On October 3, 2025, the Government promulgated Decree No. 257/2025/NĐ-CP detailing the implementation of projects under the Build–Transfer (BT) contract type (“Decree 257”). Overall, Decree 257 is based on the principle of facilitating the implementation of BT projects while maintaining oversight and management to prevent potential negative practices.
1. Detailed provisions on cases where investors may be appointed to expedite project implementation and promote socio-economic development, ensuring national interests
The Law on Investment under the Public-Private Partnership (PPP) Mode 2020 allows investor appointment (direct contracting) for projects requiring expedited implementation to promote socio-economic development and ensure national interests. Accordingly, Decree 257 specifies the list of projects eligible for investor appointment, including:
- Projects required to prevent, promptly remedy, or address consequences caused by natural disasters, fires, unexpected incidents, accidents, catastrophes, or other force majeure events;
- Nationally important projects eligible for investor appointment under a resolution of the National Assembly;
- Railway projects in accordance with the Law on Railways;
- Projects eligible for investor appointment under sectoral management laws;
- Projects for construction of infrastructure systems requiring accelerated implementation to serve national or provincial ceremonies or events;
- Other cases where investor appointment is necessary to meet requirements of schedule, quality, and investment efficiency.
In addition, Decree 257 also details cases where investors may be selected under special circumstances, including:
- Projects required to ensure national interests or fulfill national political tasks as directed in resolutions, conclusions, or official instructions from the Party Central Committee, Politburo, Secretariat, or senior Party and State leaders;
- Projects in strategic sectors or key national projects in science, technology, and innovation that require order placement or task assignment;
- Urgent projects that must be implemented immediately to ensure progress as directed by Government resolutions, decisions, directives, or official communications from Government leaders, or by provincial Party Committees, Standing Committees, or People’s Councils;
- Projects that must be implemented immediately to ensure technical and operational synchronization between connected infrastructures, as directed by the National Assembly or Government;
- Projects in sectors serving public order and social safety in accordance with the Law on Public Investment;
- Offshore wind power projects under the Law on Electricity where other investor selection methods cannot meet project requirements;
- Other projects with special conditions where applying other investor selection methods would fail to meet implementation requirements.
2. Detailed provisions on land fund payment for BT projects
Decree 257 provides flexible mechanisms for land fund payment for BT projects, as follows:
a) For projects with total investment equivalent to Group C projects under the Law on Public Investment, the entire land fund shall be paid once, after completion, acceptance, and readiness for operation in accordance with the Law on Construction.
b) For projects with total investment equivalent to Group A or Group B projects, the competent authority shall decide whether to apply one-time payment or phased land allocation corresponding to the percentage (%) of completed BT works or the value of completed independent components.
c) For independent projects with total investment of VND 20,000 billion or more, or component projects under a project of the same scale, or projects closely connected to nationally important or key national projects under resolutions of the National Assembly or Government, the competent authority may decide to allocate the entire land fund once after signing the BT contract to facilitate investor resource mobilization and ensure synchronized infrastructure development.
d) For other projects (not falling within the above categories) that require immediate implementation to ensure infrastructure connectivity and efficiency under competent authorities’ directives, the competent authority and investor (or project enterprise) may agree on one-time land fund allocation, provided that the investor (or project enterprise) fully complies with related legal obligations.
Alongside flexibility, Decree 257 strengthens investor obligations in cases of one-time land allocation for BT projects, specifically:
- The investor must submit a bank guarantee to the competent authority, with a minimum guarantee value equal to the BT project value as approved in the cost estimate decision. The guarantee must remain valid from the effective date of the BT contract.
- The competent authority shall revoke the entire land fund allocated to the investor (or project enterprise, if any) and collect the full guaranteed amount if the investor (or project enterprise) delays the commencement of construction by more than 24 months or the completion of the BT works by more than 24 months compared to contractual commitments. If the investor (or project enterprise) has already transferred the allocated land to another entity, it must reimburse that entity in accordance with their agreement.
- The investor (or project enterprise) shall be subject to contractual penalties equivalent to the late tax payment penalty rate under tax laws, multiplied by the total investment amount of the BT project.
- The investor (or project enterprise) shall compensate for all damages resulting from delayed or failed implementation of the BT project.
3. Guidance on auctioning land funds and public assets to generate State budget revenue for BT project payments
The Law on PPP Investment (as amended in 2024 and 2025) does not allow direct payment to BT projects using public assets. Instead, it provides for payment from the State budget, sourced either from public investment funds or proceeds from the auction of land-use rights or public assets. Accordingly, Decree 257 provides guidance on auctioning land-use rights and public assets to generate State budget revenue for BT project payments, as follows:
a) The location and area of land funds or public assets intended for auction must be specified in the pre-feasibility study report or the proposal for investment policy approval of the BT project paid by the State budget.
b) Proceeds from the auction of land-use rights or public assets shall be remitted to the State budget to pay BT project investors and shall not be included in the medium-term public investment plan.
c) If there is any change in the land fund or public assets intended for auction compared with the contents approved in the BT project’s investment policy decision, the following shall apply:
- If the change in boundary or area arises due to adjustments to the general, sub-zone, or detailed planning or due to changes in the arrangement and disposal plan for public assets, the competent authority shall update such information in the feasibility study report or technical-economic report without requiring amendment of the investment policy decision.
- If the planning adjustments lead to changes in the location of the land fund or public assets intended for auction, the competent authority shall carry out procedures to amend the investment policy for the BT project.
Decree 257 takes effect from October 8, 2025./.
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