Circular No. 04/2006/TT-BXD guiding the Implementation of the Regulations on New Urban Areas issued pursuant to Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government.

CIRCULAR

Guidelines for implementing the Urban Development Zone Regulation issued pursuant to Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government.

pursuant to Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government

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Pursuant to Decree No. 36/2003/NĐ-CP dated April 4, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Construction;

based on Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government regarding the issuance of the Regulations on New Urban Areas;

The Ministry of Construction hereby issues guidelines for implementing certain provisions of the Urban Development Zone Regulation issued pursuant to Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government (hereinafter referred to as Decree 02/CP) as follows:

I. Certain provisions regarding the procedures for formation and development of new urban zones (hereinafter abbreviated as KDTM) stipulated in Article 6 of Decree 02/CP:

1. Regarding detailed urban construction planning as provided in Point a Clause 1 Article 6:

a) Based on the general urban construction plan that has been approved by the competent authority, the Department of Construction or the Department of Planning and Architecture (for provinces and cities with a Department of Planning and Architecture) shall be responsible for organizing the preparation and examination of the detailed urban construction plan at a scale of 1/2000 for the area with the KDTM project to submit to the Provincial People's Committee for approval.

b) The detailed urban construction plan at a scale of 1/2000 that has been approved serves as the basis for the formation and development of the KDTM project.

2. Regarding the preparation of detailed construction plans at a scale of 1/500 and the preparation of the KDTM project as provided in Point b Clause 1 Article 6:

a) Based on the detailed urban construction plan at a scale of 1/2000 that has been approved, the investor of the KDTM project (selected through bidding or direct assignment) shall be responsible for preparing the detailed construction plan at a scale of 1/500 to submit to the competent authority according to the classification and delegation of the Provincial People's Committee for approval.

b) Depending on the scale of the project and the capacity of the local construction management agency, the Provincial People's Committee may delegate the approval of the detailed construction plan at a scale of 1/500 of the KDTM project to the District People's Committee.

In cases where adjustments are proposed during the preparation of the detailed construction plan at a scale of 1/500 by the investor to improve the project's effectiveness without affecting the landscape or environment, the investor and the examining authority may negotiate before submitting to the competent authority for approval.

c) Based on the detailed construction plan at a scale of 1/500 that has been approved, the investor of the KDTM project shall be responsible for preparing the KDTM project in accordance with Section III of this Circular to submit to the Provincial People's Committee for examination and permission to invest or to submit for examination and permission to invest by the Prime Minister according to the delegation specified in Article 15 of Decree 02/CP.

In cases where adjustments are proposed during the preparation of the KDTM project by the investor to improve the project's effectiveness without affecting the architecture, landscape, environment, or connection with technical infrastructure works, the investor and the examining authority may negotiate before submitting to the competent authority for permission to invest.

3. Regarding Sub-project Level 2 as provided in Clause 2 Article 6:

a) The investor of the KDTM project may invite investors at Sub-project Level 2 to invest in the KDTM project after completing the technical infrastructure works to a level sufficient to serve the implementation and operation of Sub-project Level 2 projects.

The investor of the KDTM project has the right to prioritize Sub-project Level 2 investors (including public projects invested by the State) who can start and implement their projects quickly to achieve the goal of rapidly covering the land area of the KDTM project.

b) After the KDTM project has been approved, Sub-project Level 2 projects (including those invested by the main investor and public works invested by the State) of Group A scale can be invested in the KDTM project if they comply with the detailed construction plan at a scale of 1/500 that has been approved. These investors do not need to go through investment permission procedures but only need to submit the basic design to the competent state authority according to current laws on construction for examination before approving the project. to organize examination before approving the project.

II. On the investor of the KDTM project as provided in Article 11 of Decree 02/CP:

1. On the capital investment owned by the investor participating in the KDTM project as provided in Point b Clause 1 Article 11:

a) Capital investment owned by the investor is the actual capital of the investor up to the latest year, determined through the financial report of the enterprise attached with tax settlement or audit report. For newly established enterprises, there must be confirmation from the bank regarding the financial capability of the enterprise.

b) The total investment amount of the KDTM project is established according to current regulations, including: Land use fees or land rental fees; compensation costs for land clearance and resettlement (if applicable); costs for constructing technical infrastructure within the perimeter (including: traffic system; water supply and drainage systems; electricity supply for living and public lighting, excluding works passing through the KDTM project invested by the State).

2. On the method of selecting the investor of the KDTM project as provided in Clause 2 Article 11:

2.1. In the case of tendering to select the investor of the KDTM project:

2.1.1. Conditions for organizing the tender:

Tendering to select the investor to implement the KDTM project can only be conducted when the detailed urban construction plan at a scale of 1/2000 has been approved and meets the following conditions:

a) The land area of the project has been identified in the approved construction plan.

b) The tenderer has been designated and the tender documents have been approved by the Provincial People's Committee.

c) The floor price of land use fees has been approved by the Provincial People's Committee, in cases where the project area has already been compensated and cleared.

d) There is a compensation, clearance, and resettlement plan approved by the Provincial People's Committee, in cases where the project area has not yet been compensated and cleared.

2.1.2. The tenderer:

a) The Chairman of the Provincial People's Committee assigns the Department of Construction or the City Administration under the province (in cases where a Management Board for Developing KDTM has not been established) to act as the tenderer to organize the tender to select the investor of the KDTM project.

b) The tenderer shall submit to the People's Committee of the province for a decision to establish the Expert Group to assist with the work. The Expert Group shall consist of representatives from the Construction Departments, Natural Resources and Environment Departments, Planning and Investment Departments, Finance Departments, Urban Planning and Architecture Departments (for cities with Urban Planning and Architecture Departments), and other relevant agencies related to the project.

2.1.3. Tendering procedures:

The organization of the tender to select the project investor shall be carried out in accordance with the following sequence:

a) Prepare the tender plan.

b) Prepare the tender documentation.

c) Organize the tender.

d) Evaluate the tender submissions.

đ) Review and approve the tender results.

2.1.4. Timeframes for organizing the tender:

a) The minimum time for announcing the tender invitation is 10 working days before issuing the tender documentation.

b) The minimum preparation time for the tender submission is 45 working days from the date of issuance of the tender documentation.

c) The validity period of the tender submission is specified in the tender documentation but shall not exceed 180 working days from the closing date stated in the tender documentation. In case of necessity, the tenderer may request an extension of the validity period of the tender submission, but it shall not exceed 30 working days and must be approved by the People's Committee of the province.

d) The maximum evaluation time for the tender submissions is 45 working days from the closing date until the tenderer reports the tender results to the People's Committee of the province for approval.

2.1.5. Tender plan:

The tenderer shall prepare the tender plan and submit it to the People's Committee of the province for approval. The tender plan includes: Content, time frame, and form of the tender.

2.1.6. Tender documentation:

Based on the approved tender plan, the tenderer shall prepare the tender documentation and submit it to the People's Committee of the province for approval. The tender documentation consists of two parts:

a) Part containing necessary information and guidance for investors:

- Location of the project.

- Scale, boundaries, and land area of the project.

- Project site characteristics: Topography, geology, current status of the land.

- Detailed construction planning at a scale of 1/2000 for the land with the project.

- Information about investment in infrastructure construction within and outside the project boundary.

- If the project land has been cleared, information about the initial land use value including: Land use fee according to the provincial People's Committee price framework, compensation for land clearance, technical infrastructure construction costs (if applicable) must be provided.

- Other necessary guidelines such as quantity, format of tender submissions, validity period of tender submissions, requirements for tender guarantees.

- Precedent conditions for rejecting tender submissions: Tender submissions not submitted within the deadline stipulated in the tender documentation; tender guarantee; legality and validity of tender submissions; financial capacity; bid price (in cases where the project land has been cleared) and other precedent conditions.

- Criteria for evaluating tender submissions.

b) Part containing requirements for investors to declare proposals on:

- Financial capacity, capital mobilization plans.

- Project management system, experience in implementing projects.

- Project schedule.

- Management plans for the project during implementation and after completion.

- Requirements for constructing technical infrastructure, social infrastructure, housing, including housing for policy beneficiaries and low-income individuals.

- Obligations and contributions of investors to the State.

- Bid price for land use value in cases where the project land has been cleared or technical infrastructure has been constructed (if applicable).

- Compensation and resettlement support plans in cases where the project land has not been cleared.

- Preliminary proposals on detailed construction planning at a scale of 1/500 to enhance investment efficiency for both the State and the investor.

- Other proposals from investors (if any).

2.1.7. Tender invitation letter or announcement:

After the tender documentation has been approved, the tenderer shall widely announce the tender through mass media (in the case of open tendering) or directly send tender invitation letters to investors (in the case of restricted tendering). The content of the tender invitation follows the model in Appendix 1 of this Circular.

2.1.8. Tender submission:

The tender submission includes the bidding application form according to the model in Appendix 2 of this Circular, relevant legal documents, investors' proposals as required by the tender documentation, and other proposals from investors.

2.1.9. Tender guarantee:

Depending on the scale and characteristics of each residential development project, the People's Committee of the province shall determine the tender guarantee amount appropriately, but not exceeding 3% of the land use value for the project area.

The tender guarantee follows the model in Appendix 3 of this Circular.

2.1.10. Evaluation of tender submissions:

The evaluation of tender submissions is based on the criteria and conditions set forth in the tender documentation and is determined using a scoring system (including criteria on bid price for land use value in cases where the project land has been cleared). Depending on the scale and nature of the project, the People's Committee of the province shall specify the scoring range for each criterion as follows:

a) In cases where the project land has not been cleared:

- Assessment of the investor's project management capability and experience.

- Assessment of the contents declared according to the requirements of the tender documentation and the investor's proposals.

- Assessment of the investor's proposals on detailed construction planning at a scale of 1/500 and other proposals that benefit the project and contribute to the State.

b) In cases where the project land has been cleared:

- Assessment of the contents as mentioned in point a of this section.

- Assessment of the bid price for land use value, land clearance compensation, and investment costs for technical infrastructure construction (if applicable).

c) The investor with the highest score will be invited for negotiation.

d) In case negotiations do not reach an agreement, the tenderer will invite the next highest-ranked investor for negotiations until a successful bidder is selected.

2.1.11. Review and approve the tender results:

a) The expert team prepares a report on the tender results to be reviewed by the tenderer and submitted to the Provincial People's Committee for examination and approval.

b) After approving the tender results, the tenderer publicly announces the tender results and is responsible for addressing any complaints (if any).

2.2. In the case of appointing the project investor for the KDTM project:

2.2.1. Conditions for applying the appointment method:

The application of the appointment method for the project investor of the KDTM project is decided by the Provincial People's Committee in cases where the KDTM project needs to be implemented quickly to meet local housing development requirements.

2.2.2. Implementation procedure:

a) The tenderer directly invites investors who have the necessary capacity and experience suitable for the project requirements.

b) The tenderer provides the investor with its request dossier for the investor to base their proposal dossier on.

c) The investor submits the proposal dossier within the time limit specified in the request dossier for the tenderer to review and submit to the Provincial People's Committee for recognition of the project investor.

2.2.3. Tenderer:

The tenderer and the expert team are determined according to the provisions at point 2.1.2, section II of this Circular.

2.2.4. Content of the tenderer's request dossier:

Consists of two parts:

a) Part containing information and guidance on the KDTM project:

- Detailed planning dossier at a scale of 1/2000 for the area with the project.

- Information about the current land status, including documents on natural conditions and other relevant conditions related to the project.

b) Part containing requirements for investors to declare proposals on:

- Detailed construction planning scheme at a scale of 1/500.

- Land compensation and resettlement support plan (if applicable).

- Project schedule.

- Requirements for constructing technical infrastructure, social infrastructure, housing, including housing for policy beneficiaries and low-income individuals.

- Obligations and contributions of investors to the State.

- Requirements regarding financial capability and capital mobilization to implement the project.

- Management plans for the project during implementation and after completion.

- Other requirements for the investor (if applicable).

2.2.5. Investor's proposal dossier:

The proposal dossier is prepared by the investor, including the bid submission form, relevant legal documents, detailed construction planning proposal at a scale of 1/500, and other proposals according to the content of the tenderer's request dossier.

2.2.6. Review of the proposal dossier and approval of the investor:

a) The expert team is responsible for reviewing and evaluating the investor's proposal dossier based on the following contents:

- Reviewing the detailed construction planning proposal at a scale of 1/500 proposed by the investor compared to the approved detailed planning at a scale of 1/2000 concerning location, boundaries, scale of functional zones; density, land use coefficient, construction level; red line; building boundary; technical requirements; connection of infrastructure systems inside and outside the project perimeter; harmony in landscape and architecture with the surrounding area.

- Reviewing the rationality of the proposal dossier in relation to the tenderer's requirements.

b) The expert team compiles the results of the proposal dossier review, clarifying the compatible contents and those requiring negotiation.

c) If the detailed construction planning proposal at a scale of 1/500 prepared by the investor proposes adjustments to the detailed planning at a scale of 1/2000 to enhance the project's effectiveness, the expert team must record these for negotiation without imposing conditions that would harm the investor.

d) The tenderer invites the investor to negotiate. The negotiation content must be recorded in a minutes document, clearly stating the agreed contents including the agreed items and the items the investor must amend related to planning and the investor's proposals submitted for the Provincial People's Committee's approval and recognition of the KDTM project investor.

If negotiations fail to reach an agreement, the tenderer reports to the Provincial People's Committee for consideration and decision on appointing another investor.

III. Regarding the establishment of the KDTM investment project as stipulated in Clause 2, Article 13 of Decree 02/CP:

The content of the KDTM project includes the explanatory part and the basic design:

1. Explanatory part:

a) The necessity of investment and the legal basis for the project.

b) Project investor, investment form, project management form.

c) Area, boundaries, land clearance and resettlement plans.

d) Land allocation, transfer, lease methods.

đ) Project scale.

e) Economic-technical justification, determination of economic-social benefits.

g) Investment and business phases; determination of funding sources, progress, and implementation measures for each phase.

h) Organization plan for services and urban services provided under the KDTM project during the investment and business periods.

i) Preliminary total investment estimate of the project.

k) Requirements for the State regarding the construction of external infrastructure works and State infrastructure works passing through the project, investment in social infrastructure works and administrative office buildings.

l) Infrastructure works and social infrastructure works transferred without compensation.

m) Determination of tasks, responsibilities, and relationships between the KDTM project investor and related subjects.

n) Proposals for support and incentives for the project.

o) Proposals for administrative management, new administrative units, and administrative management transfer plans for local authorities.

2. Basic design part:

a) The basic design is prepared for the system of infrastructure works of the project.

b) The approved detailed construction planning at a scale of 1/500 serves as the basis for preparing the basic design of the project.

IV. Regarding the project dossier for KDTM projects submitted for investment permission as stipulated in Article 14 of Decree 02/CP:

The project dossier includes:

a) Application for investment permission according to the model at Appendix No. 4 of this Circular.

b) Decision approving the selection result of the KDTM project investor by the Provincial People's Committee.

c) Approved detailed construction planning at a scale of 1/500.

d) The KDTM investment project in accordance with the guidelines in Section III of this Circular.

V. Regarding the project review and decision to grant investment permission as stipulated in Article 15 of Decree 02/CP:

1. The Provincial People's Committee shall entrust the Department of Construction (in cases where a Management Board for Development of Urban Industrial Zones is not established) to be the lead agency responsible for reviewing projects, with the duty to seek written opinions from the Urban Administration where the project is located and related agencies, compile reports, and submit them to the Provincial People's Committee for submission to the Prime Minister for consideration and approval of investment for urban industrial zone projects with land use areas of 200 hectares or more, or for the Provincial People's Committee to consider and decide on investment approval for remaining urban industrial zone projects including residential area projects not included in urban industrial zone projects.

a) The content of the project review must comply with the requirements stipulated in Clause 1, Article 13 of Decree 02/CP and commitments agreed upon during the negotiation process for selecting the investor.

b) Review of basic design:

The content of the review and the report on the results of the basic design review shall be carried out in accordance with current laws on construction.

- For urban industrial zone projects approved for investment by the Provincial People's Committee, the basic design of the project shall be reviewed by the Department of Construction.

- For urban industrial zone projects approved for investment by the Prime Minister, the basic design of the project shall be reviewed by the Ministry of Construction.

2. The Department of Construction shall prepare a report on the results of the urban industrial zone project review to be submitted to the Provincial People's Committee for consideration and approval of investment or for submission to the Prime Minister for consideration and approval of investment.

The report on the results of the project review shall include the following contents:

a) A summary of the main contents of the project as prescribed in Clause 3, Article 15 of Decree 02/CP.

b) Contents implemented according to commitments stated in the minutes when negotiating the selection of the investor.

c) Compilation of opinions from participating agencies and evaluations, comments, and recommendations.

d) Report on the results of the basic design review and opinions of relevant agencies.

VI. On construction quality management as provided in Article 5 of Decree 02/CP:

1. Regarding responsibilities for construction quality as provided in Clause 1, Article 5:

a) Investors are responsible for organizing systems to manage construction quality in accordance with construction laws for projects they invest in within urban industrial zones.

b) Depending on the content of the contract between the urban industrial zone project investor (primary investor) and the secondary investor, the urban industrial zone project investor is responsible for inspecting the construction quality management work of projects invested in by the secondary investor.

2. Regarding participation in construction quality management and final acceptance of works as provided in Clause 3, Article 5:

Infrastructure technical works, social infrastructure works, and other works identified in the Investment Permission Decision that are transferred to local professional organizations for management and operation shall be inspected by the recipient throughout the construction process, and participate in the final acceptance of the works to be transferred.

VII. On warranty and maintenance of works as provided in Article 5 and Article 19 of Decree 02/CP:

1. On warranty of works as provided in Clause 4, Article 5 and Clause 1, Article 19:

a) The contractor is responsible for warranting the works it has constructed in accordance with the agreed period with the urban industrial zone project investor or secondary investor through contracts and in accordance with construction laws.

b) The urban industrial zone project investor is responsible for warranting the works to the recipient according to the agreed period between both parties through the transfer agreement, but not less than twelve months from the date of transfer.

c) Investors are responsible for warranting residential buildings and houses they have invested in constructing within urban industrial zones to the buyer of apartments or houses according to the agreed period between both parties through purchase contracts, but not less than twelve months from the date of sale.

Other provisions on warranty of works such as warranty responsibility, warranty amount, etc., shall be implemented in accordance with construction laws and other relevant laws.

2. On maintenance of works as provided in Clause 3, Article 5:

a) The urban industrial zone management board established by the urban industrial zone project investor is responsible for organizing the maintenance of works under its management and use in accordance with current regulations on maintenance, and for residential buildings, maintenance must also comply with housing laws.

b) The person managing and using the transferred works is responsible for maintaining the works in accordance with construction laws.

VIII. On mobilizing capital for building housing as provided in Clause 2, Article 23 of Decree 02/CP:

1. Mobilizing capital for investing in housing construction within urban industrial zone projects shall be carried out multiple times through contracts between the seller and buyer, with the first mobilization only allowed when the investor has cleared the site and started implementing the initial phase of technical infrastructure construction as determined in the Investment Permission Decision. Subsequent mobilizations shall be conducted in line with the construction progress, but the total amount mobilized shall not exceed seventy percent of the contract value.

2. The investor must use the mobilized funds from buyers for their intended purpose. Rights and obligations of the seller and buyer must be clearly stated in writing through contracts.

IX. Transitional Provisions:

1. Investors who were assigned by the Provincial People's Committee to prepare detailed construction plans for urban industrial zone projects or to carry out land clearance before Decree 02/CP took effect shall continue to be entrusted by the Provincial People's Committee to act as investors for urban industrial zone projects without having to organize bidding to select investors as stipulated in Decree 02/CP. The urban industrial zone project investor is responsible for organizing the preparation of the project to apply for investment permission in accordance with Decree 02/CP and this Circular.

2. For ongoing projects, if the urban industrial zone project investor deems it necessary to adjust some previous regulations to align with those in Decree 02/CP, they may propose to the Provincial People's Committee where the project is located for consideration and approval.

This Circular shall take effect fifteen days after its publication in the Official Gazette. Any difficulties encountered during implementation should be reported to the Ministry of Construction for consideration and resolution./.

    THE MINISTER

         (Signed)


Nguyen Hong Quan