Laws of Vietnam

DECREE No. 92-CP OF AUGUST 23, 1997 AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE REGULATION ON THE MANAGEMENT OF CONSTRUCTION AND INVESTMENT ISSUED TOGETHER WITH DECREE No. 42-CP OF JULY 16, 1996

THE GOVERNMENT

DECREES:

Article 1.- To issue together with this Decree a number of articles to amend and supplement the Regulation on the Management of Investment and Construction issued together with Decree No. 42-CP of July 16, 1996.

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

Article 3.- The Minister of Construction shall assume the primary responsibility and coordinate with the Minister of Planning and Construction, the Minister of Finance, the heads of the concerned ministries and branches to guide and supervise the implementation of the amendments and supplements to the Regulation on the Management of Investment and Construction issued together with this Decree.

Article 4.- The ministers, the heads of the ministerial-level agencies and agencies attached to the Government, the presidents of the People’s Committees of the provinces and cities directly under the Central Government, the Managing Boards of State Corporations shall have to implement this Decree.

On behalf of the Government

The Prime Minister

VO VAN KIET

Article 6.- State management responsibilities for the control of investment and construction

To amend and supplement Clause 2 and Clause 4 as follows:

- Clause 2: The Ministry of Construction:

The Ministry of Construction shall study and work out the mechanism and policy for the management of construction as well as the urban and rural construction plan, then submit them to the Prime Minister for approval and promulgation or it may be authorized by the Prime Minister to issue them; issue or agree to let the ministries in charge of specialized construction issue the criteria, rules and regulations on the management of project quality and construction economics (a system of economic and technical norms and standards in construction, standard prices and construction unit price). It shall exercise uniform State management over the quality of construction projects and the granting of qualification certificates to construction and installation consulting enterprises. It shall assume the primary responsibility and coordinate with the Ministry of Planning and Investment, the Ministry of Finance and the ministries, branches and localities to guide and supervise the implementation of the Regulation on the Management of Investment and Construction.

- Clause 4. The State Bank of Vietnam:

The State Bank of Vietnam shall study the mechanisms and policy for the State management of currencies and bank credits in investment and construction and submit them to the Prime Minister for promulgation or it may be authorized by the Prime Minister to promulgate them. It shall guide the Investment and Development Bank, commercial banks and other financial and credit organizations in mobilizing capital from various sources inside and outside the country so as to provide long-term and medium-term loans for projects and short-term loans in service of development investment, production and business; implement the regime of bidding participation security and contract performance security for Vietnamese contractors when they participate in international biddings as prescribed by the Prime Minister; implement the regime of loan security, as well as security for contracts for supplies and equipment procurement through international bidding for investment projects of the State according to the stipulations of the Government. The banks themselves shall decide the loans from their mobilized capital and recovery of debts at market interest rates.

Article 7.- Competence to decide the investment, permit the investment and grant investment licenses.

To amend and supplement Clause 1 as follows:

1. Competence to decide the investment in State-funded projects.

a/ The Prime Minister shall decide the investment in the projects of Group A.

b/ The ministers, the heads of the ministerial-level agencies and the agencies attached to the Government, the People’s Committees of the provinces and cities directly under the Central Government shall decide the investment in the Groups B and C projects. For projects of Group B, prior to the decision on investment, consent must be obtained from the Minister of Planning and Investment to the investment plan and from the minister of the parent ministry of the branch to the general planning for the branch development and the economic and technical contents of the project.

c/ The general departments and departments under the ministries shall be authorized by the ministers to decide the investment in Group C projects.

d/ The Managing Boards of the Corporations established under Decision No. 91-TTg of March 7, 1994 of the Prime Minister may decide the investment in Groups B and C projects which are funded by commercial loans and investment capital of State enterprises. For projects of Group B, prior to the decision on investment, consent must be obtained from the Minister of Planning and Investment to the investment plan and from the minister of the parent ministry of the branch to the general planning for the branch development and the economic and technical contents of the project.

Special cases which fall outside the above provisions must get permission from the Prime Minister.

e/ The Managing Boards of the Corporations established under Decision No. 90-TTg of March 7, 1994 of the Prime Minister may decide the investment in Group C projects which are funded by commercial loans and investment capital of State enterprises.

f/ The presidents of the People’s Committees of Hanoi and Ho Chi Minh City may authorize the presidents of the district People’s Committees to decide investment in the projects capitalized at less than 2 billion VND each, depending on the specific conditions of each city and on the sources of capital. For other provinces and cities, the presidents of other provincial/municipal People’s Committees may authorize the presidents of the district People’s Committees to decide investment in the projects capitalized at less than 500 million VND each, depending on the specific conditions of each locality.

Article 8.- Responsibilities of the investors and the construction consulting organizations, equipment suppliers and construction and installation organizations.

To amend and supplement this Article as follows:

1. Responsibilities of the investor:

a/ Investors shall have to organize the execution of investment projects through contracts made under current laws.

b/ Investors may use capital of different sources as prescribed by this Regulation to draw up projects and shall take the responsibility for the comprehensive and continuous management of the utilization of these investment capital sources from the time the project is drawn up till it is completed and put into operation according to the requirement set in the approved projects.

c/ Investors shall be responsible for the quality of the whole project

d/ The investor shall have to repay the loans as well as the mobilized capital on schedule and under other conditions committed during the capital mobilization.

e/ In case of the change of an investor the successor shall have to take over the whole invested work from his/her predecessor.

f/ If the investor is an enterprise in any form of ownership and goes bankrupt, the investment already made by such investor shall be dealt with in accordance with the Law on Bankruptcy.

g/ When compiling the dossier on the pre-feasibility and feasibility studies, the investor shall have the duty and right to request the concerned State agencies to provide guidance on questions related to the project such as construction planning, land, natural resources, water source, electricity, transport and communications, ecological environment, fire and explosion prevention and combat, protection of historical and cultural relics, defense and security, and shall have to strictly observe all the State regulations on the above-mentioned issues throughout the course of investment and construction.

2. The investment and construction consulting organizations (survey, designing, management of the project implementation...), the equipment and supplies providers and the construction and installation organizations shall have to fully perform the contracts signed with the investor or the project manager and shall be accountable before law for the result of the contract performance.

Article 10.- Planning of investment.

To amend and supplement Clause 5 as follows:

5. The contents of and conditions for inclusion of projects into investment plans and reporting on their execution are provided for as follows:

a/ The investment plan shall include:

- The plan on funding for survey and prospection, for branch and territorial planning , and for urban and rural construction planning.

- The plan on preparation for investment which includes the investment capital for conducting the prospection and survey, making the pre-feasibility and feasibility studies of the project, evaluating the project and deciding the investment.

- The plan on preparation for the project implementation which includes the capital for conducting survey and technical designing, elaborating the estimate of expenditures, compiling the bidding invitation dossier, building the auxiliary constructions and make-shifts for construction workers, if required by the project and permitted by the competent level, and expenditures on the preparation for the implementation of related works.

- The project implementation plan which includes the investment capital for the procurement of supplies and equipment, for construction and other expenditures related to the putting of the project into operation.

b/ Conditions for inclusion of projects in the annual investment plan:

- The projects to be recorded in the investment preparation plan must be included in the branch and territorial development planning.

- The projects to be recorded in the preparation plan on project implementation must have investment decisions in conformity with the provisions of this Regulation.

- The projects of Groups A and B, which have no technical design and approved total cost estimate but have the capital level for each part of the project defined in their investment decisions, shall be recorded in the investment plan.

For a project signed with a foreign partner and composed of several sub-projects, each sub-project to be constructed in the year must have its technical design and cost estimate approved by the competent level.

c/ Reporting on the situation of the plan execution:

The ministries, the ministerial-level agencies, the agencies attached to the Government, the corporations established under Decision No. 91-TTg of March 7, 1994 of the Prime Minister and the provinces and cities directly under the Central Government shall report on the situation of the plan execution every quarter, six months, nine months and year within the first week of the last month of a quarter to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Construction and the General Department of Statistics regarding the mobilization of capital from various sources, construction volume, allocations and payment, completed projects and newly mobilized capabilities according to the model forms issued by the General Office of Statistics. For Group A projects, the investor must submit his/her report on the implementation situation on the 25th day of every month so that the Ministry of Planning and Investment makes a general report and submit it to the Prime Minister.

Article 14.- Principal contents of the report on the feasibility study.

To amend and supplement this Article as follows:

The principal contents of the report on the feasibility study include:

1. Bases for determining the necessity of investment.

2. Selection of the form of investment.

3. The production schedule and the factors to be satisfied.

4. Options for particular sites (or a system of projects) in conformity with the construction planning.

5. The ground clearance plan.

6. Analysis for the selection of the technological and technical option.

7. Design options and construction solutions

8. Organization for the management and use of labor.

9. Financial and economic options.

10. The major landmarks in the investment execution timetable. For Group C projects, a bidding plan may be elaborated right at this stage.

The details of the reports on the pre-feasibility study and feasibility study shall comply with the guidance of the Ministry of Planning and Investment and the Ministry of Construction.

Article 22.- Contents of the implementation of an investment project.

To amend and supplement this Article as follows:

The contents of the implementation of an investment project include:

1. Applying for the allocation or lease of land as prescribed by the State (including water surface or sea surface);

2. Organizing the compensation for site clearance and preparing the construction site.

3. Organizing the selection of consultants in survey, designing, control of technical issues and quality of the project;

4. Evaluation of the project design and total cost estimate;

5. Organizing bidding for the purchase of equipment and for construction and installation;

6. Applying for the construction permit (if required) and the permit for the exploitation of natural resources (if any);

7. Signing a contract with the contractor for the implementation of the project;

8. Starting to construct and install the project;

9. Monitoring and supervising the performance of the contract;

10. Making the final accounts of the construction investment capital after the project is completed and put into use.

Article 27.- Evaluation and approval of the technical design and the total cost estimate.

All construction investment projects from any sources of capital and economic sectors must have their designs evaluated by specialized agencies before their construction

1. With regard to construction investment projects funded by Stale capital:

a/ Projects of Group A:

- If a project (or a bidding package) appoints its contractor(s), its technical design and total cost estimate (or cost estimate) shall be approved by the head of the parent ministry after its technical design has been evaluated by a specialized agency and its total cost estimate evaluated by the Ministry of Construction.

- If a project (or a bidding package) organizes a bidding, its technical design shall be approved by the parent ministry after it has been evaluated by the specialized agency. The parent ministry shall submit a set of the approved technical design dossier and the written approval of the bidding result to the Ministry of Construction for monitoring and making recommendations for handling when necessary.

b/ Projects of Groups B and C:

Their technical designs shall be approved by the person competent to decide the investment after they have been evaluated by the specialized agency.

If a project (or a bidding package) appoints its contractor(s), its total cost estimate (or cost estimate) shall be approved by the person competent to decide the investment after it has been evaluated by the construction management agency. The construction management agency of a corporation is the Corporation’s agency which manages investment and construction. The construction management agency of a province or city directly under the Central Government is the provincial/municipal construction service.

2. The evaluation of the technical design of a project built with foreign direct investment shall comply with a separate guidance.

3. For an investment project not using State capital, its investor shall have to hire a consulting organization with the legal person status to evaluate its construction technical design.

Article 28.- Construction permit.

To amend and supplement this Article as follows:

1. All projects of new construction, renovation, repair or change of function or utility purpose in urban and suburban areas must apply for a construction permit. The projects the investment of which has been decided by the competent authority shall immediately apply for construction permits. The projects of which investment decisions are not required may compile immediately a dossier applying for a construction permit. The time for considering and granting a construction permit shall not exceed 30 days after full reception of the dossier.

The dossier applying for a construction permit includes:

- The application for a construction permit (made by the investor).

- The investment decision or investment license (if any).

- Papers proving the land-use right (the decision to assign or lease the land or the certificate of the land-use right) or the ownership of the project.

- Project designing documents (including only the design drawings: level ground, vertical and sectional planes).

The following cases shall be exempt from a construction permit:

a/ Group A projects of which the Prime Minister has decided the investment and the technical designs have been approved by the competent level. But before commencing the construction, the investor shall have to submit a dossier of the project construction design to the concerned provincial/municipal People’s Committee for monitoring, supervision and filing.

b/ Minor repairs which do not affect the structure of adjacent houses and the street frontage as prescribed in Article 18 of Decree No. 91-CP of August 17, 1994 of the Government on the management of urban planning.

2. The competence to issue construction permits is stipulated as follows:

a/ The president of the People’s Committees of a province or city directly under the Central Government shall issue construction permits to projects located on the territory under his/her management at the proposal of the Director of the provincial/municipal Construction Service.

The president of the People’s Committees of a province or city directly under the Central Government may authorize the Director of the provincial/municipal Construction Service to directly issue construction permits to projects located on the territory under his/her management.

Once authorized to issue a construction permit, the Director of the provincial/municipal Construction Service shall be responsible for completing the administrative procedures as prescribed by law and regularly reporting to the president of the People’s Committee of the province or city directly under the Central Government on the situation of construction permit granting in his/her locality.

b/ The president of the People’s Committee of a urban or rural district, provincial town or city may issue construction permits to separate privately owned residential houses and small-scale projects according to the assignment by the president of the People’s Committee of the province or city directly under the Central Government. The granting of construction permits to the projects of this group shall comply with the professional instruction of the Director of the provincial/municipal Construction Service.

Depending on the specific conditions of each locality, the Director of the provincial/municipal Construction Service shall draw up the plan for organizing the granting of construction permits, categorize and delineate areas and locations where projects are to be granted construction permits so that the president of the People’s Committee of the province or city directly under the Central Government may decide.

For Hanoi and Ho Chi Minh cities, the regulation on the granting of construction permits (including the categorization and delineation of areas where construction permits are to be granted) shall be issued by the president of the municipal People’s Committee after consulting the Ministry of Construction.

c/ The managing board of an export processing zone or a concentrated industrial zone established by decision of the Prime Minister is entitled to grant construction permits for projects located within the boundaries of the processing zone or industrial zone in accordance with the provisions of law and the professional guidance of the Director of the provincial/municipal Construction Service.

3. The Ministry of Construction shall provide guidance on the procedure of granting construction permits.

Article 31.- Contracts on consultancy, equipment procurement, construction and installation.

To amend and supplement this Article as follows:

1. After receiving the written approval of the bidding results by the competent level, the investor shall have to negotiate for the finalization and signing of the contract with the bid winner in accordance with the State Regulation on Bidding.

2. If the contractor is appointed, the investor must base himself/herself on the approved technical design and total cost estimate (or cost estimate) to negotiate and sign the contract in accordance with the provisions of the legislation on contracts.

3. If the contract is signed with a foreign organization, it must also be submitted to the person competent to decide the investment for approval of its contents.

4. For the contracts belonging to Group A projects, the Prime Minister shall assign the ministers, the presidents of the People’s Committees of the provinces and cities directly under the Central Government, the Managing Boards of the Corporations established under Decision No. 91-TTg of March 7, 1994 of the Prime Minister to approve their contents.

5. If the investor signs a contract of his/her own free will in contravention of the above-mentioned provisions, the capital-granting agency shall not give any capital or loan and he/she shall be disciplined depending on the extent of the violation.

Article 32.- Conditions for starting the construction of a project.

To amend and supplement this Article as follows:

All projects shall have to meet the following conditions before being constructed:

1. Having a construction permit (for projects that are required to have construction permits);

2. For projects that use State capital:

- Having the written approval of the bidding result and the written approval of the contract (for projects for which international bidding has been organized).

- Having the total cost estimate (or cost estimate) approved by the competent level (for projects with the appointed contractor).

3. Having a valid contract on bid assignment and acceptance.

Article 47.- Turn-key projects:

To amend and supplement this Article as follows:

1. The investor shall organize a bidding of the project to select a contractor (general construction contractor) to carry out the whole project (designing, purchase of supplies and equipment, construction and installation...). The investor shall submit for approval only the technical design and total cost estimate, test on completion and take over the project when it is completed and put into use. The general construction contractor can subcontract to other sub-contractors the survey, designing, purchase of equipment or part of the construction and installation volume.

2. This form shall apply to the construction of infrastructure projects, residential houses, civil projects, production and business projects or projects permitted by the competent level.

Article 48.- Self-performance projects:

To amend and supplement this Article as follows:

1. The investor shall use his/her own construction workforce for carrying out the self-performance construction and installation work.

2. This form shall apply only to small-scale repair and renovation projects, particularly specialized projects (agro-forestry construction) and self-invested projects for the construction of technical and material basis of construction enterprises, including construction products funded by the enterprises themselves.

On behalf of the Government

The Prime Minister

VO VAN KIET