General regulations on public investment in Vietnam.

Public investment is a very important activity of state agencies. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are public investment objects in Vietnam? What are regulations on Classification of public investment projects? Thanks for answering my questions”

Legal grounds

• 2019 Vietnam Law on Public Investment

Regulations on Public investment objects

– Investment in socio-economic infrastructure construction programs and projects

Where really necessary, compensation, support and residential resettlement activities in investment projects of national significance may be divided into separate projects, subject to the National Assembly’s evaluation and decision; with respect to those activities in group-A investment projects, subject to the evaluation and decision of the Prime Minister or provincial-level People’s Council under their respective delegated powers. Projects may be separated when approving investment policies for investment projects of national significance and group-A investment projects.

– Investment in giving support to activities of state regulatory authorities, public service units, political organizations and socio-political organizations.

– Investment in and support given to investments in provision of public utility and social welfare products and services.

– Investment of the State in participation in implementing projects in the public-private partnership form.

– Investment in providing support for formulation, evaluation of and decision on or approval, public disclosure and modification of planning schemes as per law on planning.

– Investment in granting subsidies to offset preferential lending interest rates; making equity contribution to the charter capital of policy banks and state off-budget financial funds; providing investment support for other policy beneficiaries under the Prime Minister’s decisions.

The Government shall promulgate regulations procedures and processes for carrying out investment that are applied to those beneficiaries specified in this clause.

Classification of public investment projects

– Public investment projects can be classified by their characteristics as follows:

+ Projects with construction constituents constitute investment projects in new construction, renovation, upgradation and expansion of existing investment projects, including purchase of project-controlled assets and equipment;

+ Projects without construction constituents refer to investment projects in purchasing assets, acquiring transferred land use rights, procuring, repairing and upgrading equipment, machinery and other projects that are not prescribed in point a of this clause.

– Public investment projects may be classified by the level of significance and scale into investment projects of national significance, group-A, group-B and group-C investment projects according to criteria referred to in Article 7, 8, 9 and 10 herein.

Criteria for classification of investment projects of national significance

Investment projects of national significance constitute independent investment projects or a complex of closely connected construction projects, and must meet one of the following criteria:

– Using public investment capital worth 10,000 billion dong or above;

– Having substantial environmental impacts or posing potential risks in making serious environmental impacts, including the following projects:

+ Nuclear power plants;

+ Those projects using land subject to the requirement for conversion of land use purposes from land in national parks, nature reserves, protected landscapes, research and experimental forests covering an area of 50 hectares or more; upstream protective forests covering an area of 50 hectares or more; protective forests, used as wind, sand screens, wave breakers, and for reclaiming land from the sea and protecting environment, that cover an area of 50 hectares or more; production forests covering at least 1,000 hectares;

– Using land subject to the requirement for conversion of land use purposes from arable land for growing wet rice during at least two cropping seasons which covers an area of 500 hectares or more;

– Moving and resettling at least 20,000 inhabitants in mountainous areas or at least 50,000 inhabitants in other regions;

– Requiring special legal frameworks or policies subject to the National Assembly’s resolutions.

Criteria for classification of group-A investment projects

Except investment projects of national significance specified in Article 7 herein, projects falling under one of the following criteria shall be classified as group-A investment projects:

– Those projects falling into the following circumstances, irrespective of the gross investment:

+ National defence and security projects rated top secret;

+ Hazardous and explosive production projects;

+ Investment projects in construction of infrastructure of industrial parks, export processing zones and hi-tech parks;

– Those projects with the gross investment worth 2,300 billion dong or greater in the following fields:

+ Transport, including bridges, seaports, inland ports, airports, railways and national highways;

+ Electric power industry;

+ Oil and gas production;

+ Chemical, fertilizer and cement production;

+ Machine manufacturing and metallurgy;

+ Mining and mineral processing;

+ Construction of residential buildings;

– Those projects with the gross investment worth 1,500 billion dong or greater in the following fields:

+ Transport, except those projects specified in point a of clause 2 of this Article;

+ Water resources and irrigation;

+ Water supply and drainage, waste treatment and construction of other technical infrastructure;

+ Electrical engineering;

+ Production of communication and electronic equipment;

+ Pharmaceutical chemistry;

+ Production of materials, except those projects specified in point d of clause 2 of this Article;

+ Mechanical engineering projects, except those projects specified in point dd of clause 2 of this Article;

+ Post and telecommunications;

– Those projects with the gross investment worth 1,000 billion dong or greater in the following fields:

+ Agricultural, forestry and aquacultural production;

+ National parks and nature reserves;

+ Technical infrastructure of new urban zones;

+ Industry, except for those projects in the industrial sectors specified in clause 1, 2 and 3 of this Article;

– Those projects with the gross investment worth 800 billion dong or greater in the following fields:

+ Health, culture and education;

+ Scientific research, information technology, radio and television broadcasting;

+ Treasure;

+ Tourism, sport and physical activities;

+ Civil construction, except construction of residential buildings specified in point g of clause 2 of this Article;

+ Projects developed in the national defence and security field, except those projects specified in clause 1, 2, 3 and 4 of this Article.

Criteria for classification of group-B investment projects

– Those projects in the fields specified in clause 2 of Article 8 herein with total investment worth from 120 billion dong to less than 2,300 billion dong.

– Those projects in the fields specified in clause 3 of Article 8 herein with the gross investment worth from 80 billion dong to less than 1,500 billion dong.

– Those projects in the fields specified in clause 4 of Article 8 herein with the gross investment worth from 60 billion dong to less than 1,000 billion dong.

– Those projects in the fields specified in clause 5 of Article 8 herein with the gross investment worth from 45 billion dong to less than 800 billion dong.

Criteria for classification of group-C investment projects

– Those projects in the fields specified in clause 2 of Article 8 herein with the gross investment worth less than 120 billion.

– Those projects in the fields specified in clause 3 of Article 8 herein with total investment worth less than 80 billion.

– Those projects in the fields specified in clause 4 of Article 8 herein with the gross investment worth less than 60 billion.

– Those projects in the fields specified in clause 5 of Article 8 herein with the gross investment worth less than 45 billion.

Modification of criteria for classification of public investment projects

– The National Assembly shall have authority to make its decision on modification of criteria for classification of projects of national significance referred to in Article 7 herein.

– The Government shall be charged with petitioning the National Assembly Standing Committee to seek its decision on modification of criteria for classification of public investment projects prescribed in Article 8, 9 and 10 herein and reporting to the National Assembly in the upcoming meeting session.

– Criteria for classification of public investment projects specified in clause 1 and 2 of this Article may be modified in the event that the price index has varied critically and there is a major adjustment in decentralization of public investment management powers related to criteria for classification of public investment projects or existence of other important elements affects criteria for classification of public investment projects.

Public investment management principles

– Comply with law on management and use of public investment capital.

– Conform to the national socio-economic development strategy, the national socio-economic development plan during the 5-year period and other relevant planning schemes prescribed in law on planning.

– Duly implement stipulated responsibilities and powers of state regulatory authorities, entities and persons involved in management and use of public investment capital.

– Manage the use of public investment capital classified by specific funding sources in accordance with regulations; ensure that investment is made on a concentrated and consistent manner, meets required quality standards, is economical and effective, and capability of balancing resources; avoid any waste and loss.

– Ensure transparency and public disclosure of public investment activities.

Tasks involved in state management of public investment

– Promulgate and direct implementation of legislative documents on public investment.

– Design and lead the implementation of public investment strategies, programs, plans, solutions and policies.

– Monitor and provide information about management and use of public investment capital.

– Assess effectiveness of public investment; check, inspect and oversee compliance with laws on public investment and conformance to public investment plans.

– Impose sanctions for violations against law, handle complaints and denunciations of entities and persons involved in public investment activities.

– Offer rewards to entities and persons who have delivered good performance of public investment activities.

– Enter into international cooperation in public investment.

Transparency and public disclosure of public investment activities

– Public investment information that must be made publicly available and transparent, including:

+ Regulatory framework, laws and conduct of implementation of laws and policies during the period of management and use of public investment capital;

+ Principles, criteria for distribution of public investment capital and limits of distributed investment funds;

+ Principles, criteria and bases for compiling the portfolio of investment projects in the mid-term and annual public investment plan;

+ Public investment plans and programs to be developed at localities; funding for each program in specific years and progress of implementation and disbursement of funds for public investment programs;

+ Portfolio of investment projects to be developed at localities, including scale, gross investment, time and location; report on assessment of overall impacts of each investment project on receiving localities;

+ Plan for distribution of mid-term and annual public investment capital, including the portfolio and public investment capital amounts allocated to specific investment projects;

+ Current situations of mobilization of resources and other funding sources used as capital participation in implementation of public investment projects;

+ Current situations and results of implementation of public investment plans, programs and projects;

+ Implementation and fund disbursement progress;

+ Results of acceptance testing and assessment of public investment programs and projects;

+ Final accounts of public investment capital.

– Heads of regulatory authorities, organizations and affiliates thereof must make a public disclosure of such public investment information in accordance with laws.

Prohibited acts of public investment

– Issuing decisions on investment policies that are not conformable to public investment strategies, plans and programs; in which funding sources and capital balancing capability are not defined; ultra vires or in breach of legally required processes and procedures.

– Issuing decisions on investment in public investment programs or projects without obtaining the competent authority’s decisions on investment policies or in breach of requirements concerning objectives, scope, scale or in excess of total investment specified in investment policies decided by competent authorities. Issuing decisions on adjustment in the gross investment in public investment programs or projects in violation of regulations enshrined in law on public investment.

– Abusing assigned titles and powers to appropriate, make personal gain from and commit corrupt acts while managing and using public investment capital.

– Program or project owners collude with consulting organizations and contractors in issuing decisions on investment policies and decisions on public investment programs or projects that result in any loss or waste of state capital, property and national resources, and harms or infringement on legitimate interests of single citizens and the public.

– Giving, taking bribes and acting as kickback brokers.

– Requesting entities and persons to put investment at their own expense when public investment programs or projects have not yet obtained decisions on investment policies, approval or incur debts accruing from capital construction activities.

– Using public investment capital for wrongful purposes, to serve incorrect beneficiaries, in excess of standards and limits prescribed in law.

– Counterfeiting and falsifying information and documents related to decisions on investment policies, investment decisions and implementation of public investment programs or projects.

– Deliberately reporting and providing incorrect, untrue and impartial information that may affect formulation, evaluation of and decision on public investment plans, programs and projects, and monitoring, assessing, examining, inspecting and imposing sanctions for any violation arising from implementation of public investment plans, programs and projects.

– Deliberately damaging, lying about, concealing or storing an inadequate number of documents and evidences relating to decisions on investment policies, investment decisions and implementation of public investment programs and projects.

– Hindering discovery of any violation against law on public investment.

Please see more:

• Instructions for exclusive registration of company logos in Vietnam
• Service of changing the legal representative of Vietnamese enterprises

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