites and corresponding land funds) are to be deducted as compensation expenses approved by the state under the compensation, support, and resettlement plan,” the announcement clarifies.
The Standing Government Committee emphasizes that the land fund for investor payment must align with planning approved by competent authorities as per relevant laws. State-managed land funds, limited to small, interspersed plots within the land area intended for investor payment that cannot be separated into independent projects, may be used for BT project payments.
In cases where individual public assets or land within the intended payment fund can be separated into independent projects, they must be auctioned for payment through the state budget.
Approval of Three Land Payment Methods for BT Project Investors
The Standing Government Committee has approved three land payment methods for BT project investors as proposed by the Ministry of Finance.
The Ministry of Finance is tasked with reviewing the draft to clearly define criteria for selecting payment methods, such as: single payment upon completion for Group C projects; multiple payments corresponding to completion percentages for Group A, B, and C projects; and full land payment upon contract signing for large-scale projects, contingent on a commercial bank’s contract performance guarantee.
Provincial People’s Committees are to remit to the central budget according to the prescribed allocation ratio under the State Budget Law, with the Ministry of Finance overseeing compliance.
Loan interest is not to be specified in this Decree but governed by relevant laws. The Ministry of Finance is to carefully consider and study “revenue and expenditure recording” to ensure compliance and rigor in accordance with legal provisions.
