LEGAL UPDATE ON RESOLUTION NO. 16/2026/NQ-CP ON MECHANISMS AND POLICIES FOR REMOVING DIFFICULTIES IN TRANSITIONAL BT PROJECTS
On April 7, 2026, the Government promulgated Resolution No. 16/2026/NQ-CP (“Resolution 16”), providing mechanisms and policies to resolve difficulties and obstacles arising in Build–Transfer (BT) investment projects implemented prior to the effective date of the Law on Investment under the Public-Private Partnership (PPP) model (the “Transitional BT Projects”).
Resolution 16 takes effect from April 7, 2026, until the end of December 31, 2027.
In this article, Mr. Phan Quang Chung, Lawyer, and Ms. Tran Hong Hanh, Legal Assistant, provide an overview of key provisions under Resolution 16.
(1) Principles and Conditions for Application of Resolution 16
The most fundamental principle is that Resolution 16 only addresses difficulties and obstacles in Transitional BT Projects where such issues arise due to faults attributable to state authorities.
For Transitional BT Projects where project contracts contain provisions inconsistent with the laws at the time of execution due to the fault of investors, the competent authority shall:
(i) terminate the project contract ahead of schedule; and
(ii) not allocate state budget funds to compensate the investor for early termination.
Additional principles include:
- Ensuring compliance with applicable laws during implementation;
- Not legitimizing past violations or creating new violations;
- Safeguarding overarching public interests and legitimate rights of stakeholders;
- Separating liability handling from the resolution of project difficulties to expedite the effective use of infrastructure and land resources.
Conditions for application
Resolution 16 applies only if:
- The project has been reported and included in the National Information System on problematic investment projects (“System 751”), except those listed in the Resolution’s appendices; and
- The project has been subject to inspection/audit conclusions, or an official determination that inspection is not required.
Notably, Resolution 16 does not limit:
- The timing of reporting on System 751; nor
- The timing of inspection conclusions.
Authorities are empowered to decide on inspections and bear full responsibility for such decisions.
Investors must:
- Ensure project data is updated on System 751;
- Review project contracts and inspection conclusions (if any);
- Determine whether project difficulties arise from state authorities or other causes;
- Take appropriate actions if inspection conclusions are inconsistent or absent.
(2) Solutions for Resolving Obstacles
(2.1) Projects with legally compliant contracts
Where project contracts comply with laws at the time of execution, authorities shall continue implementation and payment under:
- State budget; or
- Land fund/public assets.
For state budget payments:
- Payment is based on finalized investment value;
- Total payment must not exceed approved total investment, post-construction interest, and reasonable profit;
- Loan interest and equity return follow contractual terms.
Contracts may be amended to adjust interest rates under Decree No. 312/2025/NĐ-CP.
For land/public asset payments:
- Payment may continue in kind or be converted into monetary payment depending on circumstances.
(2.2) Projects with non-compliant contracts
Investor fault:
- Contract termination;
- No state budget compensation.
State authority fault (if conditions satisfied):
- Project efficiency confirmed;
- No loss to state budget or corruption;
- Agreement between parties to amend contract.
In such cases, the project may continue after contract amendment.
(2.3) Discrepancies in land value for payment
Land valuation is determined at the time of land allocation or lease.
Resolution 16 provides options:
- Full land allocation with monetary adjustment;
- Land allocation with investor paying the difference;
- Partial land allocation with balance paid in cash;
- Conversion to full monetary payment.
(2.4) Projects not yet implemented
- If investor selection completed but contract not signed → proceed or terminate;
- If contract signed but project not implemented → continue or terminate (no specific conditions provided).
(2.5) Advance payments by investors
Advance payments for compensation and resettlement:
- Offset against land value;
- Excess amounts counted as project costs.
Refund cases:
- Land area exceeds allocated portion;
- Project termination or contract not finalized.
(2.6) Interest due to delayed land allocation
If the BT project was completed before Resolution 16 took effect but land allocation is delayed:
- Investors are entitled to interest on completed works based on contractual rates.
If not specified, Resolution 16 provisions apply.
Disclaimer
This article reflects the authors’ personal views for informational purposes only and does not constitute legal advice from the authors or BFSC. Readers should not rely on this content as legal advice for any specific case. BFSC disclaims all liability arising from such use.
For feedback, please contact:
- Phan Quang Chung – Founding Partner | Email: [email protected]
- Tran Hong Hanh – Legal Assistant | Email: [email protected]