Circular No. 08-BKH/TH guiding on investment planning pursuant to Government Decree No. 42/CP

CIRCULAR

OF THE MINISTRY OF PLANNING AND INVESTMENT

Guidelines on investment planning pursuant to Government Decree No. 42/CP

To enhance the effectiveness of investment planning work, based on Government Decree No. 42/CP dated July 16, 1996 regarding the issuance of the Investment Management Regulations, the Ministry of Planning and Investment issues this Circular on investment planning to replace Circular No. 03 UB/KHH dated February 23, 1995 as follows:

1. The investment capital plan of each sector and each level must reflect all sources of investment capital within the period of the sector's or level's plan: (nationwide, sectoral, provincial, city, district, commune, and enterprise levels).

1.1. Prior to each planning period, enterprises, localities, ministries, and sectors need to conduct comprehensive surveys and evaluations of the implementation of investment capital during the reporting period. Investors have the responsibility to report to their supervising authorities on the implementation of investment capital from various sources according to the prescribed reporting forms. Regarding private and individual investment capital, in addition to the reports provided by the investment permit issuing agencies, statistical agencies at all levels need to organize typical investigations to assess the situation. Foreign direct investment capital is monitored through issued permits and reported on project implementation status.

Based on the results of the analysis and evaluation of the reporting period, Ministries, State-owned Enterprises established under Decision 91/CP (referred to as SOEs 91), provinces, and cities shall submit reports to the Ministry of Planning and Investment for consolidation of the overall implementation of investment capital nationwide (state budget investment capital, state credit investment capital, domestic enterprise investment capital, private and individual investment capital, foreign direct investment capital).

1.2. Annual and five-year investment plans for the entire national economy, ministries, localities, and enterprises must fully reflect the needs and balance of investment capital sources within their management scope:

+ State Budget Capital (including centralized construction investment capital, capital for national programs, and capital for public services with construction characteristics);

Of which: Foreign capital (foreign loans of the government and international aid dedicated to development) for projects funded by the state budget;

+ State-planned credit capital (including foreign capital from signed projects);

+ National Investment Support Fund capital (based on investment incentives certificates issued by authorized agencies);

+ Commercial loans for investment purposes (loans from domestic banks, foreign private loans with and without guarantees);

+ Investment capital of state-owned enterprises (depreciation reserves, post-tax profits, self-raised capital including share issuance or bond issuance if permitted, capital contributions from land and factory buildings for joint ventures with foreign entities);

+ Capital raised from organizations and individuals for infrastructure construction in the form of charitable funds, gifts, donations, etc.;

+ Construction investment capital of the people and private sector;

+ Foreign Direct Investment (FDI) capital excluding Vietnam's contribution (actual investment capital).

For state budget capital and state-planned credit capital, if there is Official Development Assistance (ODA) funding, it must be specifically recorded and detailed for each program and project.

1.3. Planning agencies at all levels directly implement planning for state capital through statutory indicators and guidelines, closely managing and monitoring the implementation process. They require investors and planning levels to regularly report on the progress and implementation of the plan, especially for group A projects.

For other sources of capital, indirect planning is implemented through guiding plans, managed according to master plans, with investment encouragement policies (by region, sector, product), preferential measures such as interest rates, tax exemptions, input subsidies, or output subsidies, etc., aimed at maximizing resources for development investment.

2. Implement investment planning according to programs and projects approved by competent authorities. An investment program or project can be an independent program or project or a program consisting of several interrelated projects. In the investment decision, the total investment amount for the entire program or project, including inflation adjustments and construction duration (for multi-year construction periods where inflation cannot be determined, it must be clearly stated in the decision), must be specified. When allocating investment capital plans for approved programs and projects, it must ensure compliance with the schedule stipulated in the investment decision.

For state budget investment capital, the Ministry of Planning and Investment consolidates and submits to the Prime Minister for approval the total investment amounts for ministries and localities, specifying the investment amounts for group A and B projects. The list of group C projects is arranged by ministries, localities, and boards of directors of state-owned enterprises, but they must comply with the socio-economic development master plan approved by competent authorities, while ensuring that not less than 60% of group C project investment capital in the planning period is allocated to ongoing projects for completion. The Minister of Planning and Investment announces state credit plans according to the Prime Minister's decisions on sources of capital and credit mechanisms.

3. Capital for public services with construction characteristics

Capital for public services with construction characteristics is used for the following purposes:

Investment in certain state programs implemented over several years (such as Programs 327, 773).

Expenditure for major repairs of non-production facilities.

For projects of the first type, after reaching consensus with relevant ministries, the Ministry of Planning and Investment will notify provinces, cities, and ministries. For projects of the second type, after receiving the state budget expenditure quota, ministries and localities will arrange their investment plans and register with the Ministry of Planning and Investment and the Ministry of Finance in the first quarter of the planning year for inspection of construction procedures and payment disbursement.

4. Content and conditions for recording annual investment plans: Implemented according to Clause b Point 5 of Article 10 of Government Decree No. 42/CP, now detailed as follows:

4.1. Investment capital plan for investigation, survey, and planning work.

The investment capital for investigation, survey, and planning work referred to in this Circular includes capital for industry development investigation, survey, and planning; overall economic and social planning of territorial regions; urban, rural, and adjacent area spatial layout planning (outside industrial zone boundaries). This plan must originate from strategic objectives and requirements for economic and social development planning at the national level, each sector, region, and territory.

The Ministry of Planning and Investment shall submit to the Prime Minister a list of comprehensive economic and social planning projects and new concentrated industrial zone and city projects that need to be implemented during the planning period, recommending the responsible agencies as a basis for recording and allocating the plan.

The list of new planning projects included in the plan consists of projects designated by the Prime Minister or reviewed based on planning implementation requests from ministries, ministerial-level agencies, government agencies, provincial people's committees, and centrally-administered municipal people's committees.

Projects recorded in the plan must have approved tasks and outlines based on economic and technical norms, standards, procedures, and regulations approved by competent authorities. If they are ongoing projects, they must also provide a report on the volume of work completed before the plan recording date and an estimate up to December 31 of the year prior to the plan recording year.

Projects with total design and planning costs of one billion dong or more, and regional plans related to the use of ODA and international organization aid funds must have agreements from the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Construction before review.

Agencies without specialized staff for investigation, survey, and planning work must sign contracts with units and consulting agencies specializing in such work.

4.2. Investment preparation plan.

Investment preparation capital is for conducting works: preliminary feasibility study project investigation, feasibility study project, project evaluation, and investment decision-making. Project establishment and investment project evaluation fees are carried out according to Article 21 of the Investment Management Regulation and the Circulars guiding it issued by the Ministry of Construction.

Preliminary feasibility study and feasibility study project contents are as stipulated in Articles 14 and 15; investment project evaluation is conducted as per Article 16 of the Investment Management Regulation and detailed Circulars issued by the Ministry of Planning and Investment.

For ongoing investment preparation projects, there must be a report on the volume of work completed before the plan recording date and an estimate up to December 31 of the year prior to the plan recording year.

4.3. Project implementation preparation plan.

Investment preparation capital for project implementation is for conducting works: survey, technical design, total budget estimation, tender document preparation, bid evaluation, land acquisition compensation (in some cases, for roads, canals, etc., land acquisition may be carried out simultaneously with the project implementation plan). For particularly important construction projects with long construction periods, if authorized by competent authorities, auxiliary areas, temporary worker housing, and other preparatory project implementation costs related to these projects may also be recorded in the project implementation preparation plan.

Only projects with an Investment Decision can be recorded in the project implementation preparation plan.

4.4. Project implementation plan.

Project implementation capital is for construction and installation, equipment procurement, training, technology transfer costs, acceptance and handover costs, and load testing costs related to putting the project into operation and use.

For large investment programs with many small projects, projects starting construction within the planning period must have approved designs and budgets.

For large investment projects with phased construction, the components recorded in the start-of-construction plan must have approved designs and budgets.

A project cannot simultaneously record plans for investment preparation, project implementation preparation, and project implementation. During the project implementation phase, if a component requires a change in technical design that alters the total budget, the project does not need to stop to prepare for implementation but can proceed concurrently to avoid construction interruptions. For medium and small projects (Group C with investment under 500 million dong), if the project implementation preparation phase can be quickly completed, both phases can be combined and recorded in the project implementation plan.

5. Plan construction and consolidation procedure.

5.1- Guidance and plan construction stage.

The Ministry of Planning and Investment shall lead and coordinate with relevant ministries and sectors to determine and consolidate information sources, informing ministries, major state-owned enterprises, and localities in June each year to prepare for the next year's plan construction:

Forecasting the availability of investment capital from the central budget and other sources for the planning period.

Guiding focused investment in programs, projects, key regions, and priority fields.

Information on programs and projects requiring accelerated preparation of investment and construction conditions and procedures.

Expected mechanisms and policies to be applied during the planning period.

5.2- Stage where ministries, localities, and enterprises construct and report plans.

Based on project implementation progress and prioritized targets, ministries, localities, and enterprises, in coordination with relevant agencies, will specifically determine the project lists and investment capitals, arranged in order of priority.

Based on state-owned enterprise investment plan registrations, non-state-owned enterprise registrations, and other political and social organizations, calculate and determine investment capital sources (content of capital sources as guided in point 1.2), clearly stating domestic capital required for ODA-funded projects, reporting the investment plan together with the economic and social development plan of the ministry, corporation 91, locality, submitted to the Prime Minister for concurrent consolidation by the Ministry of Planning and Investment and the Ministry of Finance by August each year.

Propose necessary mechanisms and policies to ensure the implementation of the investment plan.

5.3 - Consolidation, balancing, and reporting of the national investment plan.

The Ministry of Planning and Investment studies and proposes strategic goals, economic and social development plans for regions, sectors, and territories, including public investment program targets, total investment capital structure for the entire national economy, total investment capital and priority programs and projects funded from the state budget, investment objects financed by preferential state loans, and submits these to the Prime Minister in September of the year preceding the planning year.

Based on the investment programs and projects of ministries, State-owned corporations 91, and localities, the Ministry of Planning and Investment proposes to allocate centralized investment capital from the state budget and preferential state loans to ministries, State-owned corporations 91, and localities to be submitted to the Government in November.

5.4 - Allocation of investment plans

The Prime Minister assigns to ministries, State-owned corporations 91, provinces, and cities the following indicators:

Total centralized investment capital from the state budget, divided into domestic capital and foreign capital, including:

+ Implementation project capital.

+ Investment capital structure according to certain key sectors and objectives.

+ List and investment capital for construction works and projects in Group A, including construction and equipment.

The Prime Minister authorizes the Minister of Planning and Investment to assign the following indicators:

Investigation, survey, planning, and project list capital for important projects with a budget estimate of one billion dong or more.

Preparation for investment and project list for Groups A and B.

Preparation for implementation project capital and project list for Groups A and B.

Project list and implementation project capital for projects in Group B, including construction and equipment.

New capacity mobilization in certain key sectors and fields.

Guidance on capital for continued investment by ministries, State-owned corporations 91 (by sector), and by provinces and cities.

Total preferential state loan capital, project list for borrowing, and loan amount for certain key projects (Groups A and B).

Based on the total and project implementation capital structure assigned by the Prime Minister, the Ministry of Planning and Investment assigns according to authorization and guidance, ministries, localities, and enterprises proactively arrange the remaining capital for Group C and register with the Ministry of Planning and Investment and the Ministry of Finance in the first quarter of each year.

Investment loan capital from the state's preferential loan source for specific programs and projects is implemented according to the guidance of the Ministry of Planning and Investment and the loan agreement signed between the investor and the lending agency.

6. Monitoring and oversight of investment plan implementation

Investors fully implement the statistical reporting system on "investment capital implementation" issued by the General Statistics Office.

Ministries, sectors, State-owned corporations 91, and localities regularly prepare comprehensive and detailed reports every three months, six months, nine months, and annually on the implementation of investment projects to be submitted to the Ministry of Planning and Investment, the Ministry of Finance, the Government Office, and the General Statistics Office. (Specifically, investors of Group A projects must also submit monthly quick reports and hold construction supervision meetings with the Ministry of Planning and Investment).

During the implementation of investment programs and projects, the Ministry of Planning and Investment, the Ministry of Finance, and relevant agencies organize regular or spot checks on the implementation of investment construction programs and projects; they may require ministries, State-owned corporations, and provinces and cities to rearrange or adjust Group C projects to comply with regulations and focus on investment construction.