GUIDELINES FOR TRANSFER OF RIGHTS TO COLLECT FEE FOR USE OF INFRASTRUCTURE ASSETS

On April 24, 2024, the Government issued Decree No. 44/2024/ND-CP regulating the management, use, and exploitation of road infrastructure assets ("Decree 44") to replace Decree No. 33/2019/ND-CP ("Decree 33"). The notable points of Decree 44 compared to Decree 33 are as follows:

1. Clarification of cases not within the scope of regulation:

Both Decree 44 and Decree 33 stipulate the regulated scope of documents as the management, use, and exploitation of road infrastructure assets invested and managed by the State. While Decree 33 only generally stipulates cases where road infrastructure assets invested and managed by organizations, individuals are not within the scope of regulation, making it difficult to apply because in practice, many cases involve projects invested by organizations, individuals but with state capital sources, raising questions about whether they are considered assets "invested and managed by the State" or not.

1. To address this issue, Decree 44 clearly defines cases not within the scope of regulation regarding the determination of assets, specifically road infrastructure assets invested with state capital into enterprises, units of the armed forces, other managed entities, and road infrastructure assets invested and managed by the State but sold, transferred, included in the enterprise value during equitization, not within the scope of regulation of Decree 44. Road infrastructure assets transferred to enterprises with state capital investment.
2. Road infrastructure assets at units of the armed forces.
3. Road infrastructure assets by entities other than road management agencies at all levels, the above-mentioned enterprises, units, and road infrastructure assets invested and managed by the State but sold, transferred, included in the enterprise value during equitization.

2. Detailed guidance on the transfer of rights to collect fees for the use of infrastructure assets:

The transfer of rights to collect fees for the use of infrastructure assets has been regulated in the Law on Management and Use of Public Assets 2017. However, Decree 33 does not provide specific guidelines for practical implementation, so the legal framework for the transfer of rights to collect fees for the use of infrastructure assets in practice is incomplete. To address this issue, Decree 44 supplements detailed guidelines for specific implementation methods of exploiting road infrastructure assets to create consistency in implementation. Accordingly:

1. Decree 44 clearly stipulates the deadline for the transfer of rights to collect fees for the use of road infrastructure assets, specifically determined in each transfer contract but not exceeding 10 years.
2. The transfer of rights to collect fees for the use of assets must be conducted through asset auctions. In addition to the conditions stipulated by law on asset auctions, participating organizations must meet conditions regarding managerial and operational experience, similar road infrastructure projects for at least 02 years up to the time of submitting auction participation documents; financial capacity demonstrated through minimum revenue and pre-tax profit criteria for 02 consecutive years as per the Financial Statements of the organization audited as prescribed.
3. Decree 44 explicitly binds the maximum payment value for the transfer of fee collection rights to be made twice within 90 days from the contract signing date, where the first payment must be at least 50% of the transfer value within 30 days from the contract signing date.
4. The recipient of the transfer must pay a deposit to ensure the execution of the signed contract (in addition to the transfer value as per the contract): the deposit amount equals 5% of the total transfer value for the entire transfer period at the auction winning price, sent by the recipient to a locked account at a credit institution. The deadline for depositing the deposit into the locked account is 15 days from the contract signing date. The deposit period corresponds to the transfer period of the fee collection rights.
5. To ensure budget revenue is not lost, Decree 44 stipulates that if the actual revenue from the exploitation of transferred assets (according to the audited Financial Statements) exceeds the reference revenue by 125% or more, the recipient of the transfer must submit an additional 50% of the additional revenue over 125% into a reserve account as stipulated in Article 2 of this Decree; the reference revenue is the revenue from asset exploitation of the corresponding year of the fee collection transfer period in the auction starting price plan.

3. Specific provisions on land use before the effective date of Decree 44 until before the effective date of the Land Law 2024:

Decree 44 stipulates that before competent authorities decide to revoke land attached to road infrastructure assets according to land law regulations, competent authorities must send written opinions to the Ministry of Transport or local road management agencies or the Ministry of Defense, the Ministry of Public Security. The consulted agencies must respond in writing within 30 days from the date of receiving the document.

However, this regulation is only effective from the effective date of Decree 44 until before the effective date of the Land Law 2024. From the effective date of the Land Law 2024, according to the provisions of Articles 83 and 84, the revocation of land attached to road infrastructure assets does not require the opinion of the Ministry of Transport or local road management agencies; however, if the land, road infrastructure assets being revoked are related to national defense, security, it is still necessary to obtain prior opinions from the Ministry of Defense, the Ministry of Public Security.

Decree 44 takes effect from June 10, 2024.