On March 7, 2023, the Ministry of Transport issued Circular No. 01/2023/TT-BGTVT guiding on bidding for investors of road traffic service works in projects managed by the Ministry of Transport, including roadside stations and other ancillary works on roads serving traffic and road safety corridors ("Circular 01").
ATA Legal Services would like to summarize notable and exclusive contents therein, specifically:
1. Allow bidding for investors of service works of which site clearance for the land to be used has completed
Under Decree 25/2020/ND-CP, one of the conditions for organizing bidding for investors of service works construction projects is that "the project is not eligible for auction of land use rights in accordance with the land law".[1] Accordingly, it could be understood that the land to be used for the construction of service works subject to the bidding must be uncleared land.
However, Circular 01 stipulates towards more open that the bidding for investor of service works construction projects can be carried out whether the site clearance of the land to be used for construction has been completed or not.
2. Settlement of compensation and site clearance costs in bidding for projects where the site clearance has completed
The aforementioned new provision of Circular 01 raises the issue of how to deal with the compensation and site clearance expenses paid by the State in case of bidding where the land has been cleared? To solve this problem, Circular 01 stipulates: The successul investor is responsible for reimbursing these payment to the State as agreed upon in the contract and the investor is entitled for deduction of the difference in compensation, support and relocation value by the competent People's Committee according to the approved method to investor’s obligations to state budget under bidding document and regulations of the law.
In addition, investors should also note that in case compensation, support and relocation costs according to method for compensation, support and relocation approved by the competent People’s Committees are lower than the support and relocation costs proposed by the investors in the proposal (M2), the difference will be submitted to state budget; in case they are higher than M2, the investor shall incur the difference which will be included in investment capital of the project.
3. New regulations related to the approval of investors in cases where only one investor meets the preliminary requirements on capacity and experience
Decree 25/2020/ND-CP allows competent state agencies to immediately approve investment policies and investors, in case only one investor meets the preliminary requirements on capacity and experience. However, Circular 01 provides more towards stricter, specifically:
- In case only one investor meets the preliminary requirements on capacity and experience, the competent state agency shall consider extending the time limit for project implementation registration. The extension and the extension time shall be considered to be adequate for other potential investors to have the opportunity to access information and submit project registration application.
- If after the extension, there is still only one investor who meets the preliminary requirements on capacity and experience, the competent state agency shall organize the preparation and approval of the application. The investors shall be, once again, responsible for demonstrating the capacity and experience through the preparation and submission of proposal for investor approval according to the contents of the application for investor approval. After evaluation of the state agency, if the proposal is considered satisfied, the new investor shall be approved to be the project’s investor.
4. Regulations to ensure competitiveness, transparency, fairness, and efficiency in bidding activities
The bidding for investor can only be carried out through one of these two forms, including national competitive bidding and international competitive bidding. The Law on Procurement allows competitive bidding, limited bidding and direct procurement. However, given the provisions of Circular 01, service works serving traffic activities, do not have high requirements on technique, or specific techniques, there are not many difficulties for investors to implement the project.
In the proposal dossier, for the project of which the land that has not yet been cleared, the investor must have a plan to coordinate with the road management agency to work with the competent People's Committee to complete the site clearance and complete land-related procedures as per the law.
Circular 01 takes effect from May 1, 2023.
[1] Clause 5 Article 11 of Decree No. 25/2020/ND-CP amended and supplemented by Decree 31/2021/ND-CP.
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