Decree No. 112/2006/ND-CP On Amending and Supplementing Certain Provisions of Decree No. 16/2005/ND-CP on Project Management for Construction Investment Projects

DECREE

Regarding amendments, and additions to certain articles of Decree No. 16/2005/NĐ-CP

on project management for construction investment projects

___________________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Construction Law dated November 26, 2003;

Considering the proposal of the Minister of Construction,

DECREE:

Article 1. Amending and supplementing certain articles of Decree No. 16/2005/NĐ-CP dated February 7, 2005 of the Government on project management for construction investment projects as follows:

2. Amending and supplementing Article 7 as follows:

"1. For projects using state budget funds, the investor of the construction project shall be decided by the investment decision maker before preparing the construction investment project in accordance with the provisions of the State Budget Law.

a) For projects decided on investment by the Prime Minister, the investor shall be one of the following agencies or organizations: Ministries, ministerial-level agencies, government agencies, other central agencies (collectively referred to as ministry-level agencies), People's Committees of provinces and centrally-administered cities (collectively referred to as provincial-level People's Committees), and state-owned enterprises.

b) For projects decided on investment by ministers, heads of ministry-level agencies, and chairpersons of People's Committees at all levels, the investor shall be the unit managing and using the project.

In cases where the managing and using unit cannot be determined or does not meet the conditions to be the investor, the investment decision maker shall select a unit that meets the conditions to be the investor. If the managing and using unit does not meet the conditions to be the investor, the investment decision maker shall assign the task to the unit that will manage and use the project to send representatives to participate with the investor in managing the construction investment project and take over management and use upon completion of the project."

2. Amend and supplement Clause 1 of Article 4 as follows:

"1. For national key projects according to Resolution No. 66/2006/QH11 of the National Assembly, the investor must prepare an Investment Report to submit to the Government for consideration and then to the National Assembly for approval of the investment policy and permission to invest. For other projects, the investor is not required to prepare an Investment Report.

For Group A projects not included in the approved industry planning, the investor must report to the relevant ministry for review and supplementation of the planning within its authority or submit to the Prime Minister for approval to supplement the planning before preparing the construction investment project.

The location and scale of construction must comply with the approved urban planning; if not included in the urban planning, it must be approved by the provincial People's Committee."

3. Amending and supplementing Article 7 as follows:

"Article 7. Contents of the basic design of the project

1. The contents of the basic design include the explanatory section and drawings, ensuring the representation of design options and serving as the basis for determining the total investment amount and proceeding with subsequent design steps.

2. The explanatory section of the basic design includes the following contents:

a) General layout characteristics; route option for linear construction projects; architectural option for projects requiring architecture; process and schematic diagrams for projects requiring technology;

b) Main load-bearing structure of the project; fire prevention and explosion protection; environmental protection; technical systems and infrastructure technical systems of the project, connection with external infrastructure technical systems;

c) Description of loads and impacts on the project;

d) List of standards and regulations applied.

3. The drawings of the basic design shall be presented with main dimensions, including:

a) General layout drawings, route option drawings for linear construction projects;

b) Drawings showing architectural options for projects requiring architecture;

c) Process diagrams for projects requiring technology;

d) Drawings showing the main load-bearing structure of the project; drawings of technical systems and infrastructure technical systems of the project."

"Article 8. Liquidity ratio, in case microfinance organizations have a risk of losing the ability to pay, losing the ability to pay

"Article 8. Documents for approval of construction investment projects

The documents for approval of construction investment projects include:

1. Approval request for the project according to the model attached as Appendix No. 2 to this Decree;

2. The project including the explanatory section and basic design;

3. Review documents from competent authorities;

4. Investment permission documents for national key projects; planning supplementation approval documents for Group A projects not included in the industry planning."

5. Amend and supplement Article 9 as follows:

"Article 9. Authority to review construction investment projects

1. The investment decision maker is responsible for organizing the review of the project before approval. The lead reviewer of the project is the specialized unit directly under the investment decision maker. The lead reviewing unit is responsible for submitting the project documents to the competent authority specified in Clause 6 of this Article for comments on the basic design review and soliciting opinions from related agencies to review the project.

2. The Prime Minister establishes a National Review Council for investment projects to organize the review of projects decided on investment by the Prime Minister and other projects if deemed necessary.

3. For projects using state budget funds:

a) Ministry-level agencies organize the review of projects they decide on investment. The lead organization for reviewing the project is the specialized unit directly under the investment decision maker;

b) Provincial-level People's Committees organize the review of projects they decide on investment. The Department of Planning and Investment is the lead organization for reviewing the project.

District-level and commune-level People's Committees organize the review of projects they decide on investment. The lead reviewer of the project is the unit with planning and budget management functions directly under the investment decision maker.

4. For other projects, the investment decision maker organizes the review of the project independently.

5. For special construction investment projects, the project review shall be carried out in accordance with the provisions of Decree No. 71/2005/NĐ-CP dated June 6, 2005 of the Government.

6. Authority to review the basic design:

a) For national key projects and Group A projects, regardless of funding sources, the review of the basic design shall be conducted as follows:

The Ministry of Industry organizes the review of the basic design for projects involving tunnel, mine, oil and gas, power plant, transmission line, substation, chemical, industrial explosives, machinery manufacturing, metallurgy, and specialized industrial construction works;

The Ministry of Agriculture and Rural Development organizes the review of the basic design for water conservancy, dike, and flood control projects.

The Ministry of Transport shall organize the review of the basic design for construction projects under investment projects for transportation works;

The Ministry of Construction shall organize the review of the basic design for construction projects under investment projects for civil works, industrial building materials, urban technical infrastructure, and other construction projects as required by the Prime Minister.

For investment projects for a single civil work under 20 stories, the Department of Construction shall organize the review of the basic design.

In cases where a project includes various types of works, the leading ministry organizing the review of the basic design shall be one of the ministries mentioned above that has the management function over the type of work determining the nature and objectives of the project. The leading ministry organizing the review of the basic design shall be responsible for soliciting written opinions from relevant ministries and agencies managing specialized works to review the basic design.

b) For Group B and C projects, regardless of the source of funds, except for Group B and C projects specified in points c and d of this clause, the review of the basic design shall be carried out as follows:

The Department of Industry shall organize the review of the basic design for construction projects under investment projects for mine tunnels, oil and gas facilities, power plants, power transmission lines, substations, chemical works, industrial explosives, machinery manufacturing, metallurgy, and other specialized industrial works;

The Department of Agriculture and Rural Development shall organize the review of the basic design for construction projects under investment projects for water conservancy works, dyke systems;

The Department of Transport shall organize the review of the basic design for construction projects under investment projects for transportation works;

The Department of Construction shall organize the review of the basic design for construction projects under investment projects for civil works, industrial building materials, and other construction projects as required by the Chairman of the Provincial People's Committee.

For investment projects for urban technical infrastructure, the Department of Construction, the Department of Transport, or the Department of Transportation shall organize the review of the basic design in accordance with the functions and tasks prescribed by the Provincial People's Committee.

In cases where a project includes various types of works, the leading department organizing the review of the basic design shall be one of the departments mentioned above that has the management function over the type of work determining the nature and objectives of the project. The leading department organizing the review of the basic design shall be responsible for soliciting written opinions from relevant departments managing specialized works and related agencies to review the basic design.

c) For Group B and C projects invested by the Ministry of Industry, the Ministry of Agriculture and Rural Development, the Ministry of Transport, the Ministry of Construction, economic groups, and state-owned corporations in their respective specialized fields, these ministries and enterprises shall organize the review of the basic design on their own after obtaining the local opinion on the construction planning and environmental protection.

d) For Group B and C projects involving construction works along routes through multiple localities, the ministry specified in point a of this clause shall organize the review of the basic design and shall be responsible for soliciting the opinions of the localities where the construction works are located regarding the construction planning and environmental protection.

7. The agency organizing the review of the basic design shall be responsible for sending the results of the review of the basic design to the lead unit reviewing the project. The time limit for reviewing the basic design shall not exceed 30 working days for national key projects, 20 working days for Group A projects, 15 working days for Group B projects, and 10 working days for Group C projects, counted from the date of receipt of complete valid documents.

"Article 10. Collateral for Loans

Article 10. Content of Project Investment Construction Review

1. Content of Project Investment Construction Review by the investor decision-maker:

a) Examining factors ensuring the effectiveness of the project, including: the necessity of investment; input factors of the project; scale, capacity, technology, time, progress of implementing the project; financial analysis, economic and social efficiency of the project;

b) Examining factors ensuring the feasibility of the project, including: compliance with planning; land use needs, resources (if applicable); ability to clear land, ability to mobilize capital to meet the project schedule; management experience of the investor; results of the basic design review; ability to repay loans; fire prevention measures; factors affecting the project such as national defense, security, environment based on the written opinions of relevant agencies and other relevant laws.

2. Content of Basic Design Review by the competent authority:

a) Compliance of the basic design with construction planning; connection with external technical infrastructure works;

b) Application of construction standards, environmental standards, fire prevention standards;

c) Conditions for the operational capacity of consulting organizations, professional qualifications of individuals preparing the basic design as stipulated.

7. Amend and supplement Clause 1 and Clause 4 of Article 12 as follows:

a) Amend and supplement Clause 1 as follows:

"1. When investing in the following construction works, the investor does not need to prepare an investment project for construction but only prepares a Technical and Economic Report for Construction to submit to the investor decision-maker for approval:

a) Construction works for religious purposes;

b) New construction works, renovation, repair, upgrading with a total investment amount below 7 billion VND, consistent with socio-economic development planning, industry planning, construction planning; except in cases where the investor decision-maker deems it necessary and requires the preparation of an investment project for construction.

b) Amend and supplement Clause 4 as follows:

"4. The investor shall be responsible for organizing the review of the construction drawing design for the investor decision-maker to approve the Technical and Economic Report.

8. Amend and supplement Clause 1 of Article 13 as follows:

"1. An investment project for construction may be adjusted when one of the following situations occurs:

a) Affected by natural disasters such as earthquakes, typhoons, floods, tsunamis; enemy attacks or other force majeure events;

b) New factors emerge that bring higher efficiency to the project;

c) When construction planning changes directly affecting the location, scale, nature, and objectives of the project."

9. Amend and supplement Clause 1 of Article 17 as follows:

"1. Prior to commencing construction of a project, the investor must have a construction permit, except for the following projects:

a) Projects involving state secrets, emergency construction projects, temporary projects serving the main construction projects;

b) Construction projects along routes not passing through urban areas but consistent with approved planning, projects under investment and construction programs that have been approved by competent state agencies;

c) Construction projects within urban development zones, industrial zones, residential areas with detailed construction plans at a scale of 1/500 that have been approved by competent state agencies;

d) Repair, renovation, and installation of equipment inside buildings without changing the architectural design, load-bearing structure, and safety of the building;

đ) Small-scale technical infrastructure projects in remote and far-flung rural areas;

e) Individual houses in remote and far-flung areas outside urban areas and concentrated residential areas; individual houses in rural scattered residential areas without approved construction planning."

10. Amend and supplement Clause 3 of Article 18 as follows:

"3. The design drawings must show the location plan, typical cross-sections, typical elevations; foundation plan of the project; schematic layout or route of the project; schematic system and connection points for electricity supply, water supply, drainage; current status photographs (for repair and renovation projects requiring a construction permit).

For projects that have been reviewed by competent authorities on the basic design, the investor shall submit the results of the basic design review instead of the documents specified in this clause."

11. Amend and supplement Article 35 as follows:

"Article 35. Forms of Project Management

1. The investment decision maker decides on the form of project management according to Clause 2 of Article 45 of the Construction Law.

2. In cases where the investor directly manages the project, the investor establishes a Project Management Board to assist the investor in managing the project. The Project Management Board must have the organizational capacity to perform project management tasks as required by the investor. The Project Management Board may hire consulting firms to manage certain tasks if it lacks the necessary conditions and capacity, but such hiring must be agreed upon by the investor.

For small and simple projects with a total investment amount below one billion dong, the investor may not establish a Project Management Board and instead use their own specialized staff to manage and operate the project or hire professionals with experience to assist in managing the project.

3. In cases where the investor hires a consulting firm to manage and operate the project, the consulting firm must have the necessary conditions and capacity to manage the project according to its scale and nature. The responsibilities and rights of the project management consultant are carried out according to the agreement between both parties. The project management consultant may hire other organizations or individuals to participate in management, but such hiring must be approved by the investor and comply with the contract signed with the investor. When applying the form of hiring a project management consultant, the investor must still use specialized units within their own organization or designate a focal point to monitor the implementation of the contract by the project management consultant."

12. Amend and supplement Article 36 as follows:

"Article 36. Tasks and Responsibilities of the Investor and the Project Management Board when the Investor Establishes a Project Management Board

1. The investor performs tasks and exercises rights from the project preparation stage to the completion and handover of the project for operation, ensuring the effectiveness and feasibility of the project and compliance with legal regulations. The investor is responsible for establishing a Project Management Board to assist in managing the project. The assignment of tasks and delegation of authority to the Project Management Board must be reflected in the decision to establish the Project Management Board. The investor is responsible for directing, supervising, and bearing responsibility for the results of the Project Management Board's performance of tasks and exercise of rights.

2. The Project Management Board performs tasks assigned by the investor and exercises delegated rights. The Project Management Board is responsible to the investor and the law for the tasks and rights assigned to them."

13. Amending and supplementing Article 37 as follows:

"Article 37. Tasks and Responsibilities of the Investor and the Project Management Consultant when the Investor Hires a Project Management Consultant

1. The investor performs tasks and exercises rights from the project preparation stage to the completion and handover of the project for operation, ensuring the effectiveness and feasibility of the project and compliance with legal regulations. The investor is responsible for selecting and signing a contract with a project management consulting firm that has the necessary conditions and capacity to assist in managing the project. The investor is responsible for monitoring the implementation of the contract by the project management consultant.

2. The project management consultant performs tasks and exercises rights according to the agreement in the contract signed between the investor and the project management consultant. The project management consultant is responsible to the law and the investor for fulfilling the commitments in the contract."

14. Amend and supplement Clause 2 and Clause 5 of Article 43 as follows:

a) Amend and supplement Clause 2 as follows:

"2. The settled investment capital is the total legitimate costs incurred for the construction and commissioning of the project. Legitimate costs are those incurred within the scope of the design and budget approved, including adjustments and supplements, or costs incurred in accordance with signed contracts and in compliance with legal provisions. For projects using state budget funds, the settled investment capital must be within the limit of the total investment ceiling approved by the competent authority."

b) Amend and supplement Clause 5 as follows:

"5. The investor shall be responsible for preparing the final settlement dossier of the project investment capital to submit to the competent authority for approval within twelve months for national key projects and Group A projects; nine months for Group B projects; six months for Group C projects from the date the works are completed, put into operation, and use. Within six months from the date of the decision approving the final settlement of the completed project, the investor shall be responsible for settling debts, closing the project account at the payment and lending agency."

15. Amend and supplement Clause 1 of Article 46 as follows:

"1. Depending on the scale, nature, and time requirements of the project, the investor shall enter into a contract with one or more main contractors. The main contractor may enter into contracts to perform work with one or more subcontractors but must obtain the investor's consent in the contract signed with the investor and comply with the provisions of the Law on Bidding."

16. Replace Appendix No. 1 on classification of construction investment projects issued together with Decree No. 16/2005/NĐ-CP dated February 7, 2005 of the Government on management of construction investment projects with the Appendix on classification of construction investment projects issued together with this Decree.

Article 2. Repeal Articles 24, 25, 26, 27, 28, and 29 on selection of contractors in construction activities of Decree No. 16/2005/NĐ-CP dated February 7, 2005 of the Government on management of construction investment projects.

Article 3. Transitional Provisions

1. For construction investment projects that have been approved before the effective date of this Decree but have not yet commenced implementation or are still ongoing, there is no need to re-approve the project; subsequent tasks shall be carried out in accordance with the provisions of this Decree.

2. For construction investment projects that have not yet been approved, they shall be implemented in accordance with the provisions of this Decree.

Article 4. Implementation provisions

This Decree shall take effect fifteen days after its publication in the Official Gazette.

The Ministry of Finance shall be responsible for guiding insurance in investment construction activities. The Ministry of Construction shall be responsible for establishing a system of information on the capacity and activities of construction consulting organizations and contractors, including foreign contractors operating in Vietnam.

The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under the central government, Chairpersons of boards of directors of state-owned enterprises, and related organizations shall be responsible for implementing this Decree./.