Financial management mechanism of investment projects under the public-private partnership method

(Chinhphu.vn) - Decree No. 312/2025/ND-CP of the Government clearly stipulates the financial management mechanism for projects under the corporate partnership method (PPP project).

Decree No. 312/2025/ND-CP stipulates the financial management mechanism of investment projects under the public-private partnership method.

The Government issued Decree No. 312/2025/ND-CP stipulating the financial management mechanism for investment projects under the public-private partnership method and the payment and settlement mechanism for projects applying the BT contract type.

Principles of building financial plans for PPP projects

The Decree stipulates that the financial plan of a PPP project must fully reflect the legal expenses and revenues as prescribed during the investment preparation, investment implementation and operation stages of the PPP project, except where otherwise provided by law.

Revenue and expenses of a PPP project must be managed, monitored, declared and accounted for independently from other business activities of the investor (in case the project enterprise is not established), other business activities outside the scope of the PPP project contract of the PPP project enterprise as prescribed in Point b, Clause 22, Article 2 of the Law amending and supplementing a number of articles of the Law on Bidding, the Law on Investment under the Public-Private Partnership method, the Customs Law, the Law on Value Added Tax, the Law on Export Tax and Import Tax, the Investment Law, the Law on Public Investment, the Law on Management and Use of Public Assets No. 90/2025/QH15 (Law No. 90/2025/QH15).

The state capital used in PPP projects as prescribed in Point a and Point c, Clause 1, Article 69 of the PPP Law is not included in the investor's capital recovery and profit plan.

Value added tax corresponding to the state capital portion as prescribed in Point a and Point c, Clause 1, Article 69 of the PPP Law shall not be included in the investor's capital recovery and profit plan.

Revenue for calculating the financial plan is the total revenue from providing public products and services of the PPP project, other revenue is specified in the PPP project contract.

Financial indicators of the financial plan are calculated on the basis of after-tax cash flows discounted at the weighted average discount rate of interest rates on capital mobilization sources and the rate of return on investor equity.

The currency used in the financial plan is Vietnamese Dong.

Financial plan content

The financial plan in the Pre-Feasibility Study Report or Investment Proposal Report, Feasibility Study Report or Construction Investment Economic -Technical Report includes the following contents:

- Preliminary total investment, total investment of PPP project;

- Capital sources for implementing PPP projects;

- Estimated costs during the project's operation period;

- Plan to recover investment capital and profits of investors for project groups applying the mechanism of direct fee collection from users or organizations that purchase public products and services or applying other business forms according to the provisions of law;

- Plan to recover investment capital and investor's profit for project groups applying the State payment mechanism based on the quality of public products and services (projects applying BTL and BLT contracts);

- Project payment plan applies BT contract type with payment from state budget;

- State budget payments (if any) for PPP projects implemented in the form of O&M contracts;

- Indicators for analyzing and evaluating the feasibility of financial plans (not applicable to projects applying BT contract type);

- Incentive and guarantee proposals (if any).

Decree No. 312/2025/ND-CP clearly stipulates: Capital sources for implementing PPP projects of investors and PPP project enterprises; management, use and payment of state capital in PPP projects; settlement of investment capital for works and infrastructure systems of PPP projects...

Investor's equity

Regarding the investor's equity capital, the Decree stipulates that the investor is responsible for contributing equity capital to participate in the PPP project according to the provisions of Article 77 of the PPP Law. During the implementation of the PPP project contract, there is a change in the structure of the owner's equity capital and the capital mobilized by the investor or PPP project enterprise without changing the investment policy, bringing higher efficiency in finance, economy and society. The parties in the PPP project contract are allowed to review and amend the provisions on the capital structure in the PPP project contract.

Investor's profit

Return on equity of investors (except BT projects) is regulated as follows:

The investor's return on equity ratio calculated during the preparation, appraisal and approval phase of the Pre-feasibility Study Report or Investment Proposal Report, Feasibility Study Report or Construction Investment Economic-Technical Report is determined based on the profit ratio framework of the PPP project issued by the ministry or branch and the return on equity ratio of other similar PPP projects in terms of PPP project contract type, field, scale and nature of the project that has been or is being implemented (if any).

The rate of return on equity is determined according to the results of the bidding for investor selection. In case the PPP project applies the form of investor appointment or investor selection in special cases to select the investor, the competent authority approving the project decides the rate of return on equity in the financial plan of the PPP project.

Return on investor's equity is calculated from the time the project is permitted by the competent authority to come into operation and exploitation.

The Decree clearly states that the rate of return on equity of investors implementing BT projects paid by the state budget shall comply with the provisions of Chapter VI of this Decree.

Principles of payment for public investment capital, regular expenditure capital, capital from legal revenue sources for investment...

The Decree stipulates that state capital in PPP projects is disbursed to PPP project enterprises or investors (in case no project enterprise is established) when competent authorities assign capital plans and budget estimates according to law provisions.

State capital disbursed to PPP project enterprises and investors must not exceed the state capital in the PPP project (or adjusted state capital) approved by competent authorities and specified in the PPP project contract. The total state capital paid to PPP project enterprises and investors during the year must not exceed the annual capital plan and annual budget estimate allocated for the assigned PPP project.

Public investment capital to support the construction of project items and infrastructure systems specified in Point b, Clause 5, Article 70 of the PPP Law shall only be paid for the value of completed work volume confirmed by the Agency assigned to manage state capital in the PPP project and according to the ratio of capital sources, value, progress, and payment conditions specified in the PPP project contract, in accordance with the medium-term and annual public investment capital plan approved by competent authorities.

State capital is paid to PPP project enterprises and investors providing public products and services under BTL contracts and BLT contracts from the time the public products and services are provided according to the agreement in the PPP project contract. The periodic payment value is based on the actual volume and quality of public products and services provided by the PPP project according to the provisions of the PPP project contract, in accordance with the annual public investment capital plan, regular expenditure estimates approved by competent authorities, and revenue from the PPP project (if any).

The agency assigned to manage state capital in PPP projects is responsible before the law and competent authorities for determining that PPP project enterprises and investors have ensured disbursement conditions as prescribed in this Decree and the provisions of the PPP project contract; the value of the proposed payment, supervision and determination of the proportion of equity capital disbursed as prescribed in the PPP project contract; the legality of documents in the dossier provided to the payment agency and competent authorities.

The annual payment period of state capital in PPP projects is implemented according to the provisions of the law on state budget and the law on public investment.

The payment time of the payment agency shall not exceed 02 working days from the date of receipt of the complete payment request documents of the Agency assigned to manage state capital in PPP projects according to regulations...

Phuong Nhi

Source: https://baochinhphu.vn/co-che-quan-ly-tai-chinh-du-an-dau-tu-theo-phuong-thuc-doi-tac-cong-tu-102251209144224178.htm