Vietnam: The mechanism to handle power plant projects behind the schedule

Vietnam: The mechanism to handle power plant projects behind the schedule

Ministry of Industry and Trade (MOIT) has recently issued a Regulation on
commitment to develop power plant projects and mechanism to handle the
projects behind the committed schedule.

The Regulation stipulates commitment of the domestic and international
investors to develop in time the power plant projects, capacity from 30 MW
up invested by or not by the form of public-private partnership (PPP) and
mechanism to handle the projects behind committed schedule.

In case, that the project has a rick behind committed in MOU schedule, the
project investor must take measures to solve difficulties to complete it in
time.

The MOIT and project investor may adjust the schedules of the project
development in cases of force majeure as: within 15 working days from the
date of falling to situation of force majeure, the investor has to inform by
document to MOIT and propose adjusted schedules of the project development.

Within 5 days from the date of receiving the information, MOIT to have
assessment on situation of force majeure for investor and MOIT to implement
adjustment of the project schedules in MOU

Regarding the project not to reach committed schedule due to the behaviors
of the competence state management agency relating the working item in this
schedule, at the latest after 15 working days from the date of committed
schedule, project investor must report MOIT by document with proposing
adjustment of the project schedules and explain the reasons behind schedule
due to behaviors of the competence state management agency relating working
item in this schedule.

Within 10 working days from the date of receiving the report, MOIT to assess
the reasons behind schedule. In case, if the reasons are not mistakes of
project investor MOIT and investor should sign adjustment of schedules for
project development in MOU.

Within 10 working days from the date of sending document to project
investor, if specifying the competence state management agency relating the
working item in this schedule to cause the reasons behind the schedule, MOIT
should supervise and speed up agencies and units under it's management or
send documents to relevant ministries in charge or report Prime Minister to
influence the agencies and units not under management of MOIT.

For the cases behind the schedule by the third side directly relevant to
working items in the schedule of project development, at the latest after 15
working days from the date of committed schedule, project investor must
report MOIT by document to propose adjustment of project development
schedules and explain the reasons behind the schedules due to the behaviors
of the third side directly relevant to working items in the schedule of
project development.

Within 10 working days from the date of receiving document of investor, MOIT
should propose the third side in a term of 15 working days to inform by
document about the reasons behind the schedule.

Within 10 working days from the date of receiving document from the third
side, MOIT to send document to project investor to confirm the third side
cause of situation behind schedule, MOIT should supervise and speed up
agencies and units under it's management or send documents to relevant
ministries in charge or report Prime Minister to influence the agencies and
units not under management of MOIT.

Regarding the schedules "Financial contribution progress" and "Construction
starting progress", the adjustment would be based on project documentation
or PPP signed contract.

The document of MOIT about the reasons behind the schedule of project
development not due to the mistakes of project investor is only used as a
basis for adjusting schedules of project development but any other purpose.

In case that adjustment of the schedules of project development changes the
official schedule in documentation and PPP contract of project from 12
months up, MOIT should have document to propose the Prime Minister to adopt
adjusted schedule to put the project into operation before signing
adjustment of schedules of project development in MOU.

The mechanism for handling PPP power plant projects which are not carried
out committed schedules is applied from the date when the competence agency
assigns the right for project development to the date of official signing
documentation and PPP contract of the project.

The mechanism for handling PPP power plant projects which are not carried
out committed schedules is deployed under following forms:

Firstly, for each time behind the schedule by 30 working days vs. committed
schedule in MOU, MOIT should call to attention and require investor to
prompt completing the slow works and ensure the following schedules not to
be influenced.

After 30 working days from the date of the first remembering document,
investor still has not fulfilled the previous slow works, MOIT should have
remembering document in second time. As maximally, it is two remembering
times for each schedule.

Secondly, in term of one year from the date of MOIT's first announcement
about the schedule delay, if the project investor has not yet completed
delayed works and the overall schedule of the project has been delayed for
12 months vs. committed schedule in MOU, MOIT should propose competence
agency to consider terminating the right of project development for the
investor and assigning it to another one.

Thirdly, in case that the right of project development and investment
certificate have been terminated and revoked, all the expenses spent or
raised before the date of project termination, should be incurred by
investor and not compensated.

Fourthly, for the schedules accounted after the date of signing
documentations and PPP contract, the mechanism for handling schedule delay
should be applied in accordance with the regulations in PPP Contract.

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Link to Original Article:
http://nangluongvietnam.vn/news/en/electricity/the-mechanism-to-handle-power
-plant-projects-behind-the-schedule.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com