THE PRELIMINARY SESSION OF
INVESTMENT LEGAL SUPPORT FORUM 2024 - 1ST SEMESTER
INVESTMENT THROUGH PUBLIC-PRIVATE PARTNERSHIP METHOD UNDER NEW CONTEXT OF HO CHI MINH CITY
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Following up on the issues raised at the 2023 Investment Legal Support Forum, the 2024 Legal Support Forum officially kicked off on March 5, 2024, consisting of 2 sessions. Specifically, the 2024 Investment Legal Support Forum - Session 1 focused on discussing topics revolving around the theme "Investment through Public-Private Partnership (PPP) Method under the New Context of Ho Chi Minh City."
Based on the synthesis report of the previous forum's opinions and the results of surveys conducted within the business community, on the morning of April 12, 2024, in Ho Chi Minh City, the Vietnam International Arbitration Centre (VIAC) collaborated with the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC) under command of the People's Committee of Ho Chi Minh City to conduct the Preliminary session. The session was highly successful with the participation of delegates from foreign business associations, investment consulting firms, governmental agencies, and experts in the field.
The Preliminary session aimed to gather opinions from foreign business associations and relevant investors on two main topics:
Choosing type of contracts and requests for guarding interests of the parties in the PPP contracts
Enhancing the role of private sector in order to effectively implement PPP projects in Ho Chi Minh City
Mr. Vu Tien Loc - Member of the National Assembly, President of VIAC represented the organizer to give the Opening Remarks. He assessed the current situation with the implementation of Resolution No. 98 in Ho Chi Minh City. Mr. Loc acknowledged that Resolution No. 98 is a groundbreaking document, which created a "leap" for the remarkable development of Ho Chi Minh City. However, the provisions of Resolution No. 98 set many precedents beyond the current regulations nationwide, which partly confuses investors and competent authorities in implementing and applying these provisions. Therefore, the Investment Legal Support Forum is an effective platform for investors to share difficulties and challenges in investing and conducting business activities in Vietnam. It can be said that this Forum is a huge effort to actualize VIAC's core motto "legal support for investors". It is also a synergy product of VIAC and ITPC, under the guidance of the People's Committee of Ho Chi Minh City.
Mr. Vu Tu Thanh - Deputy Executive Director, US-ASEAN Business Council, VIAC's listed arbitrator - representatives of Leader of the Working Group
Mr. Ngo Thanh Tung – Partner of VILAF Law Firm, VIAC's listed arbitrator - representatives of Leader of the Specialist Group
The Preliminary Session was conducted in a dialogue format under the moderation of the representatives of Subgroups: Mr. Vu Tu Thanh - Deputy Executive Director, US-ASEAN Business Council - representatives of Leader of the Working Group and Mr. Ngo Thanh Tung – Partner of VILAF Law Firm, Arbitrator of VIAC - representatives of Leader of the Specialist Group. The working session received participation and exchanges from representatives of foreign business associations: Mr. Seck Yee Chung - Vice President of the Singapore Business Association in Vietnam (SCCV); Mr. Karasawa Masayuki - Resident Representative of the Japan International Cooperation Agency (JICA) in Ho Chi Minh City Branch; representatives from the European Business Association in Vietnam (EuroCham); and the Malaysia Business Chamber Vietnam. Leading experts with extensive experience in advising and working with investors in the field include Dr. Le Dinh Vinh - Director of Vietthink Law Firm, VIAC's listed arbitrator, and Ms. Hoang Nguyen Ha Quyen - Managing Partner of LNT Law Firm & Member, Arbitrator of VIAC, Mediator of the Vietnam Mediation Center (VMC), also attended and shared their opinions.
Mr. Seck Yee Chung - Vice President of the Singapore Business Association in Vietnam (SCCV)
Mr. Karasawa Masayuki - Resident Representative of the Japan International Cooperation Agency (JICA) in Ho Chi Minh City Branch
Dr. Le Dinh Vinh - Director of Vietthink Law Firm, VIAC's listed arbitrator
Ms. Hoang Nguyen Ha Quyen - Managing Partner of LNT Law Firm & Member, VIAC's listed arbitrator, Mediator of the Vietnam Mediation Center (VMC)
The participants provided their assessments of the potential of new projects under Resolution No.98. Accordingly, the Resolution allows for the implementation of projects in the fields of healthcare, education, sports, and culture (which is a new point compared to the current Law on PPP). This provision creates new incentives for the development of the Culture, Sports, and Tourism sectors. However, it leaves open questions regarding the rights of investors in managing and operating projects, as well as the mechanism for investors to recover their capital. For example, currently, there are no specific regulations or detailed guidelines regarding the investor's management and operation period, rights, and obligations, which differ from projects in sectors already defined in the Law on PPP. Therefore, investors felt confused and were not ready to invest.
Ms Mai Phong Lan - Representative of Department of Planning and Investment of Ho Chi Minh City
Dr. Vo Hoang Nhan - Representative of Department of Health of Ho Chi Minh City
The current Law on PPP has provisions regarding profit and risk-sharing mechanisms; however, investors have not found satisfactory answers. Furthermore, in cases where revenue is lower than the financial plan, investors must undergo a rigorous audit process. Therefore, investors expect there should be a more reasonable mechanism in the future.
Regarding the types of PPP contracts, investors recommend that the authorities should consider applying various forms other than BOT and BT contracts to select investors. Because what investors literally aim for is a long-term cooperation and sharing model, not just a short-term focus like BT and BOT. Moreover, the current BOT contract modal contracts are basic, and somehow do not meet the requirements of investors. Therefore, it is necessary to request additional, detailed provisions in the BOT model contract, such as: obligations, responsibilities of the contracting authority, provisions related to investment capital and disbursement, revenue escalation mechanisms, reductions, etc., to ensure legal safety and minimize risks when implementing projects.
The opinions collected at the Preliminary Session will be processed and transferred to the Experts of Specialist Group of ILS Forum (including prestigious lawyers, specialists, arbitrators, and competent authority) to discuss and respond to the investors at the Plenary Session.
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