Vietnam law has regulations on construction investment projects. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are regulations on classification of construction investment projects? What are regulations on Order of construction investment? Thanks for answering my questions!”
Legal grounds
- 2014 Vietnam Construction Law
Classification of construction investment projects
– Construction investment projects shall be classified by size, characteristic and type of construction work and funding source.
– Construction investment projects classified by size, characteristic and type of construction works include national important projects, group-A projects, group-B projects, group-C projects according to the criteria prescribed by the law on public investment.
– A construction investment project may comprise a single work or multiple works of different types and grades.
Regulations on Order of construction investment
– The order of construction investment involves three stages, including project preparation, project implementation and construction completion to put the project’s work into exploitation and use, except the construction of separate houses.
– For national important projects or group-A projects with different component projects, each of which can operate independently, can be exploited or put into use, or with different investment phases for implementation, such component projects shall be managed as independent projects. The division of component projects or investment phasing shall be stated in the investment decisions.
– Based on the specific conditions of projects, investment deciders shall decide on the implementation by taking turns, mixture or alternation of tasks at the stages of project implementation and construction completion to put works into exploitation and use.
Requirements on construction investment projects
A construction investment project, respective of its funding sources, must satisfy the following requirements:
– Being in line with the socio-economic development master plan, sectoral development master plan, construction master plan, land use master plan and plan in the locality where the construction investment project is located.
– Having appropriate technological and construction designing plans.
– Ensuring quality and safety in construction, operation, exploitation and use of its works, fire and explosion prevention and fighting and environmental protection and response to climate change.
– Ensuring the adequate allocation of funds strictly according to its schedule, ensuring its financial efficiency and socio-economic efficiency.
– Complying with other relevant provisions of law.
Formulation of construction investment projects
– Upon construction investment, project owners shall make construction investment feasibility study reports, except the cases prescribed in Clauses 3 and 4 of this Article. Contents of construction investment feasibility study reports must conform with the requirements of each type of project. The formulation of construction investment feasibility study reports must comply with the 2014 Vietnam Construction Law and relevant laws.
– For national important projects and group-A projects, before making construction investment feasibility study reports, project owners shall make construction investment pre-feasibility study reports. For other projects, investment deciders shall consider and decide whether or not construction investment pre-feasibility study reports shall be made.
– Only construction investment economic-technical reports shall be required for construction investment projects in the following cases:
+ Construction works used for religious purposes;
+ Small construction works and other works prescribed by the Government.
– For construction of separate houses, project owners are not required to formulate projects nor construction investment economic-technical reports.
Contents of construction investment pre-feasibility study reports
– The necessity and conditions for construction investment.
– The projected objective, scale, location and form of construction investment.
– Land and natural resource use demands.
– The preliminary design on construction, explanation, technology, techniques and appropriate equipment.
– Projected time for project implementation.
– The preliminary total investment amount, capital raising plan; recoverability of invested funds, capability to pay loans (if any); preliminary determination of socio-economic efficiency and evaluation of the project’s impacts.
Contents of construction investment feasibility study reports
– A basic design shall be made to achieve the project’s objectives, suit construction works of the project, ensure synchronism between works when they are put into exploitation and use.
A basic design must comprise explanations and drawings expressing the following contents:
+ The construction location, direction of the line of works, list, sizes, types and grades of works on the whole construction ground;
+ Selected technological, technical and equipment plans (if any);
+ Architectural solutions, ground plan, cross-sections and vertical sections of construction works and their sizes and main structures;
+ Construction solutions, major materials to be used, estimated construction cost of every work;
+ Plan on connection of technical infrastructures inside and outside the works, fire and explosion prevention and fighting solutions;
+ Applied standards and technical regulations and construction survey results for making the basic design.
– Other contents of a construction investment feasibility study report include:
+ The necessity for investment, investment policy, construction investment objectives, construction locations and to be-used land area, capacity and form of construction investment;
+ The capability to ensure factors for project implementation such as use of resources, selection of equipment and technology, use of labor, technical infrastructure, product consumption, exploitation and use requirements, implementation duration, plan on construction ground clearance and resettlement (if any), solutions to organizing management of project implementation, work operation and use, and environmental protection;
+ Assessment of the project’s impacts related to land recovery, ground clearance and resettlement; protection of landscape and ecological environment and safety in construction, fire and explosion prevention and fighting, and other necessary contents;
+ Total investment amount and capital raising, financial analysis, risks, expenses for exploitation and use of the work, evaluation of socio-economic efficiency of the project; recommendations on coordination mechanism, policies on incentives and support for project implementation;
+ Other relevant contents.
Contents of construction investment economic-technical reports
– Construction drawing designs, technical designs (if any) and construction cost estimates.
– Other contents of a construction investment economic-technical report include explanations about the necessity for investment, construction objectives, construction locations, to be-used land area, sizes, capacity and grades of works, construction solutions, construction safety, plans on construction ground clearance and environmental protection, allocation of funds for implementation, construction duration, construction investment efficiency of works.
Appraisal of construction investment projects
– Construction investment projects shall be appraised before investment decision.
– A dossier submitted for construction investment project appraisal must comprise:
+ Project owner’s report for project appraisal;
+ Construction investment feasibility study report or construction investment economic- technical report;
+ Relevant documents.
– The project appraisal contents must comply with Article 58 of 2014 Vietnam Construction Law.
Competence to appraise construction investment projects
– For national important projects, the State Appraisal Council set up by the Prime Minister shall appraise their construction investment pre-feasibility study reports and construction investment feasibility study reports.
– For projects using state budget funds, the specialized construction agencies shall assume the prime responsibility, as decentralized, for organizing the appraisal of the contents prescribed in Article 58 of 2014 Vietnam Construction Law.
– For projects using non-budget state funds, the competence to appraise these construction investment projects is prescribed as follows:
+ Specialized construction agencies shall assume the prime responsibility, as decentralized, for appraising their basic designs prescribed at Points a, b, d, dd, e and g, Clause 2, Article 58 of 2014 Vietnam Construction Law;
+ Specialized agencies attached to investment deciders shall assume the prime responsibility for appraising technological designs (if any) and other contents of construction investment feasibility study reports.
– For projects using other funds, the competence to appraise these construction investment projects is prescribed as follows:
+ Specialized construction agencies shall appraise, as decentralized, the basic designs of construction investment projects, for works of special grade and grade I, public works, works greatly affecting landscape, environment and community safety. Specialized agencies attached to investment deciders shall organize the appraisal of technological designs (if any) and other contents of construction investment feasibility study reports;
+ For projects using other funds not specified at Point a of this Clause, investment deciders shall organize by themselves the appraisal thereof;
+ For projects implemented in form of project contract or public-private partnership contract with state-contributed funds, the specialized construction agencies shall assume the prime responsibility, as decentralized, for appraising their basic designs. Competent state agencies as prescribed by the law on investment shall appraise other contents of their construction investment feasibility study reports.
– For construction investment projects only requiring construction investment economic- technical reports, the competence to appraise these construction investment projects is prescribed as follows:
+ If the projects use state budget funds, the specialized construction agencies shall assume the prime responsibility for organizing the appraisal of the contents of their construction investment economic-technical reports prescribed in Clause 4, Article 58 of 2014 Vietnam Construction Law;
+ If the projects use non-budget state funds, the specialized construction agencies shall, as decentralized, assume the prime responsibility for appraising their construction drawing designs and cost estimates. The specialized agencies attached to investment deciders shall appraise the technological designs (if any) and other contents of their construction investment economic-technical reports;
+ If the projects use other funds, investment deciders or project owners shall organize by themselves the appraisal of their construction drawing designs and cost estimates, except works of special grade or grade I and works greatly affecting the landscape, environment and community safety, and take responsibility for the appraised contents.
– Construction investment projects with requirements on fire and explosion prevention and fighting, environmental protection, and national defense or security maintenance shall be appraised by competent state agencies.
– Specialized construction agencies and investment deciders may invite organizations and individuals with qualifications and experiences to participate in project appraisal or request project owners to select organizations or individuals possessing full construction capacity and practice conditions already registered on the website on construction capacity as prescribed by 2014 Vietnam Construction Law to verify projects as a basis for the appraisal and approval of the projects. The project verification cost and basic design appraisal charge shall be accounted into the total investment amounts of projects.
– The agencies in charge of appraisal shall summarize the project appraisal results and submit them to persons competent to decide on investment for consideration and decision.
– Organizations and individuals participating in project appraisal or verification shall take responsibility before law for the results of their appraisal or verification. Project-formulating organizations and individuals may not participate in the appraisal or verification of the projects they have formulated.
Contents of appraisal of construction investment projects
– The appraisal of a construction investment project covers the appraisal of the basic design and other contents of the construction investment feasibility study report.
– The appraisal of a basic design must cover:
+ The conformity of the basic design with the construction detailed planning; the approved total ground or with the selected plan on the line of works, for works constructed in lines;
+ The conformity of the basic design with the construction location, the connectivity with technical infrastructure of the region;
+ The conformity of the selected technological plan and technological line, for works requiring technological designs;
+ The conformity of designing solutions to ensuring construction safety, environmental protection, fire and explosion prevention and fighting;
+ The compliance with standards and technical regulations in the design;
+ The construction capacity conditions of organizations or practice capacity conditions of individuals providing designing consultancy;
+ The conformity of solutions to organizing project implementation at each stage and for each work item with the requirements of the basic design.
– Other appraisal contents of a construction investment feasibility study report include:
+ Assessment of the necessity for construction investment, including conformity with the investment policy, possibility to meet the requirements on scale expansion, higher capacity and exploitation and use capability to meet the requirements of socio-economic development and national defense and security maintenance in each period;
+ Assessment of factors ensuring the project feasibility, including conformity with sectoral development master plan and construction master plan; the capability to meet land use and construction ground clearance demands; resource use demands (if any); assurance of input elements and outlets for the project’s products; implementation solutions; project owner’s managerial experience; solutions to environmental protections, fire and explosion prevention and fighting; national defense and security maintenance and other factors;
+ Assessment of factors ensuring the project efficiency, including total investment amount, project implementation schedule; exploitation and operation costs; capability to raise capital according to schedule, risk analysis, financial efficiency and socio-economic efficiency of the project.
– For projects only requiring construction investment economic-technical reports prescribed in Clause 3, Article 52 of 2014 Vietnam Construction Law, the appraisal contents include:
+ Assessment of the investment necessity and scale; the implementation time; total investment amount and socio-economic efficiency;
+ Consideration of feasibility-ensuring factors, including land use demand and ground clearance capability; factors affecting the work such as national defense, security and environment and other relevant laws;
+ The rationality of construction designing solutions for the work; the observance of applied standards, technical regulations, and regulations on the use of building materials for the work; the rationality of the selection of technological lines and equipment, for designs with technological requirements; compliance with regulations on environmental protection and fire and explosion prevention and fighting;
+ Assessment of the conformity of designing solutions for the work with its utility, its safety level and assurance of safety for adjacent works;
+ Assessment of the compatibility between the major volume in the cost estimate and the volume in the design; the properness and reasonability of the application of construction norms and unit prices; determination of the value of the cost estimate of the work;
+ Construction capacity conditions of organizations and individuals conducting construction surveys and designing and formulating construction investment economic- technical reports.
Time limit for appraisal of construction investment projects
The time limit for appraising a project shall be counted from the date the appraising agency or organization receives a complete and valid dossier, specifically as follows:
– The time limit for project appraisal is 90 days for national important projects.
– The time limit for project appraisal is 40 days for group-A projects.
– The time limit for project appraisal is 30 days for group-B projects.
– The time limit for project appraisal is 20 days for group-C projects and projects only requiring construction investment economic-technical reports.
– In case of necessity to extend the appraisal time limit, appraising agencies or organizations shall report thereon to their superior agencies for consideration and decision on the extension; the extended duration must not exceed the corresponding appraisal time limit prescribed in Clauses 1, 2, 3 and 4 of this Article.
Competence to decide on construction investment
– For projects using state budget funds, funds raised from national public bonds, government bonds or local administrations’ bonds, official development assistance, preferential loans of foreign donors, the State’s development investment credit capital, investment capital from sources of revenues left for investment but not yet accounted into the state budget balance, or other loans of local budget for investment, the competence to decide on construction investment must comply with the law on public investment.
– For projects using government-guaranteed credit capital, loans guaranteed with state property, development investment capital of state enterprises, capital from non-business operation development funds, land use rights value contributed by state agencies, organizations or enterprises as capital for construction investment, the competence to decide on construction investment is prescribed as follows:
+ The Prime Minister shall decide on investment in national important projects;
+ Law-prescribed competent representatives of agencies, organizations or enterprises shall decide on project investment.
– For projects using other funds, their owners or representatives shall decide on project construction investment within the ambit of their powers prescribed by law.
Adjustment of construction investment projects
– Cases of adjusting construction investment projects using state funds include:
+ Being affected by natural disasters, environmental incidents, enemy sabotage, fires or other force majeure factors;
+ Appearance of factors likely to bring about higher efficiency for the project when the project owner has proved the financial and socio-economic efficiency brought about by the project adjustment;
+ Change of construction planning which directly affects the project;
+ When the construction price index promulgated by the Ministry of Construction or the provincial-level People’s Committee during the project implementation is higher than the construction price index used for calculation of inflation in the approved total investment amount of the project.
– The adjustment of projects using state funds shall be decided by investment deciders.
– The adjustment of projects using other funds shall be decided by investment deciders on the basis of ensuring the requirements on planning, safety, environmental protection, fire and explosion prevention and fighting, and national defense and security, which have been approved by competent state agencies.
– If the project adjustment alters the construction objectives, scales and locations, it shall be approved by a competent state agency.
– The adjustment of construction investment projects shall be appraised and approved.
– The Government shall detail the formulation, appraisal, approval and adjustment of construction investment projects.
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Frequently asked questions
Construction investment projects shall be classified by size, characteristic and type of construction work and funding source.
A construction investment project may comprise a single work or multiple works of different types and grades.
The order of construction investment involves three stages, including project preparation, project implementation and construction completion to put the project’s work into exploitation and use, except the construction of separate houses.
Conclusion: So the above is Regulations on construction investment projects in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
