Resolution 437/NQ-UBTVQH14 in 2017 on tasks and solutions to continue to improve and accelerate the implementation of legal policies on investment and operation of traffic works in the form of construction - business contracts - Transfer (BOT) issued by the National Assembly Standing Committee

RESOLUTION

REGARDING SOME OBJECTIVES AND SOLUTIONS FOR CONTINUED IMPROVEMENT AND PROMOTION OF IMPLEMENTATION OF LEGISLATIVE INVESTMENT AND OPERATIONAL POLICIES FOR TRANSPORTATION PROJECTS DEVELOPED IN THE FORM OF BUILD - OPERATE - TRANSFER (BOT) CONTRACTS

NATIONAL ASSEMBLY’S STANDING COMMITTEE

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to Law on Surveillance Practices of National Assembly and People's Council No. 87/2015/QH13;

Pursuant to the Resolution No. 235/NQ-UBTVQH14 dated August 25, 2016 of the Standing Committee of the National Assembly on the surveillance program of the Standing Committee of the National Assembly in 2017 and the Resolution No. 321/NQ-UBTVQH14 dated December 22, 2016 of the National Assembly’s Standing Committee on the establishment of the Commission for Surveillance of "Implementation of legislative policies on investment and operation for transportation works developed in the form of build - operate - transfer (BOT) contracts”;

In the light of the Report No. 177/BC-DGS dated August 11, 2017 issued by the Commission for Surveillance of the implementation of legislative policies on investment and operation for transportation works developed in the form of build - operate - transfer (BOT) contracts under the control of the National Assembly’s Standing Committee;

HEREBY RESOLVES

Article 1. Overview

In support of the Surveillance Performance Report issued by the Commission for Surveillance of the implementation of legislative policies on investment and operation for transportation works developed in the form of build - operate - transfer (BOT) contracts under the control of the National Assembly’s Standing Committee. In recent years, legal documents on investment in the form of BOT contracts have made a first step to perfection. Many national significant traffic projects have been funded, upgraded and made a significant contribution to the implementation of the Party's guidelines and intentions to building a synchronous infrastructure system throughout our country, promoting the socio-economic development as well as strengthening national competitiveness. The implementation of the policy of mobilizing social resources, including those existing in the form of BOT contracts, has been proved correct, helping to reduce the burden of the state budget.

However, the set of legal documents and the process of commencing and executing transport projects in the form of BOT contracts still contain a lot of defects that need to be corrected. Details about these defects shall be given as follows:

Legal documents have not been issued in a timely, complete and synchronous manner; are not highly legitimate when the one having the highest legal effect is just a decree; some regulations are unclear, overlapping, and does not match the reality and international practices.

The selection of investment projects and order of investment preference are not reasonable. Because most of the road projects exist in the mode of improving and upgrading the existing sole major routes, road users’ rights of choice have not been guaranteed. As mobilized investment funds are still restricted, bank loans are the main funding resource. In addition, unstable policies have caused difficulties in attracting foreign investors.

The formulation, appraisal and approval of projects are still inadequate and lack transparency while the design and cost estimation expose shortcoming and are not coherent, causing increases in estimated project costs. Because most projects are tendered according to the bid appointment approach, the selection of contractors having insufficient resources leads to violations arising in the process of executing and operating these projects, causing loss and reduction in investment efficiency. Site clearance for the implementation of a number of projects has encountered many problems, lacked consistency and impacted the project progress. The neglected construction, supervision and construction quality control lead to a lot of projects failing to meet quality standards; there remain errors in project commissioning, acceptance testing and payment. The fulfillment of financial obligations to the project is still difficult, prolonged and lacks strict sanctions against investors who defer making full payments.

Legal regulations and actuality of collection of road tolls (charges), the location of toll booths are not reasonable, leading to some projects causing public frustration. There are inadequacies in the regulation and implementation of mechanism for ensuring publicity and transparency of project information. The lack of communication and propaganda campaigns entails a lack of consensus and misunderstanding in society about transport works under BOT contracts.

Causes of those problems and weaknesses: Regulatory authorities have acquired little experience; not fully address situations that arise in the implementation process; coordination and cooperation between agencies and units are not really effective while a sense of the state management responsibility is not high, i.e. undue care given to the state management tasks. Inspection and assessment is not regular and not timely and sanctions for probable violations are not strictly enforced. While the Government and specialized regulatory authorities have not actively reviewed, assessed and promptly amending or proposing amendments and supplements to complete legal provisions on investment made in the form of BOT contracts, it has allowed the commencement of transport investment projects under this type of contract. The Ministry of Transport is mainly responsible for defects and violations arising from investment projects under its decision-making authority. The Ministry of Finance is responsible for the issuance of circulars guiding the collection of fees and tolls (toll rates, agreement on the location of toll stations and toll supervision process) proved to be illogical and inappropriate. Local state authorities are responsible for problems and violations arising from projects under the local authority to make investment decisions, the poor implementation of propaganda and communication campaigns seeking consensus from the public on the selection of projects, agreements on the location of toll plazas, issues related to public security and order, and the slow progress in site clearance. Investors are responsible for any breach of laws and regulations arising during the project implementation process.

Article 2. Major duties and solutions

In order to improve regulatory policy and legal framework, ensuring the effective promotion of investment and operation of transport projects under BOT contracts, in particular, and public private partnership (PPP) agreements, in general, the National Assembly’s Standing Committee requests the Government and the Prime Minister to focus on the following key tasks and solutions:

1. Assessing the implementation of PPP investment models, including the BOT approach, over the past time to point out the advantages, weaknesses and issues, and then recommending effective actions or remedies.

Implementing solutions to promptly addressing shortcomings and weaknesses and seriously rebuking organizations and individuals for their responsibility for causing defects and violations. Presenting a general report to the National Assembly’s Standing Committee in the 2018’s final meeting session.

2. Continuing to study and complete the legal framework on investment in the form of BOT contracts as part of the legal framework on investment according to the PPP approach with the orientation towards the study and formulation thereof for submission to the National Assembly for promulgation, ensuring high legal effect, uniformity and consistency for the sake of these investment approaches.

Strictly regulating criteria for selection of projects qualified for investment in the form of BOT contracts in particular and PPP investment in general. Setting out additional regulations on criteria for assessing investors' financial capacity, studying regulations on equity levels relevant to the nature and characteristics of each project group. Reviewing regulations on the formulation, approval, and management of costs for development, construction and operation of traffic works in the form of BOT contracts, especially promptly issuing norms and unit prices and announcing market price indices according to actual condition. Providing detailed guidance on financial contents of investment activities. Setting additional regulations on sanctions on investors who have deferred fulfilling their financial obligations, publicizing and updating traffic flow, payback turnover, duration for collection of service charges, regulations on responsibility of investors for ensuring the quality of their projects after completion and transfer to the State, regulations on consultation mechanisms before making investment decisions, and methods for service users' sending feedbacks about services to state regulatory authorities. Regulating responsibilities of state regulatory authorities for implementing the investment and operational process for transport projects executed under BOT contracts.

3. Directing the Ministry of Transport and relevant authorities to review and complete the planning schemes for development of the synchronous transport infrastructure network nationwide. Deciding on investment in transport projects in order of priority suitable for each form of investment based on the advantages and characteristics of each region as well as the urgency of investment and connectivity of these projects, even in the transport system planning stage.

For road projects developed and executed in the form of BOT contracts, these investment approaches shall be applied to new routes to ensure the right of choice for people, avoiding being used for investment in the renovation and upgradation of existing sole main roads. In order to select investors and contractors, open and transparent bidding and tendering must be carried out in accordance with law and the bid appointment method must be held down to the minimum. Fully regulating and implementing the public disclosure and transparency for project information for the facilitation of the public review.

4. Having appropriate solutions to raising domestic and foreign capital for large-scale projects, projects that are behind schedule and are unlikely to continue. Adopting specific mechanisms and policies to attract foreign capital, support the development of human resources, science and technology. Studying solutions to promote capital market growth to mobilize long-term funding for projects. Promptly petitioning the National Assembly to approve amendments and supplements to relevant laws, ensuring investment attraction, especially foreign investors, for the rapid and synchronous development of the transport infrastructure system.

5. Directing relevant authorities to promptly finalize completed projects in order to determine the financial plan and timing of official service charge collection; removing difficulties and problems for investors; fulfilling commitments of the State to investors on the State's capital used for supporting land clearance and resettlement.

Completing the overall review regarding toll plaza location, charge discount and exemption policies at all road toll plazas, and strictly managing revenue with the aim of applying synchronous, timely and consistent solutions to ensuring the harmony of interests between the State, investors and users.

Adopting criteria for setting up toll plazas, setting appropriate prices, applying advanced technologies (e.g. automated non-stop toll plazas). In addition, it shall be necessary to promulgate a common standard framework as the basis for bidding to find service providers awarded automated non-stop toll collection service bids, avoiding the monopoly in service price collection, and monitoring revenues earned by toll plazas and ensuring the competitiveness, public disclosure and transparency in price collection activities. From 2019, uniformly using the automatic non-stop toll collection method for all national highways developed in the form of BOT contracts across the country.

6. Directing localities to actively cooperate with relevant ministries, sectoral administrations and investors in the site clearance process, ensuring public security and order, tightening the inspection and supervision to prevent overloaded vehicles, ensuring construction quality, smooth traffic, and preventing revenue loss, supporting job creation for project-affected people and putting forward appropriate resettlement plans.

7. In the coming time, continuing to inspect and examine the establishment, appraisal, approval, implementation and operation of BOT transport projects, in particular and PPP ones, in general, to ensure the transparency, efficiency, anti-corruption, prevention and control of extravagance, group benefits arising from project management activities.

8. Promoting communication, providing complete, accurate and truthful information according to the provisions of law on BOT investment projects, explaining and clarifying the needs for investment in projects to seek consensus from the population, and supporting the inspection and supervision of the project commencement, implementation and operation process.

Article 3. Implementation

1. The Government, the Prime Minister, Ministries, Ministerial-level agencies, Governmental bodies, People's Councils, and People's Committees at all levels shall, within the scope of their respective tasks and powers, take charge of implementation of this Resolution.

2. The National Assembly’s Standing Committee, the Economic Committee, the Committee for Ethnic Affairs and other National Assembly’s Committees, National Assembly’s Delegations and deputies of the National Assembly and People’s Councils at all levels shall, within their remit and jurisdiction, oversee the implementation of this Resolution.

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