Vietnam - Draft Amendments To The Law On Public Investment.
Legal News & Analysis - Asia Pacific - Vietnam - Regulatory & Compliance
5 June, 2019
The Government of Vietnam is currently drafting a new law on public investment (Draft Law), which will replace the current Law No. 49/2014/QH13, entitled the Law on Public Investment, passed by the National Assembly of Vietnam on 18 June 2014 (Law on Public Investment). The Draft Law also amends a provision of the Law No. 55/2014/QH13, entitled the Law on Environment Protection, passed by the National Assembly of Vietnam on 23 June 2014 (Law on Environment Protection).
The National Assembly is expected to review and approve the Draft Law during its Seventh Session starting in May 2019. Below are some highlights of the key changes under the Draft Law as compared to the current Law on Public Investment.
(i) Exclusion of public-private partnership (PPP) provisions
The current Law on Public Investment includes provisions for investment in the form of PPP. However, these regulations have been removed from the Draft Law in order to avoid overlaps with another bill exclusively on PPP investments which is currently being drafted by the Ministry of Planning and Investment (MPI) and is expected to be submitted to the National Assembly for further consideration.
(ii) Classification of public investment projects
Under the Draft Law, some classification criteria have been changed in comparison with the current Law on Public Investment. Specifically, the amounts of investment capital used to classify important national projects, group-A projects, group-B projects, and group-C projects have been increased.
The Draft Law provides further that confidential projects related to defence and security matters shall be classified as group-A project regardless of the total investment capital.
(iii) Exemption from in-principle investment decision
The Draft Law clarifies that emergency projects, projects preparation, project planning, projects
in the national objectives program, and component projects of projects that have been granted the in-principle investment decision are exempted from obtaining an in-principle investment decision, whereas the current Law on Public Investment remains silent on this issue.
(iv) Adjustment of in-principle investment decision
The Draft Law introduces a legal framework for adjustment of the in-principle investment decision, while the current Law on Public Investment does not provide the same. The procedures and authority for adjusting the in-principle investment decision shall be similar to those for obtaining the initial in-principle decision.
(v) Increasing decentralisation
The Draft Law provides a more favorable framework for ministries, central authorities, and local governments in public investment activities than that of the current Law on Public Investment.
To be specific, under the Draft Law, the ministries, central authorities, and local governments are able to conduct the appraisal on capital source and capital balance capacity of the investment projects and programs without the involvement of the MPI and the Ministry of Finance (MOF). As of now, the MPI and MOF are instead currently responsible for conducting such appraisals according to the Law on Public Investment.
Further, pursuant to the Draft Law, the local people’s committees may grant in-principle investment decisions for several types of group-B and group-C projects which are currently reserved matters for the local people’s councils.
Time schedule for implementation and disbursement of capital in public investment plans
Under the Draft Law, the capital provided in public investment plans for a specific period must be implemented and disbursed no later than 31 January of the first year of the immediately preceding period, which is 12-month earlier than that of the current Law on Public Investment.
(vi) Amendment to the Law on Environmental Protection
The Draft Law provides that the issuance of in-principle investment decision shall be based on a preliminary environment impact assessment, instead of a full environmental impact assessment report as currently stipulated in the Law on Environmental Protection. The Government will give further guidance on the preliminary environment impact assessment.
For further information, please contact:
Mark Fraser, CEO/ Managing Partner, Frasers Law Company