Circular No. 01/2000/TT-BKH on guiding investment appraisal

CIRCULAR

Issued by the Ministry of Planning and Investment Decision No. 01/2000/TT-BKH

dated January 10, 2000 on guiding investment appraisal

___________________________________

Investment appraisal is a new task, many specific contents need to be piloted and supplemented to clarify during the implementation process.

Implementing Clause 7 - Article 20 of the Management Regulation for Investment and Construction issued together with Government Decree No. 52/1999/NĐ-CP dated July 8, 1999 (hereinafter referred to as the Management Regulation for Investment and Construction), after reaching consensus with the Ministry of Finance and the Ministry of Construction, the Ministry of Planning and Investment initially guides the implementation of investment appraisal as follows:

1. The purpose, tasks, and requirements of the investment appraisal work:

Investment appraisal is the examination, supervision, analysis, and evaluation of each stage or the entire process of investment and construction to ensure that investments align with planning, economic and social development goals, reasonable investment structures of industries, regions, localities, and the country as a whole, comply with state laws, minimize risks, and enhance investment efficiency.

a/ The purpose of investment appraisal is:

- To help state management agencies on investment understand the situation and developments of investment activities to timely adopt appropriate policies and measures in each period, ensuring that investment continues to develop and become more effective.

- To ensure that investment preparation and implementation comply with legal regulations and the balanced development requirements of the national economy.

b/ The tasks of investment appraisal are:

- Monitoring and inspecting investment preparation and decision-making according to current regulations, consistent with state planning and development strategies.

- Monitoring and inspecting the implementation of investment programs and projects according to investment decisions.

- Analyzing and evaluating the implementation of investment programs and projects in each period and phase; recommending authorities at all levels to adjust, supplement, modify, or revoke approved investment decisions to suit actual conditions, ensuring investment effectiveness.

- Initially piloting macro-level investment appraisal nationwide; summarizing, analyzing, and evaluating the investment activities of certain industries and localities according to assigned topics in each period to report and propose guidelines, policies, and measures to achieve investment targets, structures, and promote effective investment.

c/ The requirements of the investment appraisal work are:

- Ensuring compliance with provisions in the Management Regulation for Investment and Construction.

- Ensuring the initiative of the investment appraisal work.

- Not directly intervening in the specific business operations of the Investor.

Detecting and promptly reflecting the situation of implementing investment decisions.

- Ensuring accuracy, honesty, and objectivity.

- Ensuring timeliness and substantiation of recommendations.

- Closely coordinating between relevant sectors and agencies in the investment appraisal work.

2. The objects of investment appraisal:

The objects of investment appraisal are investment activities within plans including investment programs and projects under the plans of state-owned enterprises, agencies, and organizations using state budget investment funds, state-guaranteed credit investment funds, state development credit investment funds, and self-investment development funds of state-owned enterprises.

3. Contents of investment appraisal:

The contents of investment appraisal are stipulated in Clause 3, Article 20 of the Management Regulation for Investment and Construction. The Ministry of Planning and Investment provides additional guidance as follows:

3.1. Appraising the preparation and issuance of investment decisions through monitoring, inspection, analysis, and evaluation of:

- Legal conditions, compliance with current laws; current procedures before approval.

- Compliance with planning and development plans for industries and territories; overall balances ensuring the feasibility of the project.

The content of investment decisions as prescribed in Article 30 of the Management Regulation for Investment and Construction.

These appraisal contents are based on the provisions regarding the establishment, estimation, and issuance of investment decisions in the Management Regulation for Investment and Construction and other current state regulations.

3.2. Appraising the allocation and disbursement of plans for investment projects through the following tasks:

- Monitoring and inspecting the allocation of investment plans, providing comments and recommendations to ensure that investment projects align with approved schedules and total investment amounts, meet the content and objectives set out; sectoral and local investment plans are consistent with the investment structure approved by the state. Through this, unreasonable structures in plans or their implementation are identified.

- Monitoring and inspecting the disbursement situation, providing comments and recommendations to help management levels adopt appropriate solutions to use funds in accordance with regulations, ensuring the implementation of investment plans.

3.3. Appraising the organization and implementation of investment projects through the following tasks:

- Monitoring and inspecting the preparation and conduct of bidding; identifying and recommending measures to address issues arising that delay the bidding process or exceed the limits specified in the investment decision.

- Inspecting the approval of technical design and general project estimates in line with the investment decision.

- Identifying issues arising during the implementation of investment that differ from the investment decision.

- Analyzing reports, statistical data, inspection results, and information collected from various sources to identify any violations or unreasonable occurrences during implementation or external factors affecting the investment project, and recommending appropriate measures such as: supplementing resources to accelerate investment progress, suspending or delaying implementation, revoking the investment decision, or handling violations.

- Evaluating the investment project when signs indicate it will not meet its intended goals and recommending solutions.

3.4. Evaluating the results and effectiveness of the investment project compared to the content stated in the investment decisions upon completion of the investment process including:

- Evaluating the final capital expenditure to create fixed assets, project settlement.

- Evaluate the project at the time it is expected to reach its designed capacity and at the time it is expected to recover the investment capital and repay debt;

- Determine the effectiveness and draw lessons learned.

3.5. Specialized appraisal:

Based on the results of appraising investment projects, industries and localities analyze and evaluate their own investment structure according to the assigned topics, proposing solutions to ensure a reasonable investment structure.

4. Implementation:

The investment appraisal work is carried out at the national government level, industry level, and local level.

4.1. Management of investment appraisal work:

- Ministries managing specific sectors manage the appraisal of investment activities within their respective sectors nationwide, including the comprehensive appraisal of investment activities directly managed by the Ministry and those managed directly by other Ministries and localities.

- People's Committees of provinces and centrally governed cities manage the appraisal of investment activities in their respective localities, including those directly managed by the locality and those invested in by the central government within the locality.

- The Ministry of Planning and Investment is the permanent agency assisting the Prime Minister in consolidating the investment appraisal work of industries and localities nationwide, appraising group A projects, and guiding the business operations related to investment appraisal work.

4.2. Organization of investment appraisal work:

- The Ministry of Planning and Investment acts as the focal point with the participation of the Ministry of Finance, the Ministry of Construction, the State Bank of Vietnam, the sectoral management ministry, and other relevant agencies related to the project (in certain cases as required by the Ministry of Planning and Investment) to assist the Prime Minister in organizing the appraisal of group A investment projects.

- The Minister of the sectoral management ministry decides on the organization of the appraisal of group B and C investment projects and uses the organizational apparatus designated by the Ministry to carry out the investment appraisal work.

- The Chairman of the People's Committee of provinces and centrally governed cities decides on the organization of the appraisal of group B and C investment projects. The Department of Planning and Investment acts as the focal point with the participation of the Departments of Finance, Construction, Banking, and other relevant sectors of the locality to conduct the investment appraisal work locally.

4.3. The appraisal of investment projects is conducted through reviewing investment decisions, approval decisions, and related documents concerning the implementation process of the investment project; analyzing and evaluating reports submitted by the investor and sending them to the responsible agency for investment appraisal as prescribed.

Appraisal according to specialized topics is carried out based on the requirements and contents of the plan assigned by the competent authority.

a/ For group A investment projects:

The investor is responsible for submitting to the Ministry of Planning and Investment, and simultaneously to the agencies participating in the investment appraisal (Ministry of Finance, Ministry of Construction, specialized ministry, State Bank of Vietnam) decisions, related documents concerning preparation and implementation of investment, and reports prepared by the investor as prescribed.

Based on their functions and tasks, the participating agencies monitor, analyze, evaluate, and make recommendations to report to the Prime Minister and send to the Ministry of Planning and Investment.

The Ministry of Planning and Investment compiles opinions from relevant agencies to report to the Prime Minister on the results of the appraisal.

In some cases where deemed necessary, the Ministry of Planning and Investment may request the investor to submit these documents to other agencies for participation in the investment appraisal.

b/ For group B and C projects:

The project dossier and related documents concerning the preparation and implementation of investment, and reports as prescribed are submitted by the investor to the organization conducting the investment appraisal (for Ministries) and the Department of Planning and Investment along with other departments specified in Article 4.2 above (for localities) for monitoring, analysis, evaluation, and preparation of the investment appraisal report to be reviewed by the decision-making body.

c/ Appraisal by sectoral management ministries and localities:

- The Minister of the sectoral management ministry conducts the comprehensive appraisal of the entire sector nationwide, including:

+ The part directly managed by the Ministry;

+ The part directly managed by other Ministries and localities.

Other Ministries and localities submit documents and appraisal reports of investment projects to the sectoral management ministry as requested and according to the content of the project appraisal.

Based on the results of appraising investment projects directly managed by the Ministry, and the appraisal reports of related Ministries and localities, the sectoral management ministry compiles, analyzes, and evaluates the overall investment activities within the sector nationwide from a macro perspective (mainly the investment structure by sector) and the implementation status of projects, preparing an appraisal report to be submitted to the Prime Minister and sent to the Ministry of Planning and Investment.

- Localities conduct the appraisal of investment activities within their managed areas, including:

+ The part directly managed by the locality;

+ The part invested by the central government within the locality.

Central agencies with investment projects in the locality submit documents and appraisal reports of investment projects as requested and according to the content of the project appraisal to the People's Committee of the locality.

Based on the results of appraising investment projects directly managed by the locality and the appraisal reports of investment projects from central agencies, the People's Committee of the locality analyzes and evaluates the overall investment activities within the locality, preparing an investment appraisal report to be submitted to the Prime Minister and sent to the Ministry of Planning and Investment.

d/ Investment appraisal report:

- Periodic reports include:

+ Reports from the investor to the agency or organization conducting the investment appraisal;

+ Reports from the agency or organization conducting the investment appraisal to the investment decision-making body;

+ Reports from sectoral management ministries and People's Committees of provinces and centrally governed cities to the Prime Minister (simultaneously sent to the Ministry of Planning and Investment for consolidation).

- The deadlines for submitting reports are as follows:

+ Monthly reports are submitted by the 25th of each month;

+ Quarterly reports are submitted before the 25th of the last month of the quarter;

+ Semi-annual reports are submitted before the 25th of the last month of the second quarter;

+ Annual reports are submitted before December 25.

- In certain necessary cases, upon request from investment decision-making authorities, investment appraisal organizations may require the Investor to submit ad hoc reports.

The contents of the reports include a tabular section (in accordance with the attached model) and a narrative section.

Investment appraisal reports must comply with the contents specified in Point 3 of this Circular, clearly analyzing specific causes, individual and collective responsibilities, and recommending solutions.

Based on the recommendations of the organization conducting the investment appraisal, the authorized investment decision-maker may decide to re-appraise the investment project.

e/ Specialized appraisals for macro-management tasks:

Based on the tasks assigned by the Prime Minister, ministries and localities shall organize appraisals to review and adjust the structure, investment plans, or investment policies and mechanisms as required.

4.4. Responsibilities and Authorities of Authorities in Investment Appraisal:

a/ Investor:

- Submit documents and reports on the implementation status of the investment project according to the requirements of the appraisal organization within the stipulated time frame, accurately, truthfully, comprehensively, and be fully responsible for their reports.

- Supplement and clarify issues related to the content of the investment appraisal as requested by the responsible appraisal authority.

If the Investor fails to submit the report as prescribed, the appraisal organization has the right to report to the investment decision-making authority for handling. Any issues arising from non-submission of the report by the Investor shall be entirely the responsibility of the Investor before the authorized investment decision-maker and the direct management authority.

b/ Organizations conducting investment appraisals:

- Require the Investor to submit all decisions related to the investment program or project, regular and ad hoc reports, provide all necessary information, supplement and clarify necessary contents for the appraisal work;

- Monitor, analyze, evaluate, and recommend necessary measures to ensure the effectiveness of the investment project;

- Prepare and be responsible for the content and quality of the report submitted to the investment decision-making authority within the stipulated timeframe.

c/ Ministries managing sectors and localities:

- Direct organizations conducting investment appraisals to carry out appraisals in accordance with regulations.

- Require organizations conducting investment appraisals to clarify necessary issues in the appraisal report;

- Request other sectors and localities to report on investment activities within their jurisdiction;

- Summarize, analyze, and evaluate sectoral and local investment activities, propose policies, guidelines, and measures to ensure investment structure and effectiveness, and bear full responsibility for the results of the appraisal at the sectoral and local levels.

Report the results of the investment appraisal to the Prime Minister and send them to the Ministry of Planning and Investment for consolidation and submission to the Prime Minister;

- Recommend or decide to revoke, suspend, or adjust investment decisions after re-appraising projects within their delegated authority.

d/ Ministry of Planning and Investment:

- Coordinate with the Ministry of Finance, Ministry of Construction, sectoral ministries, State Bank, and relevant agencies to organize appraisals for Group A projects;

- Require Group A project Investors to submit all decisions related to the project, regular and ad hoc reports, and explanations of necessary issues related to the appraisal;

- Require sectoral ministries and localities to submit regular and ad hoc reports on appraisals within the stipulated timeframe.

- Consolidate appraisal work from sectors and localities, report to the Prime Minister.

Investment appraisal is necessary but is a new issue in our country, lacking experience and specialized organizations. Therefore, in the short term, we will conduct while summarizing experiences to timely supplement and adjust.

Ministries and sectors need to study and propose specialized topics for appraisal in each period to be decided by the Prime Minister.

Investment appraisal work shall be carried out in accordance with the provisions of Clause 2 above for all programs and projects with investment decisions from January 1, 2000.

For projects with investment decisions made before January 1, 2000, the appraisal shall be conducted based on the requirements of the decision-maker. Specialized appraisals shall be decided by the Prime Minister.

This Circular takes effect fifteen days from the date of issuance.