Revenue Increase and Decrease Sharing Mechanism in Public–Private Partnership (PPP) Investment
1. Where the actual revenue exceeds the revenue stipulated in the financial plan of the PPP project contract within the range from more than 110% to more than 125%, the investor or PPP project enterprise shall share with the State 50% of the difference between the actual revenue and the revenue in the financial plan. The competent authority shall determine the specific sharing ratio of revenue increase during negotiations with the investor or PPP project enterprise. The revenue increase sharing mechanism shall be applied after adjustments to prices, fees for public products and services, and the PPP project contract term in accordance with Articles 50, 51, and 65 of this Law, and shall be subject to audit by the State Audit Office.
For PPP projects in science and technology, investors and PPP project enterprises are not required to share revenue increases within the first three (03) years from the commencement of operation and business activities.
2. Where the actual revenue falls short of the revenue stipulated in the financial plan of the PPP project contract within the range from less than 90% to less than 75%, the State shall share with the investor or PPP project enterprise 50% of the difference between the revenue in the financial plan and the actual revenue. The competent authority shall determine the specific sharing ratio of revenue decrease during negotiations with the investor or PPP project enterprise. The revenue decrease sharing mechanism shall apply when all of the following conditions are met:
a) The project is implemented under BOT, BTO, or BOO contract types;
b) Changes in planning, policies, or relevant laws result in decreased revenue;
c) An adjusted financial plan has been applied with maximum prices or fees for public products and services within the regulated range, or with a PPP project contract term extended up to 50 years, but the minimum revenue level is still not ensured;
d) The revenue decrease has been audited by the State Audit Office.
3. The revenue decrease sharing mechanism as provided in Clause 2 of this Article must be specified in the decision on investment policy. The cost of implementing the revenue decrease sharing mechanism shall be covered by the central budget contingency for projects whose investment policies are decided by the National Assembly, the Prime Minister, ministers, heads of central agencies, or other competent authorities, or by the local budget contingency for projects whose investment policies are decided by provincial People’s Councils.
Based on the actual situation of each sector or locality, the availability of each funding source, and the priority level of state budget expenditure tasks from time to time, the competent authority for the project shall identify feasible funding sources to cover revenue decrease payments and report to the competent authority in accordance with the applicable regulations for each source of funds. The order of priority for funding sources shall be as follows:
a) Central and local annual budget contingencies allocated for development investment. The order and procedures for preparing and approving projects using these contingencies shall comply with the Law on Public Investment and the Law on State Budget;
Supplement:
3a. For projects whose investment policies are decided by the National Assembly, the Prime Minister, ministers, heads of central agencies, or other competent authorities, priority shall be given to the use of the central budget to cover revenue decreases. For projects whose investment policies are decided by provincial People’s Councils or provincial People’s Committees, priority shall be given to the use of local budgets. For projects implemented across two or more provinces, the provincial People’s Committee assigned by the Prime Minister as the competent authority shall coordinate and allocate responsibility among localities for revenue decrease payments in the project’s investment policy decision.
b) Increased revenues and expenditure savings from the central and local budgets allocated for development investment. The order and procedures for preparing and approving projects using these sources shall comply with the Law on Public Investment and the Law on State Budget;
c) General contingencies from the central and local budgets in the medium-term public investment plan. The order and procedures for preparing and approving projects using these contingencies shall comply with the Law on Public Investment.
The costs of implementing the revenue decrease sharing mechanism under this Clause must be stipulated in the PPP project contract.
4. On an annual basis, the parties to the PPP project contract shall determine the actual revenue and submit it to the competent financial authority for implementation of the revenue increase and decrease sharing mechanism. The accounting of state budget revenues and expenditures in relation to revenue sharing shall be carried out in accordance with the Law on State Budget.
5. The Government shall provide detailed regulations on this Article.
Legal Basis:
-
Article 82, Law on Investment in the form of Public–Private Partnership (2020)
-
Clause 19, Article 3, Law Amending the Law on Planning, the Law on Investment, the Law on PPP Investment, and the Law on Procurement (2024)
-
Points a and b, Clause 30, Article 2, Law Amending the Law on Procurement; the Law on PPP Investment; the Law on Customs; the Law on Value-Added Tax; the Law on Import and Export Duties; the Law on Investment; the Law on Public Investment; the Law on Management and Use of Public Assets (2025)
-
Clause 19, Article 3, Law Amending the Law on Planning, the Law on Investment, the Law on PPP Investment, and the Law on Procurement (2024)
