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On June 18th, 2020, the National Assembly of Vietnam ratified the Law on Investment in the form of Public-Private Partnership (“PPP Law 2020”), which will take effect on January 1st, 2021.
The basis of PPP investment is the investment method made based on the limited-term cooperation between the state and the private investors through signing and implementing the PPP project contract to attract private investors to participate in the PPP project. 
The projects invested in the form of PPP are projects in important fields, which affect greatly the development of the socio-economic, national interest, public interest, and national security. In the process of implementing investment in the PPP project, project final settlement is considered to be a crucial part to evaluate the efficiency of each project.

Source: Internet

During the final settlement process, the state audit matter emerged whether to audit the whole PPP project or only audit the state capital in the project. Conceivably, the investment capital, private assets in PPP projects are not the subject of state audits. Article 69, Article 70 of PPP Law 2020 is defined clearly the final settlement process of the PPP project is divided into two following cases:

The first case: After completing the construction, infrastructure system, the signing authority shall execute the final settlement the public investment capital in the PPP project as follow:
  • State audit: In case the public capital in PPP project is managed and used by the state capital to support in building the construction, infrastructure system is arranged from the public investment capital and shall be implemented by “Splitting a PPP project into subprojects” method, the contracting authority and the PPP project enterprise shall make the final settlement of the public investment capital in the PPP project in accordance with the law as for public investment project.
  • Independent audit: In case public investment capital in PPP project is managed and used follow the form of “aligning state capital with specific items according to the rates, value, progress and conditions specified under the contract”, the contracting authority summarizes the contract’s disbursed value for PPP project enterprise which can use independent audit, as a basis to make the final settlement the public investment capital in PPP project. The finalized public investment capital must not exceed the designated state capital in the contract. 
The second case: After completing the construction, infrastructure, the contracting authority and the PPP project enterprise shall execute the final settlement the investment capital for constructing, infrastructure. The settlement value of investment capital for the construction, infrastructure or the project without the construction is determined based on the signed contract.

The contracting authority arranges with the PPP project enterprise in the contract about the selection of an independent audit unit that has capacity and experience to perform the audit of the investment capital for construction, infrastructure systems.
The provisions mentioned above of PPP Law 2020 have neutralized the interest of the state and the PPP project enterprise.
Besides some new points about PPP project settlement, the PPP Law 2020 also has other significant points that are evaluated as policies to attract private resources into PPP project as well as increase the efficiency of the PPP project.

Vietthink News./.

Last updated: 06/25/2021