Vietnam - New Law On Public Investment.
Legal News & Analysis - Asia Pacific - Vietnam - Regulatory & Compliance
2 August, 2019
On 13 June 2019, the National Assembly passed a new Law on Public Investment (New Law on Public Investment), 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 (Current Law on Public Investment) as from 1 January 2020.
The New Law on Public Investment also amends a provision of Law No. 55/2014/QH13, entitled the Law on Environmental Protection, passed by the National Assembly of Vietnam on 23 June 2014 (Law on Environmental Protection).
Below are some highlights of the key changes under the New Law on Public Investment as compared to the Current Law on Public Investment.
(i) Removal of a number of public-private partnership (PPP) provisions
Under the New Law on Public Investment, a number of PPP provisions have been removed in comparison to the Current Law on Public Investment, 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).
However, the New Law on Public Investment confirms that the State’s part in a PPP project is still considered as a subject of public investment.
Furthermore, pursuant to the New Law on Public Investment, the feasibility study reports related to important national PPP projects shall not be governed by the PPP laws.
(ii) Exemption from in-principle investment decision
The New Law on Public Investment clarifies that emergency projects, investment preparation missions, planning missions, 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.
(iii) Adjustment of in-principle investment decision
The New Law on Public Investment 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.
(iv) Increasing decentralisation
The New Law on Public Investment provides a more favourable framework for ministries, central authorities, and local authorities in public investment activities than that of the Current Law on Public Investment.
To be specific, under the New Law on Public Investment, the MPI, other ministries, central authorities, and local authorities are able to appraise capital source and capital balance capacity of the investment projects and programs which fall under their authority. As of now, only the MPI and MOF are currently responsible for conducting such appraisals according to the Current Law on Public Investment.
Further, pursuant to the New Law on Public Investment, the local people’s committees, if assigned by the local people’s council, may grant in-principle investment decisions for a number of types of group-B and group-C projects which are currently exclusively reserved matters for the local people’s councils.
(v) Time schedule for implementation and disbursement of capital in public investment plans
Under the New Law on Public Investment, the capital provided in public investment plans for a medium-term 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
For public investment projects, the New Law on Public Investment 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