
Sign up for consultation
What is a bot contract? This is a form of construction investment contract in which the investor will be responsible for constructing, operating and transferring the project to the State after an agreed period of time. This model helps mobilize capital effectively and reduce the financial burden on the public budget. However, when drafting a BOT contract, the parties need to pay attention to important provisions to ensure that rights and responsibilities are clearly and fairly delineated.
Pursuant to Point a, Clause 16, Article 3, Point a, Clause 1, Article 45 of the Law on Public-Private Partnership Investment 2020, a BOT contract is a contract in which the investor or PPP project enterprise is granted the right to build, business and operation of works and infrastructure systems within a certain period of time; At the end of the term, the investor or PPP project enterprise transfers the project and infrastructure system to the State. The concept of PPP projects is explained in Clause 9, Article 3 of the Law on Public-Private Partnership Investment 2020.
Outstanding features of BOT contracts are:
This distinguishes BOT contracts from other PPP contracts such as BTO (transfer of works after construction), BOO (retention of ownership of works), and BLT (lease before transfer).
Because a BOT contract is a type of contract under a PPP project contract, the BOT contract will also have some basic contents specified in Article 47 of the Law on Public-Private Partnership Investment 2020 specifically:
When drafting a BOT contract, there are a number of important provisions that need special attention to protect the interests of all parties and ensure the success of the project. Below are the core elements that need to be agreed upon in the contract:
The first important provision is reasonable risk allocation between the State and investors. Risks may include policy changes, financial risks, or uncontrollable factors. Clearly defining the responsibilities of each party in facing these risks will help protect rights and ensure stability during project implementation.
An equally important provision is the mechanism for adjusting prices and service fees. Project service fees (Ex: bridge tolls, highway tolls) need to be adjusted reasonably, ensuring not only the interests of investors but also fairness to users and in line with the socio-economic situation. Agreements on price adjustments need to be specific and transparent to avoid future disputes.
Force majeure events (such as natural disasters, war, legal changes) need to be clearly specified in the contract. Clearly specifying these situations and how they will be handled when they occur will help minimize disputes, especially when there are sudden changes in circumstances that impact the project schedule or cost.
One of the important issues when drafting a BOT contract is the process of transferring the project after the contract term ends. This must be agreed upon in detail from the beginning regarding technical requirements, legal procedures and responsibilities of the parties to ensure that the project is transferred smoothly, with the right quality and without arising disputes.
It is necessary to establish an effective dispute resolution mechanism to handle any conflicts between the parties during the contract implementation process. Clearly defining dispute resolution methods (mediation, arbitration, court) helps ensure the rights of both the State and investors, while maintaining the progress and efficiency of the project.
BOT contract is a type of contract that has a great impact on the process of implementation, operation, and transfer of projects to the State. Given the complexity of financial, and liability factors, ensuring contract terms are accurate and transparent is extremely important. Understanding this, Long Phan, with experience and a team of knowledgeable experts in the investment field, provides services related to the signing and implementation of comprehensive BOT contracts. Including:
With a team of consultants with many years of experience in the field of investment consulting, when coming to Long Phan, you will not only receive in-depth advice but also receive comprehensive support from the negotiation stage until the BOT contract is perfectly implemented. Contact us immediately via the hotline: 0906735386 for detailed advice and timely support!
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
Leave your email to receive the latest information from us
CONTACT: 0906 735 386
Copyright 2024 © Tư vấn Đầu tư Long Phan. All rights reserved.