Nd 52 8 7 1999 quy che qldtxd english

Scope of regulation: a For investment projects of State bodies or State enterprises; which use theState-budget capital, the State-guaranteed credit capital, the development investmentcre

No 52/1999/ND-CP

- Hanoi, July 8,1999

-DECREE OF PROMULGATING THE REGULATION

ON INVESTMENT AND CONSTRUCTION MANAGEMENT

THE GOVERNMENT

Pursuant to the Law on Organization of the Government ofSeptember 30, 1992;

At the proposals of the Minister of Construction, ,Minister of Finance and Minister of Planning and Investment,

DECREES:

Article 1.- To promulgate together with this Decree the Regulation on

Investment and Construction Management which shall replace the Regulation onInvestment and Construction Management issued together with Decree No 42/CP ofJuly 16, 1996 and Decree No 92/CP of August 23; 1997 of the Government

Article 2.- This Decree takes effect 15 days after its signing.

Article 3.- The Minister of Construction shall assume the prime responsibility

and coordinate with the Ministry of Planning and Investment, the Ministry of Finance,the State Bank of Vietnam and concerned ministries as well as branches in guidingand inspecting the implementation of the Regulation on Investment and ConstructionManagement issued together with this Decree

Article 4.-The ministers, the heads of the ministeriallevel agencies, the heads

of the agencies attached to the Government; the presidents of the PeoplesCommittees of the provinces and centrally-run cities, the Managing Boards of theState corporations and concerned organizations shall have to implement this Decree

On behalf offthe Goverment

Prime Minister

REGULATION ON INVESTMENT AND CONSTRUCTION MANAGEMENT

(Issued together with Decree No 5211999/ND-CP of July 8, 1999 of the

1 To encourage various economic sectors to invest in production and business

in conformity with the strategy and planning for national socio-economic development

in each period in order to restructure the economy along the direction ofindustrialization and modernization, to boost the economic growth rate and raise thematerial and spiritual life of the people

2 To use the State-managed investment capital sources with optimal efficiencyagainst corruption and waste

3 To ensure that the construction is carried out according to the constructionand architectural planning and satisfies the requirements of durability, beautiful looksand ecological environment protection: to create environment for healthy competition

in construction; to apply advanced technologies, to ensure the construction quality andtime-table with reasonable costs; to provide warranty for construction works

Article 2.- Basic principles in the investment and construction

management

1 To clearly define the State's management function and assign theresponsibility for investment and construction management in conformity with eachkind of investment capital source and investors To manage the investment andconstruction according to projects planning and law

2 Investment projects financed by State-budget capital State-guaranteedcredit capital, the State's development investment credit capital and the Stateenterprises' investment capital must be strictly managed according to the investmentand construction order prescribed for each kind of capital

3 With regard to investment and construction activities of people, the Stateshall only manage the planning; architecture and ecological enm,,ironment

4 To clearly define the responsibilities and powers of State managementbodies, investors; consulting organizations and contractors in the investment andconstruction process

Article 3.- Objects and scope governed by the Regulation on Investment

and Construction Management

1 The objects of investment and construction management shall include:

a) Investment projects for construction; renovation, overhaul or upgrading ofalready invested and built projects:

b) Investment projects for the procurement of assets including equipment andmachinery not to be installed and new scientific and technological products;

c) Projects using State-budget capital for the planned development of regionsand territories, the planned development of branches as well as the planned urbanand rural construction;

d) Construction works using State-budget capital but without having toelaborate the investment projects;

e) Investment and construction objects without using the State capital

2 Scope of regulation:

a) For investment projects of State bodies or State enterprises; which use theState-budget capital, the State-guaranteed credit capital, the development investmentcredit capital of the State and/or the investment capital of the State enterprises, theState shall manage the investment and construction through its decision oninvestment after such projects are appraised in term of branch development plans,urban and rural construction plans, construction norms and standards, the use of landand resources, the ecological environment protection (depending on requirements foreach type of project), as well as in term of financial plans; prices and investmentefficiency of the projects:

b) For investment projects of enterprises, which use the State's developmentinvestment credit capital, the State's regulations on development investment creditsshall apply For investment projects using investment credit capital not guaranteed bythe State, the investors shall themselves be responsible for the investment efficiency;the capital-lending organizations shall have to scnitinize the projects and decide thecapital loans for investment;

c) For investment projects of enterprises, which use other sources of capital,the State shall manage through business registration and construction licensing (ifinvestment projects involve construction) as prescribed in Article 13 of this Regulation:

d) For project.; on planned development of regions, territories or branches aswell as planned urban and rural construction, the State shall manage the use ofbudget capital for the execution of such projects and at the same time manage themobilization of capital from other sources for elaboration and implementation ofdetailed planning projects:

f) For investment projects of Vietnamese missions overseas: security anddefense projects which require confidentiality; projects on purchase of copyrights, theelaboration of such investment projects shallcomply with this Regulation; the projectappraisal, investment decision and project execution management shall comply withthe Government's separate regulations;

g) For investment projects of overseas Vietnamese who make investment inVietnam and of foreigners permanently residing in Vietnam, which are executed underthe legislation on domestic investment promotion, the management of the constructionthereof shall comply with this Regulation.

Article 4.- Investment and construction order

1 Investment and construction order shall comprise 3 phrases:

a) Investment preparation

b) Investment execution;

c) Completion of construction and putting projects into exploitation and use

2 Work in the phrases of investment execution and construction completionwith projects being put into exploitation and use may be carried out according to order.successively or alternately, depending on the concrete conditions of each project,which shall be decided by persons competent to decide the investment

3 For projects where capital must be recovered, the investors shall have toretrieve the capital and refund the investment capital

Article 5.- Term interpretation

In this Regulation, the following terms shall be construed as follows:

1 "Investment project" means an assortment of proposals concerning the

disbursement of capital to create, expand or renovate given material bases in order toachieve the quantitative growth or maintain, improve or raise the quality of products orservices within a given period of time (including only direct investment activities)

2 "Construction works" means the products of construction and installation

technologies; closely attached to land (including air space, water surface, sea surfaceand continental shelf) and created by construction materials, equipment and labor

Construction works comprises one or several installation in the synchronousand complete technological chains (even produced through cooperation) to turn outproducts mentioned in the projects

3 " Constructions incident" means damage, collapse of construction structure,

construction item(s) or the entire constructions, which reduce or arrest- “ theconstructions “ bearing capacity, causing unsafety to surrounding works

4 "Branch-managing ministry" means the ministry, the ministerial-level agency

or the agency attached to the Government, which has the function of managing abranch throughout the country in accordance with the Law on Organization of theGovernment

5 "Persons competent to decide the investment" mean the representatives at

law of organizations, State bodies or enterprises, depending on the investment capitalsources prescribed in Articles 10, 11, 12 and 13 of this Regulation

6 "Investor" means the person who owns capital or borrows capital or the

person who is assigned the responsibility to directly manage and use capital to effectthe investment according to the provisions of law

7 "The total investment" means the total expenditure on investment and

construction (including capital for initial production) and the project's maximumexpenditure limit which is determined in the investment decision and can only bereadjusted according to the provisions in Article 25 of this Regulation

8 "The total cost estimate " means the total expenditure needed for the

construction investment (expenses for investment preparation, expenses forinvestment execution including the procurement of equipment, and other expenses ofthe project), which is calculated in detail at the stage of construction technical designand must not exceed the approved total investment

9 "The investment capital to be settled" means the total lawful expenditure

made in the investment process in order to put the project into exploitation and use.The lawful expenditure means the expenditure made in strict accordance with thesigned contract and the approved estimate design as well as with the criteria, norms,unit prices, financialaccounting regime and current relevant stipulations of the State.The investment capital shall be settled within the total investment limit alreadyapproved or readjusted (if any)

10 "Construction criteria" mean the technical criteria set for carrying out the

survey, designing, construction and installation, test operation upon completion toensure the construction quality, applicable to each specialized construction work,which are promulgated by the State or ministries with specialized constructionfunction

11 "Construction norms" mean documents defining the minimum technical

requirements which must be met by all construction activities as well as measures andconstruction criteria applied to satisfy such requirements, which are promulgated bytheMinistry of Construction

12 "New urban area" means a concentrated area newly built according to an

investment project for the development of complete and synchronous technicalinfrastructure and the housing development of the entire area, linked to an existing city

or a new city being formulated with boundary and function being determined ascompatible with the urban construction planning approved by the competent Statebody

13 "Urban technical infrastructure development project" means an investment

project for the construction of technical infrastructures in service of the new urbanarea or for the modification and upgrading of the existing urban area

14 "New urban area development project " means an investment project for

the construction of synchronous technical infrastructure and management of housingdevelopment for the entire new urban area according to the approved planning

Article 6.- Classification of investment projects

1 Depending on projects' nature and investment scale, domestic investmentprojects are classifred.into three groups: A, B and C for division of managementresponsibility The characteristics of each group is specified in the Appendix attached

3 Important national projects mean the projects approved by the NationalAssembly which also decides the policy for investment in accordance with theprovisions of Resolution No 05/1997/QH10 of December 12, 1997 of the NationalAssembly of the Socialist Republic of Vietnam

Article 7.-The responsibility for investment and construction management

1 The Ministry of Planning and Investment:

a) To study and develop mechanisms and policies for investment as well as forthe State management of domestic investment; foreign investment in Vietnam andoverseas investment by Vietnamese',

b) To identify orientation and structure forinvestment capital in order to ensurethe balance between the domestic investment and foreign investment, then submitthem to the Government for decision;

c) To submit to the Government draft laws, ordinances and legal documentsconcerning the economic management mechanisms and policies, the promotion ofdomestic and foreign investment in order to achieve an economic structure suitable

to the strategies, planning and plans for socio-economic stability and development;

d) To issue investment licenses and guide foreigninvested enterprises tomake the investment preparation in accordance with the Law on Foreign Investment

in Vietnam and relevant provisions of this Regulation:

e) To organize the appraisal of Group A investment projects and submit them

to the Prime Minister for considering and deciding the investment or agreeing to letthe Ministry issue the business registration certificates to Group A projects notfunded by State capital: to monitor the process of investment in investment projectsunder the State plans;

f) To synthesize and submit to the Prime Minister the annual and five-yearplans on development investment To coordinate with the Ministry of Finance ininspecting and supervising the implementation of investment plans funded by State-managed capital sources:

g) To assume the prime responsibility and coordinate with the Ministry ofConstruction, the Ministry of Trade, the Ministry of Finance and other ministries,branches as well as localities in guiding and inspecting the implementation of theBidding Regulation:

h) To perform the State management over the elaboration, examination;consideration and approval and the implementation of projects on planned socio-economic development

2 The Ministry of Construction:

a) To perform the function of State management over construction, to studymechanisms and policies on management of construction as well as urban and ruralconstruction plans then submit them to the Prime Minister for promulgation or to beauthorized by the Prime Minister to promulgate them;

b) To promulgate construction criteria, standards, norms, designing process,regulations on construction works quality control, norm system, constructioneconomic-technical indices, investment and construction consultancy expensenorms: to agree to let the ministries having specialized construction promulgate theirstandards, norms, criteria and regulations for the control of the quality of specializedconstruction works;

c) To assume the prime responsibility together with ministries in charge ofspecialized techniques for organizing the appraisal of the technical designs and totalcost estimates of Group A investment and construction projects for ratification by thecompetent authorities To exercise the unified State management over theconstruction quality, to monitor, examine acid detect matters related to the quality ofconstriction works and propose handling measures, particularly the quality of Group

A construction projects;

d) To guide the activities of construction consultancy enterprises, constructionenterprises and organizations managing the execution of investment andconstruction projects;

e) To assume together with the Ministry of Planning and Investment, theMinistry of Finance, the State Bank of Vietnam and other ministries, branches andlocalities the prime responsibility for guiding and inspecting the observance of theRegulation on Investment and Construction Management

3 The Ministry of Finance:

a) To study policies and regimes for mobilization of investment capital fromvarious sources and the management of investment capital in order to submit them

to the Prime Minister for promulgation or to promulgate them according to itscompetence;

b) To coordinate with the Ministry of Planning and Investment in planning theallocation of investment capital to ministries, localities and important State projectsfunded'by the State-budget capital:

c) To exercise the unified management of loan capital and aids reserved fordevelopment investment by the Government:

d) To provide the Government guaranty for foreign capital borrowings byenterprises (except for credit institutions) according to the Government's stipulations:

e) To conduct financial inspection and examination of projects oforganizations and units which use the State's investment capital sources: to guideand inspect the balance of accounts of investment capital for investment projectsfunded by the State capital and make the balance of accounts of investment capitalfor Group A projects funded by the State capital:

f) To guide the allocation of State-budget capital for investment; non-businesscapital of investment and construction nature for projects and programs according toinvestment plans and under the Prime Minister's direction

4 The State Bank of Vietnam:

a) To study the mechanisms and policies for theState management of bankmoney and credits in investment and construction then submit them to the PrimeMinister for promulgation or promulgate them according to its competence:

b) To supervise the credit institutions and other financial or creditorganizations in performing the following duties:

- Mobilizing capital from various sources at home and abroad in order toprovide long- , medium- and short-term loans for investment projects on productionand business development

-Providing loan capital for efficient production and business projects which arefeasible and can repay debts: to coordinate with and create favorable conditions forenterprises to borrow capital for materialization of efficient investment opportunities:

- To provide loan, payment, performance and bidding security as well as otherforms of banking security as prescribed by law;

c) To provide guaranty for foreign capital borrowings by credit institutions forinvestment and construction

5 Other relevant ministries and branches:

a) The ministries, the ministerial-level agencies and the agencies attached tothe Government shall perform the State management function according to theirrespective functions, tasks and powers The ministries having the function ofmanaging the specialized construction projects shall promulgate construction-relatedregulations standards and economic-technical norms after getting the consent of theMinistry of Construction:

b) The branch-managing ministries and bodies relating to land, naturalresources, biology, technologies, environment, trade, the maintenance andconservation of historical relics, cultural heritages, picturesque landscapes, nationaldefense, security, fire prevention and fight shall have to consider and give writtencomments on matters related to investment projects within the prescribed time limits.Past such time limits, if no replies are received from the relevant branch-managingministries, such ministries, branches and agencies are considered to have agreedwith the written proposals.

6 The provincial-level People's Committees (of the provinces and centrally-run cities):

The provincial-level People's Committees shall, within their functions andpowers, perform their responsibility of State management over all organizations andindividuals executing investment projects in their respective localities as prescribed

by law

Article 8.- Management of planning projectsl

1.The Ministry of Planning and Investment shall be the body managingprojects on regional and interprovincial socio-economic development overallplanning throughout the country

2 The Ministry of Construction shall exercise the State management over theurban and rural construction planning as well as key area construction planning

3 The provincial-level People's Committees shall manage projects on economic development overall'planning and the urban and rural constructionplanning under the local management as assigned by the Government

socio-4 The ministries and centrally-run branches shall manage projects on branchdevelopment overall planning as prescribed by the Government

5 Projects on socio-economic development overall planning, specializedbranch development planning as well as urban and rural construction planning, whenstudied for construction, must be widely commented by concerned ministries,branches and localities The urban and rural construction planning, when studied forproject elaboration, must be publicized for comments by people and the People'sCouncils in areas under the planning The construction planning projects (both theoverall planning and the detailed planning) already approved by competent levelsmust be made public regularly at the offices of local administration at all levels andpublic places in the planning area for implementation and inspection of theimplementation thereof by the people

Article 9.- Management of capital for planning projects

1 Capital for elaboration of planning projects shall include the capital forinvestigation, surveys, studies and elaboration of planning projects

2 Capital for elaboration of projects on regional and territorial socio-economicdevelopment overall planning; branch development planning, urban and rural

construction overall planning, the detailed planning on central cities and on land usemay be taken from the State budget and included into the State's annual investmentplans.

3 Capital for elaboration of projects on detailed planning for the construction

of functional urban and rural areas, detailed planning for industrial zones and theconstruction of new urban areas, detailed planning for specialized branches(tourism, physical training and sports, services, ) may be taken from capitalmobilized from investment projects and accounted into the costs of execution ofinvestment projects

4 The Ministry of Planning and Investment andfi ; Ministry of Finance shallhave to manage and allocate annual capital for the work of investigation, survev-and elaboration of overall planning for regional and territorial socio-economicdevelopment, branch development planning as well as urban and rural constructionplanning, and to guide ministries and localities in organizing the implementationthereof

5 The plans on annual capital for the elaboration of regional constructionplanning, urban and rural construction plamung shall be elaborated by localities,the Ministry of Planning and Investment shall consult the Ministry of Finance andthe Ministry of Construction so as to submit them to the Prime Minister forratification The management of the use of this capital source shall comply with thedivision of responsibilities as prescribed by the legislation on the State budget

Article 10.- Management of projects funded by State-budget capital

1 The projects funded by State-budget capital shall include:

a) Projects on socio-economic, defense or security infrastructures, incapable

of recovering capital and the use of their capital is managed according to thedivision of responsibility for State budget expenditure on development investment:

b) Support for enterprises' projects on investment in fields that require theState's participation as prescribed by law;

c) Expenses for the work of investigation, surveys and elaboration of projectsfor regional and territorial socio-economic development overall planning, urban andrural construction planning permitted by the Prime Minister;

d) The Government's loans for development investment:

e) Basic depreciation capital and other State revenues left for Stateenterprises to make investment

2 The competence to decide the investment in projects funded by State-budget capital:

a) The Prime Minister shall decide or authorize others to decide theinvestment in Group A projects:

b) The ministers, the heads of the ministerial-level agencies; agenciesattached to the Government, financial management bodies of the Party CentralCommittee, the central committees of political organizations, socio-politicalorganizations (defined in the State Budget Law), and the presidents of theprovincial-level People's Committees shall decide the investment in Group B and Cprojects.

- For Group B and C projects, the agencies deciding the investment thereinshall have to basethemselves oil branch development planning, local socio-economic development planning and the approved State-budget capital plan todecide the investment and take responsibility for the investment efficiency

- Particularlv for Group C projects, the agencies deciding the investmenttherein shall have to ensure the investment capital balance for the execution ofprojects for not more than two years;

c) General directors of General Departments under the ministries may beauthorized by the ministers to decide the investment in Group C projects:

d) The presidents of the People's Committees of Hanoi and Ho Chi Minh Citymay authorize the directors of the municipal Planning and Investment Services todecide the investment in projects capitalized at less than 2 billion VNdong Forother provinces and cities, the presidents of the provinciallevel People'sCommittees may authorize the directors of the provincial/municipal Planning andInvestment Services to decide the investment in projects capitalized at less than

500 million VNdong;

e) The presidents of the district- or commune-level People's Committeesmay decide the investment in projects financed by State budget capital according

to the assignment by the provincial-level People's Councils

District-level investment projects financed by State-budget capital must beapproved by the provincial-level People's Committees and tightly controlled in term

of their planning and socioeconomic development objectives

Commune-level projects using State-budget capital for investment andconstruction of irrigation canals rural roads, schools, clinics, cultural works, afterbeing approved by the commune-level People's Councils, must be ratified by thedistrict-level People's Committees in term of investment objectives and planning

For commune-level projects on the construction of canals, animal farms andstables, rural roads and/ or schools, financed by people's contributions, thecommune-level People's Committees shall have to organize the implementation ofinvestment and construction according to the Regulation on the mobilization,management and use of voluntary contributions by people for construction ofinfrastructures of communes and district townships; issued together with Decree

No 24/1999/ND-CP of April 16 1999 of the Government:

f) Persons competent to decide the investment must not use the business capital sources for investment in new constructions For a renovation andexpansion project, if the non-business capital source is used for investment at the

non-level of one billion VNdong or more, the investment preparation andimplementationprocedures must be carried out according to the provisions of thisRegulation.

Article 11- Management of investment projects financed by

State-guaranteed credit capital or the development investment credit capital of the State

1 Production and/or business projects of individuals or economic organizations,not belonging to the State enterprises shall comply with Clause 1, Article 13 of thusRegulation

2 Investors of projects of the State enterprises using State-guaranteed creditcapital and/or the development investment credit capital of the State shall have to takeresponsibility for the investment efficiency and repay borrowed capital on time: thelending organizations shall have to appraise the financial plans as well as the debtpayment plans, to supply capital, supervise the use of borrowed capital for the rightpurposes and to recover the lent capital For projects using foreign loan capitalguaranteed by the State, the investors shall also have to fulfill their commitmentsmade when they borrowed the capital according to the provisions of law

3 The competence to decide investment in projects of State enterprises usingState-guaranteed capital and/or the development investment credit capital of the Stateshall comply with the provisions in Clause 2, Article 10 of this Regulation

The Managing Boards of the State corporations may decide investment inGroup C projects Particularly the State corporations directly managed by the PrimeMinister, their Managing Boards may decide investment in Group B and C projects

4 Investors of Group C projects financed by capital sources prescribed inClause 2, this Article, may approve the bidding plans, bidding results, bid handoverand reception contracts, inspect the quality, test and accept projects and make finalsettlement of investment capital according to current regimes and policies of the Statewithin the limit of the total investment and contents inscribed in the investmentdecision, technical designs and total cost estimates already approved by personscompetent to decide the investment The capital-lending organizations shall monitorand inspect the investment execution under the investment decisions and make thefinal settlement of investment capital

The process of investment in Group A and B projects shall comply with theprovisions prescribed for projects financed by State-budget capital

Article 12.- Management of projects using development investment

capital of State enterprises

The competence to decide the investment and the investment execution shall

be stipulated as follows:

1 For Group A projects; the competence to decide investment and theinvestment execution shall comply with the provisions prescribed for projects financed

by State-budget capital;

2 For Group B and C projects, the State enterprises shall base themselves onthe branch development planning already determined to decide the investment: theprocess of investment execution shall be undertaken by enterprises themselves,based on the proper implementation of the State's current regimes and policies oninvestment and construction management in term of norms, unit prices and BiddingRegulation The organizations managing the enterprises' capital and organizationsproviding capital support for projects shall have to inspect the execution of theinvestment decisions and make the final settlement of investment capital .

Article 13.- Management of investment projects financed by other

sources of capital

1 For production and/or business projects of individuals and economicorganizations other than State enterprises, the investors shall have to takeresponsibility for their business efficiency The business operation must comply withthe provisions of law If a project involves construction, the investor shall have tocompile a dossier and submit it to the competent authority for licensing theconstruction according to this Regulation

2 Projects of diplomatic missions, international organizations and other foreignagencies involved in investment and construction on Vietnamese soil shall bemanaged according to treaties or agreements signed with the VietnameseGovernment, and the investors shall have to compile dossiers applying for theconstruction permits as provided for in this Regulation

Article I4.- Investors, their responsibilities and powers

1 Investors:

a) For investment projects of State enterprises, bodies or organizations, usingState-budget capital, State-guaranteed credit capital and/or development investmentcredit capital of the State, the investors and forms of project management shall bedecided by the persons competent to decide the investment;

b) The persons competent to decide the investment shall not concurrently act

as investors; administrative and non-business agencies shall only be the investors ofprojects for construction of material and technical foundations of such agencies;

c) For investment projects of companies or cooperatives, the investors shall bethe representatives at law of such companies or cooperatives; d) For privateinvestment projects, the investors shall be the owners of the investment capital;

e) For projects on development of urban technical infrastructure or projects ondevelopment of new urban areas; the investors shall be decided by the People'sCommittees of the provinces and centrally- run cities according to the followingprinciples:

- The investors are organizations or enterprises assigned or leased land by theState for the implementation of projects:

- The selection of investor in cases where many organizations and/orenterprises want to invest in a project shall comply with the Bidding Regulation

2 The investors shall have the responsibilities and powers:

a) To organize the elaboration of investment projects, clearly determine thecapital sources; fill in investment procedures and submit them to the competentauthorities for approval according to the provisions in Articles 10, 11, 12 and 13 of thisRegulation:

b) To organize the investment execution, including: the organization of bidding

to select contractors, signing contracts and performing contracts already signed withthe contractors as prescribed by law;

c) For investment projects using capital from one or several different sources,the investors shall bear all-round and continuous responsibilities for the management

of the use of such capital sources from the time of investment preparation, investmentexecution to the time of putting projects into exploitation and use, recovering andrefunding the investment capital;

d) To repay the borrowed capital on time and fulfill all terms committed whenmobilizing capital:

e) In case of replacement of investors, the new investors shall have to fullyinherit the investment work of the previous investors:

Where investors directly manage the projects, there must be apparatus fullycapable of managing the projects and being registered at the competent agencies:

g} Investors may request concerned State bodies publicize provisions relating

to investment such as construction planning, land, resources, water and electricitysupply, communications and transport, ecological environment, fire and explosionprevention and combat, the protection of cultural and historical relics, security anddefense, so that they are aware of and implement them

Article 15.- Investment and construction consultancy organizations

1 The investment and construction consultancyorganizations are professionalorganizations of various economic sectors, have the legal person status and registertheir investment and construction consultancy business according to the provisions oflaw

2 The contents of investment and construction consultancy:

To provide information on legal documents, mechanism as well as policiesregarding investment and construction, to elaborate and manage investment projects,

to design and compile bidding dossiers, to supervise and manage the constructionand installation process, to manage expenses for construction, test and acceptprojects;

An investment and construction consultancy organization may sign asubcontract with another investment and construction consultancy organization for theperformance of part of the consultancy task

3 The responsibilities of investment and construction consultancyorganizations:

a) To register investment and construction consultancy activities with thecompetent bodies according to the provisions of law;

b) To be answerable before law and to investors for the commitments made inthe contracts, including the quantity, quality and duration of performance, the accuracy

of products and the quality of their consultancy products;

c) To implement the regime of professional insurance for investment andconstruction consultancy as prescribed by law To widely supply information onoperation capability of enterprises so that investors may know and select

Article 16.- Construction enterprises

1 Construction enterprises are enterprises of all economic sectors, which areestablished according to law and have registered their construction business 2.Responsibilities of construction enterprises:

a) To register construction activities at the competent agencies as prescribed

by law:

b) To be answerable before law and to the investors for their commitmentsmade in the contracts, including the quantity quality and precision of products, thetime for performance of contracts, with stipulations and instructions on the use ofconstruction works before the hand-over, to provide warranty for their constructionproducts and works according to the provisions in Article 54 of this Regulation:

c) To implement the regime of insurance for construction works, takeresponsibility before law for all matters related to the safety of nearby works andprojects being under construction, to effect the labor safety and ecologicalenvironment protection in the course of construction To provide information ontheperation capacity of enterprises so that investors know and make the selectionthereof

Article 17.- Investment plans of the management bodies at different levels

and of State enterprises.

1 To synthesize and balance the investment plans: a) The Ministry of Planningand Investment shall synthesize the investment capital of all economic sectors in thenational economy so as to forecast the macro-balances, in which the investmentbelonging to State-budget capital, including State-budget investment capital, State-guaranteed investment capital, development investment credit capital of the State anddevelopment investment capital of State enterprises; shall be included in plans on thebasis of the provisions in Articles 10, 11 and 12 of this Regulation: the capital forbranch and territorial development planning as well as urban and rural constructionplanning;

b) The plans for investment in the provinces and centrally- run cities shall besynthesized by the provincial/municipal Planning and Investment Services to reflectthe entire investment activities of all economic sectors in the localities:

c) The plans for investment from State-budget capital at different levels must beworked out in conformity with the available capital plans and the approved projectexecution time-table;

d) The investment plans of State enterprises must be balanced and fully reflectthe sources of basic depreciation capital, the after-tax profit accuniulation, capitalmobilized at home and abroad, the State's investment credit capital and the Statebudget support capital (if any)_

2 Execution of investment plans:

a) The State directly manages the execution of investment plans financed byState-budget investment capital; development investment credit capital of the Stateand State-guaranteed credit capital;

b) The national programs and national important projects in the annual plansand each period of economic development shall be decided by the National Assembly:the Prime Minister shall ratify their objectives, time schedule; total investment capitaland investment capital sources as basis for assignment of annual plans to ministriesand localities for implementation:

c) For other economic development programs using the non-business capitaland the State's investment capital, based on the programs' objectives, annually, theMinistry of Planning and Investment shall balance and distribute the investment capitaland the Ministry of Finance shall balance and distribute the non-business capital foreach program and notify this to the program-managing bodies: d) The financial bodies

at all levels shall have to adequately supply capital for the approved projectsaccording to the State plans and the tempo of project execution

Article I8.- Contents of investment plans

1 The capital plans for investigation; surveys and elaboration of branch andterritorial planning, urban and rural construction planning

2 Expenses for investment preparation; including capital for carry ing outinvestigation surveys, making pre-feasibility and feasibility study reports on theprojects, the project evaluation and investment decision The investment preparationplan shall include the list of projects and capital for investment preparation of eachproject

3 The plan on preparation for project execution shall include the capital forcarrying out surveys, technical design, preparation for the construction and otherexpenses related to the preparation for the execution of investment project

4 The plan on investment execution shall include the investment capital for theprocurement of-supplies and equipment, construction and expenses related to biddingand the putting of projects to exploitation and use

5 For the State's development investment credit capital; the Government'sstipulations shall apply

Article 19.- Conditions for projects to be included in annual investment

plans

1 Projects to be included in investment preparation plans must conform to theapproved branch and territorial development planning

2 Projects to be included in plans on preparation for investment execution or

on investment execution must have their investment decisions compatible with theprovisions of this Regulation by October before the plan year

3 Group A and B projects, of which the technical designs and total costestimates have not been approved yet but their investment decisions have alreadydefined the capital level for each project item as well as the designs and costestimates of the items to be constricted in the year, shall be included in the investmentplans: Group C projects must have their technical designs and total cost estimatesapproved

For projects concluded with foreign countries which comprise many projects, each miniproject to be constructed in the year must have its technical designand cost estimate approved by the competent authority

mini-4 Report on the implementation of investmentprojects:

a) The ministries, the ministerial-level agencies, the agencies attached to theGovernment, the State corporations and the provincial-level People's Committeesshall report the situation on the plan execution every quarter, six months, 9 monthsand every year in the first week of the last month of the quarter to the Ministry ofPlanning and Investment; the Ministry of Finance, the Ministn- of Construction andthe General Department of Statistics regarding the mobilization of various capitalsources; the construction volume, the project quality and incident (if any),allocation, settlement, project completion, newly mobilized capability according toform set by the General Department of Statistics,

b) For Group A projects and national important projects, the investors shallhave to report the situation on the execution of the investment plans on the 201, ofeven, month so that the Ministry of Planning and Investment synthesize and reportthem to the Prime Minister and recommend measures to organize theimplementation of investment plans according to schedule

Article 20.- Investment expertise

1 Projects with investment decided by the competent State bodies shall besubject to the investment expertise

2 Investment expertise means the inspection, supervision, analysis andevaluation of each stage or the entire process of investment and construction,made by decisions of the competent authorities defined in Clause 4_ this Article.

3 Investment expertise contents:

a) Expertise of the issuance of investment decisions;

b) Expertise of the arrangement of plans and capital disbursement forinvestment projects;

c) Expertise of the process of organizing the implementation of projects inconformity Nvith the investment decision;

d) Proposing the investment-deciding bodies to reconsider the investmentundertaking (cancellation; suspension, readjustment of investment decisions):

e) Re-evaluating the investment decisions upon the completion of theinvestment process

4 The investment expertise shall be implemented at the levels of the PrimeMinister branch and locality:

a) The Prime Minister shall decide the organization of investment expertise

of projects under his/her competence to decide the investment:

b) The ministers managing branches and the presidents of the level People's Conunittees shall decide the organization of investment expertiseofprojects under the deciding competence of branches and localities

provincial-5 When the investment- expertising organization's proposals are ratif ed byauthorities competent to decide the investment; the concerned organizations andagencies shall have to implement them

6 Organizations conducting the investment expertise shall be answerablebefore law for their expertise conclusions as well as proposals made to thecompetent authorities on handling of investment projects

7 The Ministry of Planning and Investment shall coordinate with the Ministr<,

of Construction and the Ministry, of Finance in providing detailed guidance on theinvestment expertise

Chapter II

INVESTMENT PREPARATION

Article 21- The contents of investment preparation The investment

preparation contents shall include:

1 The study on the necessity to make investment, and the investment scale:

2 Establishing contacts and probing domestic and foreign markets in order

to determine the demand for and the competitiveness of products, seekingsuppliers of equipment and materials for production: considering the investmentcapital capability and selecting the investment forms;

3 Conducting prospections and surveys and selecting the site forconstruction:

4 Elaborating investment project:

5 Forwarding the project dossiers and explanation documents to personscompetent to decide the investment, the investment capital-lending organizationsand the investment project-experti sing agencies

Article 22.- Elaboration of investment projects

1 The investors shall have to make or hire consulting organizations to makepre-feasibility study reports_ feasibility study reports or investment reports

2 For Group A projects the investors shall have to make the pre-feasibilitystudy reports and the feasibility study reports Where the projects have alreadybeen decided by the National Assembly or the Government in term of investmentundertaking, only the feasibility study reports shall be made

a) For Group A projects which have been approved by the Prime Minister interm of their pre-feasibility study reports and allowed to be divided into constituentprojects (mini-projects), such constituent projects (mini-projects) shall have theirfeasibility study reports made like independent investment projects, thereby thesubmission for approval and management of the projects must comply with theregulations prescribed for Group A projects

b) For Group B projects, the investors shall make the feasibily study reports, ifthe pre-feasibility study reports are deemed necessary, the persons competent todecide the investment shall consider, decide and request it in writing

3 For Group C projects capitalized at one billion VNdong or more each, theinvestors shall have to make the feasibility study reports

For projects capitalized at under one billion VNdong, repair and/or consen-ationprojects financed by non-business capital sources and branches' projects with modeldesigns and technical standards already approved by branch-managing ministries onthe basis of the overall planning for each region, separate feasibility study report foreach project is not required but only the investment report The content of theinvestment report shall be guided in detail by the Ministry of Planning and Investment

The feasibility study report is the basic document, through which the investorshave studied, compared and selected the investment options to be sent to theinvestment expertising agencies and submitted to the persons competent to decidethe investment for consideration and decision.

Article 23.- Main contents of the pre-feasibility study report

1 Studying the necessity to make the investment, advantages anddisadvantages

2 Projected investment scale and forms

3 Selecting the area and site for construction and estimating the land area to

be used on the basis of minimizing the land use as well as environmental and socialimpacts and resettlement (-,with detailed analysis and evaluation)

4 Analysis and preliminary selection of technologies and techniques (includingboth cultivated crops and reared animals, if any) and terms for the supply ofequipment, raw materials, fuels, services, infrastructure

5 Analysis and preliminary selection of construction options

6 Preliminarv determination of the total investment, plans for capitalmobilization, capability to refund the capital, repay debts and earn profits

7 Preliminary calculation of the investment efficiency in term of the economic aspects ofthe project

socio-8 Determination of the operation and exploitation independence of theconstituent projects or miniprojects (if any)

For projects on procurement of equipment and machinen without installation,the contents of the pre-feasibility study report shall only comply with Clauses 1 2 4,

6, 7 and 8 of this Article

Article 24.- Main contents of the feasibility study report.

1 Grounds to determine the necessity of investment

2 The selection of investment form

3 Production program and conditions to be met (for projects involvingproduction)

4 Options for specific site (or site area, constructions line) compatible Nvith theconstruction planning (including documents on site selection with proposed measures

to minimize the environmental and social impacts)

5 Plans for ground clearance, resettlement plans (if any)

6 Analysis and selection of technical and technological options (includingcultivated crops and reared animals, if any)

7 Architectural options, construction solutions, preliminary designs of plansproposed for selection, solutions for management and protection of environment.

8 Clear determination of capital sources (or types), financial capability, totalinvestment amount and demand for capital according to tempo Plans to refund theinvestment capital (for projects requiring the recovery of investment capital)

9 Plans on management of the project exploitation and labor employment

10 Analysis of investment efficiency

11 Major time targets for investment execution Group C projects requireimmediate elaboration of bidding plans For Group A and B projects, the bidding plansmay be drawn up after the issuance of investment decisions (depending on specificconditions of projects) The time to start the construction (at the latest), the time forcompletion and putting projects into exploitation and use (at the latest)

12 Proposing forms of managing the project execution

1

3 Identification of investors

14 Relationships and responsibilities of agenciesinvolved in the projects

For projects on procurement of equipment and machinery without installation

the contents of the feasibility study report shall only comply with Clauses 1 2, 6, 8 9,

10, 11, 12, 13 and 14 of this Article

Article 25.- The total investment

1 The total investment shall include expenses for investment preparation,expenses for investment execution preparation, expenses for investment andconstruction implementation, expenses for production preparation, interests on bankloans by investors during the time of investment execution initial floating capital forproduction (for production projects); insurance premiums, reserve expenses

For Group A projects and a number of projects with special requirementspermitted by the Prime Minister, the total investment shall also include expenses forscientific and technological studies related to the projects

2 The total investment may be adjusted only in the following cases:

a) The State promulgates new regulations with changes to the investment andconstruction price levels:

b) It is due to a change in the exchange rate between Vietnam dong and theforeign currency used for the part of the project (if in the total investment, the foreigncurrency amount to be used was not inscribed)

c) It is due to force majeure circumstances

3 For national important projects approved and decided by the NationalAssembly in term of policy, the total investment shall be officially determined after thefeasibility study report is appraised by the competent body and approved by thepersons competent to decide the investment.

4 The Ministry of Planning and Investment shall guide the detailed content ofthe total investment

Article 26.- Appraisal of investment projects

1 The investment projects financed by Statebudget capital, State-guaranteedcredit capital, development investment credit capital of the State and investmentcapital of State enterprises must be appraised The appraisal of investment projectsmust be conducted by the State's competent functional bodies and State-run creditinstitutions (for projects financed by credit capital)

The investors shall have to submit their feasibility study reports to personscompetent to decide the investment and at the same time to bodies with appraisalfunction as provided for in Clause 6, this Article

2 With regard to pre-feasibility study reports on Group A projects, the investorsshall directly submit them to the Prime Minister and at the same time to the Ministry ofPlanning and Investment, the Ministry of Finance as well as the branch-managingministry for consideration before reporting them to the Prime Minister Only when thePrime Minister's written approval is obtained can they make the feasibility studyreports or continue to probe, negotiate and sign agreements among the investmentpartners before making the feasibility study reports

For national important projects passed and decided in term of investment policy

by the National Assembly the Ministry of Planning and Investment shall have toappraise the pre-feasibility study reports and report them to the Government forsubmission to the National Assembly

3 Projects entitled to the elaboration of investment reports shall not beappraised The investors shall have to submit to the persons competent to decide theinvestment the investment report for consideration before deciding the investment

4 For new urban area projects (or constituent projects) which are in line withthe detailed planning and infrastructure development projects already approved by thecompetent State bodies, only the feasibility study reports are appraised

5 The Ministry of Planning and Investment provides guidance on the dossiers

of investment project appraisal

6 Competence to appraise investment projects: a) For Group A projects:

The Ministry of Planning and Investment which assumes the primeresponsibility for the appraisal shall have to gather comments of the branch-managingministry as well as concerned ministries and localities Depending on the specificrequirements of each project, the Ministry of Planning and Investment may inviteconsulting organizations and experts from concerned ministries to take part in theappraisal of projects

For projects financed by development investment credit capital of the State, thecapital-lending organizations shall appraise the financial plans and the debt paymentplans before submitting them to the persons competent to decide the investment.

b) For Group B and C projects financed by Statebudget capital, guaranteed credit capital or development investment credit capital of the State:

State The persons competent to decide the investment shall use their qualifiedprofessional bodies to organize the appraisal, or may invite professional bodies fromconcerned ministries and branches to appraise the projects - For projects under theprovincial-level management, the provincial/municipal Planning and InvestmentServices, acting as the coordinator for organizing the project appraisal, shall have

to gather comments from concerned bodies

- The capital-lending organizations shall appraise the financial plans anddebt payment plans and agree to provide loans before submitting them to thepersons competent to decide the investment

Article 27.- Contents of the investment project appraisal

l Investment projects financed by State-budget capital, State-guaranteedcredit capital, development investment credit capital of the State or investmentcapital of State enterprises must be appraised in term of

a) The compatibility with the planning on branch and/or territorialdevelopment, the planning on urban and rural construction:

b) The regime on national resources exploitation and use (if any);

c) The State's preferences and/or support which may be enjoyed byinvestment projects under the common regimes:

d) Technological options and production scale; usage capacity;

e) Architectural options, the application of construction criteria andstandards:

f) The use of land and natural resources, the protection of ecologicalenvironment, the plan on resettlement (if any);

g) Fire and explosion prevention and combat, labor safety and social aspects

2 Projects using State budget capital, the State's investment credit capitaland/or State-guaranteed credit capital must also have their financial conditions,prices, investment efficiency and debt-repayment plans appraised.

Article 28.- The State Council for Appraisal of Investment Projects

The State Council for Appraisal of Investment Projects shall be set up by thePrime Minister's decision in order to appraise investment projects

Depending on the size, nature and necessity of each project, the PrimeMinister shall request the State Council for Appraisal of Investment Projects toappraise or reappraise the project before deciding theinvestment

Article 29.- Time-limit for appraisal of investment projects after receipt

of full and valid dossiers

1 For Group A investment projects: The appraisal time-limit shall not exceed

3 Form of project nlanagernent:

4 Location, the land area in use, environmental protection options andresettlement and rehabilitation plans (if any);

5 Technology(ies), designed capacity, architectural options, technicalstandards and grade of the project:

6 The national resources exploitation and use regime (if anit

7 The total investment;

8 Investment capital sources financial capability and capital plan of theproject;

9 The State's preferences and support ,vIlich may be enjoyed by the projectaccording to the common regulations;

10 Mode of project implementation The principle for division of bidpackages and form of selection of contractors Group C projects require immediate

elaboration of bidding plans, while for Group A and B projects, the bidding planmay be drawn up after the issuance of investment decisions:

11 The time for construction and major time targets for the projectexecution The time for starting the construction (at the latest); the time ofcompletion and putting the project to exploitation and use (at the latest):

12 The relationships and responsibilities of the concerned ministries,branches and localities (if any) The implementation effect

Article 31- Change of investment project contents

1 The investment projects with the investment therein having already beendecided may have their contents changed only in special cases When the change

of contents is needed, the concerned investors shall have to explain the reasonstherefor and the to be-changed contents for submission to the persons competent todecide the investment for consideration and decision

2 Only after the change of the project contents is permitted in writing by thecompetent persons can the project be re-appraised and re-submitted in accordancewith the regulation The investment scale must not be altered when the project is yetput into exploitation and use

3 A project shall be suspended, postponed or cancelled in the following cases:

.a) 12 months after the issuance of the investment decision, the investor fails toexecute the project without a written approval of the competent person:

b) The project's objectives'have been changed without the written permission ofthe competent person;

c) The project execution prolongs for more than 12 months as compared to thetime schedules stated in the investment decision without any sound reasons andwithout the approval of the competent person

4 The persons competent to decide the suspension, postponement orcancellation of investment projects must clearly determine the reasons and beanswerable before law for their decisions Investors who let their investment projects

be suspended or postponed without any sound reasons shall have to bear theresponsibility before law for the damage caused thereto

Article 32.- Fund for elaboration and appraisal of investment projects

1 Investment projects financed by any sources of capital shall have fund fromsuch sources for project elaboration and appraisal For projects without sources ofinvestment capital being identified yet, including projects to be supported by theState's investment credits, the investors shall use their own lawful capital sources orborrow bank capital for execution of their projects, which shall be refunded after theofficial capital sources are determined