Many bottlenecks
One of the notable items of the new decree is the regulation on the settlement method of BT projects. Accordingly, Decree 69 allows BT projects to be settled by other ways of legal public assets which were not mentioned in the Decision 23/2015/QD-TTG.
The other ways of legal public assets which are used to settle the BT projects include:
· Land and other assets related to the land of state agencies, public offices, armed forces units, party agencies, social-political organizations and other organizations established in accordance with the law.
· Public infrastructure and assets.
· Other public assets which are mentioned in Public Asset Management and Usage Law.
According to Decree 69, the price of the public assets, which are used in settlement with BT investors, must be equal to the value of the BT projects. In which, the price of public assets is the market price at the time of settlement, and the value of BT projects is determined based on the project auction.
Furthermore, the assets which are used in settlement for the BT projects must be listed and reflected in national budget in accordance with current laws.
According to La Van Thinh, Head of Public Asset Management Office, Ministry of Finance, the new decree helps fulfill the loopholes of the old regulations, resolve the bottlenecks which have remained in BT projects and prevent losses in public assets.
“The public auction process will help the government find the best investors offering lowest price and highest quality standards. The land and assets which are used in settlement for BT projects must be approved by the government. In the old regulations, the approvals were done by provincial authorities”, said La Van Thinh.
The Decree 69 includes stricter terms as there have been many projects which were just planned to take over public land. Now, to let the BT projects be settled by public land, the investors must follow the project model, join public auction and get government approval for using that land for settlement.
Loopholes Remain
According to Decree 69, the value of BT project will be determined by the public project auction. This term is considered a developed point of the new regulation which helps reduce the loss of public assets. The price of public assets is market price at the time of settlement and the value of project determined by public auction.
However, in practice, the barriers in implementation of this law still remain. Only projects which are announced by government are allowed to do project auctions to choose the investors. The other projects which are proposed proactively by investors are still processed and settled by the old methods. This means that not every public project is auctioned.
Furthermore, although Decree 69 allows government to use public land and assets in settlement for the BT projects, it does not govern the activities that the land will be auctioned to get money to pay for the BT projects. Over the last few years, the equilibrium between land price and project value has been a big problem in BT projects and has provided a key loophole for corrupt activities.
“The key thing here is the price of the public asset and value of BT project. Who are persons responsible for determining the value of the projects, who are the auditors, who are the appraisers appraising the quality of the projects when they are completed? Or do we just take the estimated value at the time we auctioned as the settlement price? Will the land which is along the BT project, such as a road, used in settlement for the BT project, and be determined by price of agricultural land or residential land? Will the price of this land be determined before the road is completed or after it’s done?”, said Dang Dung Vo.
According to Dang Hung Vo, the new decree looks like “old wine in a new bottle”. The 2013 Land Law allows auctioning the land to get money to develop infrastructure projects, but in BT projects, it only governs the authority to approve the land transfer, but does not mention the method to determine the value of the land and infrastructure projects. There have been many projects which were proactively proposed by investors and approved by provincial authorities to take advantage of this legal loophole.
