On September 16, 2024, Decree 115/2024/ND-CP was issued, marking an important step in guiding and regulating bidding activities related to land-use projects. This decree not only ensures transparency in the bidding process but also fosters fair competition and protects the interests of the parties. In this article, TNTP’s lawyers will delve into the new points in the Decree and their impact on investors, government agencies, and other relevant parties.
1. New provisions on investors selection
Decree 115/2024/ND-CP (“Decree 115”) details the process and criteria in selecting investors for land-use investment projects. One significant new point is the introduction of clearer and more transparent criteria in evaluating investors’ capabilities, including financial capacity, experience, and project implementation capacity.
Decree 115 stipulates that land-use investment projects must select investors through bidding. Article 4 of Decree 115 provides that the following types of projects must be subject to bidding:
(i) Investment projects for constructing urban areas with mixed functions and rural residential areas for which the Provincial People’s Council decides on land allocation or lease through bidding.
(ii) Projects in which the State reclaims land for socio-economic development, environmental protection, and cultural heritage conservation.
Authorized state agencies are responsible to public information about investor selection results, ensuring transparency, and preventing exploitation or fraud during the bidding process.
2. Reforming the investor selection procedure
Decree 115/2024/ND-CP has implemented important reforms in the bidding and investor selection process. One notable point is the simplification of procedures, reducing time and costs, thus making the investor selection process faster and more efficient. Specifically, Decree 115 has adopted measures such as:
• Provisions related to the preparation, appraisal, and approval of the investor selection plan have been removed in Decree 115. At the same time, the appraisal of the Expression of Interest (EOI) and the list of technically qualified investors have been simplified. Additionally, Decree 115 allows for the simultaneous preparation of tender documents and EOIs with procedures for planning, and investment policy approval, thus reducing duplication and saving time for stakeholders.
• The decree provides more detailed provisions on the bidding process and project document appraisal. Decree 115 requires that competent agencies closely coordinate in appraising the bidding documents, ensuring objectivity and efficiency in evaluating tender submissions. The appraisal steps must be conducted in a specific and strict manner to avoid overlooking or inadequately evaluating crucial project elements.
• Removing the acquisition of feedback from the Ministry of Planning and Investment: Under previous regulations, in certain special cases, the authority would need to obtain the Ministry of Planning and Investment’s feedback on investor approval documents for projects under the jurisdiction of the Prime Minister. However, Decree 115 removes this requirement, granting more autonomy and responsibility to local authorities in the bidding process, thus promoting the proactive and timely execution of public investment projects.
These changes not only help reduce bureaucratic procedures but also create favorable conditions for investors to participate in public investment projects and at the same time enhance transparency and fairness in bidding and promote a fair competition among investors.
3. Changes in the investor selection process
• One important new regulation in Article 59 of Decree 115 concerns how to handle situations where fewer than three investors participate in bidding. The competent agency has two options: (i) Allowing an extension of the bidding deadline and adjusting the tender documents to attract more investors, or (ii) Opening the bids if the number of investors is insufficient. This provision helps prevent “fixed” bidding and protects the interests of investors and society.
• By changing the investor selection process to be more open, transparent, and inclusive, Decree 115 creates a more flexible and effective legal mechanism, promoting public investment projects and contributing to the sustainable development of the economy.
4. Incentives for investor selection
Decree 115 not only simplifies bidding procedures but also provides clear incentives to encourage investors to participate in public projects, especially land-use projects. Specifically, Article 6 of Decree 115 stipulates two categories of investors who are eligible for incentives when participating in bidding:
• Investors applying advanced and eco-friendly technologies: For projects with significant environmental impact, investors who apply advanced technology to reduce negative effects will be granted a 5% advantage during the evaluation process.
• Investors commits to carry out technology transfer: Investors who implement advanced technology transfer, which is within the government’s priority list, will receive a 2% advantage.
To qualify for these incentives, investors must submit complete documentation proving their use of advanced, high-tech, environmental-friendly solutions, or the best available technologies, and documents proving their legal rights to use technology in accordance with laws on high-tech, technology transfer, and environmental protection.
These incentives enhance competitiveness and provide investors with the necessary motivation and financial capacity to participate in large-scale projects, contributing to economic and social development.
These changes will have far-reaching effects on both investors and government agencies. For investors, the Decree creates a fair competitive environment, encouraging investors to undertake high-quality projects. At the same time, investors will have more access to full and transparent information, reducing risks during the bidding process.
Decree 115/2024/ND-CP marks an important step in improving the legal framework for bidding, especially for land-use projects. The new regulations will ensure transparency, efficiency, and fairness in the investor selection process while fostering a fair bidding environment and protecting the interests of stakeholders.
Above is an article by TNTP’s lawyers on the topic: “Key Points of Decree 115/2024/ND-CP providing guidance on the Law on Bidding regarding the selection of investors for investment projects involving land use” We hope this article provides value to our readers.
Best Regard.
