Name of recommendations: Recommendation on the investment in Laos

Status: Has been incompletly responded

Recommended by units: The Song Da Corporation

Official letter: 1389/PTM - VP, dated: 2017-06-13

Recommended contents:

- Lack of investment capital: Since the shareholders do not contribute capital as the original commitment, investors are lack of investment capital and credit institutions do not disburse to the project due to investors are lack of reciprocal capital

 - The selling price of electricity to Vietnam is calculated on the basis of total investment. However, the determination of the total investment value as the basis for calculating the selling price of electricity also exists many difficulties and inadequacies. Specifically: On the basis of the total investment already evaluated by the Ministry of Planning and Investment when issuing the investment certificate abroad, the investor shall report to the Ministry of Industry and Trade so as to propose the agreement on the selling price of electricity to Vietnam. The Ministry of Industry and Trade then reviews the total investment portfolio according to the Ministry of Industry and Trade's own viewpoint and usually applies it to the calculation of domestic investment projects without taking into account the investment factors. to go abroad, so there has been inconsistency in the way to determine the total investment. At the same time, the procedure and time for re-evaluation of the total investment also prolong (usually more than 1 year)  these have caused great disadvantages for investors.

- At the border gates of the two countries they only work in administrative hours, it leads to materials, machinery and transport vehicles have to wait at the border gate to spend more time and increase costs.

- According to the regulations of Laos, hydropower projects invested by Lao PDR in the form of BOT have a term of 30 years, in which the operation time for the transfer is 25 years. Thus, the time for completion of construction is about 5 years which is relatively inadequate and not feasible for hydropower projects (due to procedures for investment preparation and implementation of investment must work with both Governments so the implementation time is usually longer than the investment in Vietnam). This leads to the risk of reducing the operation time of the plant and thus reducing the efficiency of the investment

The Song Da Corporation would like to propose to remove difficulties for hydropower investment in Laos:

• The Government allows commercial banks lending to enterprises in excess of quotas or commitments on product consumption as a basis for banks lending to investors.

• To reduce the export tax on supply materials and materials (for domestic enterprises to supply materials and materials for construction works abroad); Tax exemption for motorcycles and equipment brought overseas (construction vehicles temporarily imported for re-export).

• To allow investors nominating contractors to perform the tender packages of the project (preferably Vietnamese contractors).

Tổng Công ty Sông Đà kiến nghị tháo gỡ khó khăn cho đầu tư thủy điện tại Lào:

• Chính phủ cho phép các Ngân hàng thương mại cho Doanh nghiệp được vay vượt hạn mức hoặc cam kết bao tiêu sản phẩm để làm cơ sở để các ngân hàng cho chủ đầu tư vay vốn đầu tư.
• Giảm thuế xuất khẩu vật tư, vật liệu (cho doanh nghiệp trong nước đưa vật tư, vật liệu ra nước ngoài thi công các công trình); miễn thuế đối với xe máy thiết bị đưa ra nước ngoài thi công (xe máy tạm nhập tái xuất).
• Cho phép chủ đầu tư được chỉ định thầu cho các nhà thầu thực hiện các gói thầu của dự án (ưu tiên nhà thầu Việt Nam).

To apply the minimum electricity purchase price and suit the common ground of the regional countries when buying electricity to Vietnam.