Bringing a BOT Project to Closure in Vietnam

Abstract

Despite amendments to Vietnam's Foreign Investment Law in 1992 to introduce the concept of build-operate-transfer (BOT) projects, only one foreign-invested BOT project has begun operations since then. Among the problems have been excessive bureaucracy, an incomplete regulatory framework, and negotiators with insufficient authority to make necessary decisions. As investors have attempted to work through the process of negotiating BOT contracts, they have identified major weaknesses in either the law and regulatory structure or its implementation in three areas: availability of foreign currency, security for loans, and dispute resolution. However, future BOT investors may have an easier time because the Vietnamese government has been receptive to suggestions for improvement in the legal and regulatory structure from the private sector and multilateral agencies. This is a timely submission, coming exactly twenty-five years after the end of the Vietnam war.