29/09/2017, 06:53 AM

Recently, Attorney Nguyen Thi Huynh, ATIM Law Firm has had an interview with CafeLand Newspaper on some legal issues related to investment forms.

What factors do forms of BT investment in exchange for infrastructure have making the real estate businesses very excited?

Regardless of what the background of enterprises are, the factor that attracts enterprises in PPPs in general and BT in particular is always the economic efficiency that the project brings. Investors will consider and evaluate both projects including BT projects that they will invest, build and transfer to the State and the land that the State uses to pay for investors. Accordingly, the commercial value and potential exploitation of the land used to pay is always targeted by the investor. Therefore, most of the land used for payments is usually land for housing projects development or commercial services (with very high commercial value), which are the objects of the real property enterprises.

Although there are positive aspects, the form of BT investment in exchange for infrastructure has always hidden the risks, causing losses and unfair, especially through the appointment of contractors; so what is your opinion?

The law allows the selection of contractor investing PPP projects under two forms, bidding or appointment of contractor.

Theoretically, appointment of contractor is considered less transparent and less competitive than the bidding, so it is only allowed in very limited circumstances such as having only one registered investor even though the original procedure announced is a opening bidding or only an investor can make due to trade secrets, technology compatibility or capital arrangements

Legally, regardless of whether the form of investment is bidding or designation, the law contains provisions to ensure that the ultimate goal is to select qualified investors (eg, criteria, methods of assessing competency, financial capacity of investors).

However, in reality, it is possible in the situation even though the contractor appointment has been followed in full compliance with the process, procedures, criteria, methods of assessment, etc. (often referred to as "compliance with the procedure")but the selected investor still does not have enough required capacity. In addition, we think that this risk can still occur with both open and non-exclusive bidding. Accordingly, it is not possible to blame the lack of transparency and inadequate legal frameworks, which, as the case may be, human factor is always important.

What is legal shortage in the BT project regulations making this type of transparency unclear? What is the condition as well as regulation?

It should be acknowledged that, in this form of investment, success, failure, or violation, is no longer a matter for the contracting parties itself, but also having the effect on the society as well as people directly receiving it, enjoying and using public services.

Thus, the responsibility of the State, a party to the contract, is enormous. The State must control to ensure that the investor constructs and handles the works of appropriate and timely quality, no fraud in the reports and determination of values, no fraud in the exploitation and fee-based business. However, the legal framework needs to ensure a balance between the need for control and the need to attract investment.

It is argued that the type of BT investment land exchange for infrastructure should be eliminated. What do you think about this argument?

This approach is slightly negative. Any model has pros and cons. The expectation of a perfect model for infrastructure development is very difficult to achieve, especially given that there are not many options available today as the state budget allocates more and more infrastructure works limited.