Directive No. 05/1998/CT-TTg On Strengthening Management and Investment in Construction

 DIRECTIVE

ON STRENGTHENING THE MANAGEMENT OF INVESTMENT AND CONSTRUCTION WORKS

According to reports from ministries, sectors, provincial people's committees under the central government, and the working delegation of the Government on the field of investment and construction, it can be seen that during the recent period, investment and construction activities have been given due attention and directed for implementation in accordance with the five-year socio-economic development plan for 1996-2000. Many investment projects have been completed and gradually put into operation, contributing to the restructuring of the economic structure, improving material and spiritual living standards of the people. The management of projects in accordance with the Investment and Construction Management Regulations and the Bidding Rules has made progress, contributing to enhancing the effectiveness of investments, saving costs, ensuring quality and construction schedule.

However, the implementation of investment targets of some projects in electricity, transportation, and water resources has not met the schedule (some works were delayed by six months to over one year). The scattered investment, investment following "fashion trends," and excessive construction of office buildings still prevail. The mobilization of resources for investment and development remains limited, still relying heavily on state budget capital. The planning work of some localities is not in line with the economic restructuring process. Full exploitation of social resources for investment and development and expansion of new forms of investment has not been fully realized. Administrative procedures remain cumbersome, significantly affecting disbursement work, etc.

To implement the Resolution of the Fourth Plenary Session of the Central Committee of the Party (Third Term) on continuing to promote the renewal process, tapping internal strength, enhancing the effectiveness of international cooperation, thriftiness for industrialization and modernization, striving to achieve socio-economic goals by the year 2000, and the Resolution of the Second Session of the National Assembly of the Tenth Term, the Prime Minister issues the following urgent tasks to ministries, sectors, provincial people's committees under the central government, and State-owned corporations:

1. Ministries, sectors, provincial people's committees under the central government, and State-owned corporations must develop specific measures to attract investment for development, introduce new investment forms encouraged by the state to mobilize investment resources, and ensure the investment targets of the 1996-2000 five-year plan.

2. Ministries, sectors, provincial people's committees under the central government, and State-owned corporations must review their sectoral production plans and territorial planning to serve as a basis for adjusting and selecting investment projects; review the investment structure and objectives of each project to ensure rationality and investment efficiency.

3. When allocating investment funds, ministries, sectors, provincial people's committees under the central government must ensure concentration and avoid dispersion. The maximum duration for implementing Group C projects (from commencement to completion) shall not exceed two years. The number of Group C projects completed within the annual plan of the locality must reach more than 60%. New projects shall not commence if sufficient funds are not available within the specified time frame. For projects failing to meet the completion deadline, financial and banking agencies will cease funding and report to the relevant ministry and local people's committee for handling.

4. Ministries, sectors, provincial people's committees under the central government must report on the implementation of concentrated industrial zone construction, evaluate achievements and shortcomings, especially in infrastructure construction fund mobilization and measures to improve investment effectiveness and attract investment sources.

5. Ministries, sectors, provincial people's committees under the central government must direct the improvement of project documentation, particularly emphasizing the feasibility of investment projects. Technical design documents must meet the requirements set forth. Approval of technical designs and budgets must align with investment decisions, ensuring that the budget does not exceed the approved investment amount. Construction quality must be closely monitored, with clear legal responsibility assigned to individuals or organizations at each stage of the construction project. At the final settlement of the project, financial and banking agencies will only settle accounts when complete settlement documents and accompanying construction quality documents are provided.

6. Investors must strictly follow the investment and construction procedures and bear legal responsibility if projects deviate from the provisions of the Investment and Construction Management Regulations. From 1998 onwards, the Prime Minister will only consider direct assignment of contracts in exceptional cases with complete bidding approval documents and opinions from the Ministry of Planning and Investment. The Prime Minister and competent authorities will not approve requests to increase investment capital beyond the approved total investment amount. The Ministry of Planning and Investment will lead coordination with the Ministry of Construction and the Ministry of Trade to guide bidding procedures for Group C projects and small tender packages to simplify them and make them suitable for the conditions of various sectors and localities.

7. Ministries, sectors, provincial people's committees under the central government must strengthen and organize specialized bodies responsible for investment and construction management to bring such management into a regular system based on selecting staff with adequate professional qualifications, good moral qualities, and high sense of responsibility.

Currently, for some large projects, there exist two advisory organizations assisting the investor (both foreign consultants and domestic project management boards), working concurrently. It is necessary to draw lessons from the organization and division of labor between these two organizations to reduce investment costs and enhance the effectiveness of consulting work, and propose recommendations to the Ministry of Planning and Investment and the Ministry of Construction for consideration by the Prime Minister.

Starting from 1998, the Deputy Prime Minister in charge of the sector will chair monthly basic construction meetings to promptly address difficulties in investment and construction management.

8. Since the beginning of 1998, ministries, sectors, and localities need to review and reorganize some construction enterprises, accelerate the process of shareholding, consolidate, and reduce the number of state-owned enterprises to meet the conditions for participating in domestic and international bidding.

9. The Prime Minister requests ministers, heads of ministerial-level agencies, heads of government agencies, Chairpersons of provincial People's Committees under the central government, and General Corporations to focus on directing and organizing the implementation of this Directive and submit quarterly reports to the Ministry of Planning and Investment before the 30th day of the last month of each quarter for consolidation and reporting to the Prime Minister. The Government's inspection team for basic construction shall maintain regular operations in accordance with the spirit of Document No. 5459/KTN dated October 31, 1997, issued by the Prime Minister.