Decision No. 207/2004/QĐ-TTg on the issuance of management mechanisms and implementation of the Son La Hydropower Project

DECISION OF THE PRIME MINISTER

Regarding the issuance of management mechanisms and implementation of the Son La Hydropower Project

PRIME MINISTER

Pursuant to Resolution No. 44/2001/QH10 of the Tenth National Assembly at its ninth session on June 29, 2001, concerning the investment policy for the Son La Hydropower Plant Project and Resolution No. 13/2002/QH11 of the Eleventh National Assembly at its second session on December 16, 2002, concerning the construction plan for the Son La Hydropower Project;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment Management and Construction Regulations; amended and supplemented by Decree No. 12/2000/NĐ-CP dated May 5, 2000 and Decree No. 07/2003/NĐ-CP dated January 30, 2003 of the Government;

Pursuant to Decision No. 92/QĐ-TTg dated January 15, 2004 of the Prime Minister approving the investment for the Son La Hydropower Project;

Pursuant to Decision No. 09/2004/QĐ-TTg dated January 15, 2004 of the Prime Minister establishing the State Steering Committee for the Son La Hydropower Project;

Pursuant to Decision No. 677/QĐ-TTg dated June 18, 2004 of the Prime Minister on the issuance of the Operation Regulation of the State Steering Committee for the Son La Hydropower Project;

Pursuant to Decision No. 196/2004/QĐ-TTg dated November 29, 2004 of the Prime Minister approving the overall resettlement planning for the Son La Hydropower Project;

Considering the proposal of the Minister of Industry,

DECISION:

Article 1. This Decision promulgates the management and implementation mechanism for the Son La Hydropower Project.

Article 2. The Standard Measurement Quality Control Department shall be responsible for organizing and guiding the implementation of the Regulations adopted herein.

Article 3. The State Steering Committee for the Son La Hydropower Project, Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Committees of the provinces of Son La, Dien Bien, Lai Chau, Board of Directors, General Directors of Vietnam Electricity Corporation and Song Da Corporation shall be responsible for implementing this Decision./.

 

 

MANAGEMENT AND IMPLEMENTATION MECHANISM FOR THE SON LA HYDROPOWER PROJECT

(Issued together with Decision No. 207/2004/QĐ-TTg dated December 11, 2004)

of the Prime Minister)

PART I

GENERAL PROVISIONS

Article 1. Purpose

1. To stipulate special mechanisms applicable exclusively to the management and implementation of the Son La Hydropower Project to ensure timely execution, quality, and efficiency.

2. To define responsibilities, authorities, and tasks of state management agencies, project sponsors, and parties involved in the implementation of the project.

3. To establish coordination mechanisms among ministries, sectors, localities, and parties involved during the management and implementation of the project.

Article 2. Scope of Application

1. Scope of application:

a) The State Steering Committee for the Son La Hydropower Project, relevant ministries, sectors, and localities related to the management and implementation of the Son La Hydropower Project;

b) Sponsors of component projects within the Son La Hydropower Project;

c) General contractors and parties involved in the implementation of component projects.

2. Scope of Application:

This mechanism applies to the Son La Hydropower Project, which includes the following component projects:

a) The construction project of the Son La Hydropower Plant, sponsored by Vietnam Electricity Corporation;

b) The resettlement project according to the managed area, sponsored by the People's Committees of Son La, Dien Bien, and Lai Chau Provinces;

c) The road construction project to avoid flooding, sponsored by the Ministry of Transport.

3. Matters regarding the management and implementation of the project not covered by this mechanism shall be carried out in accordance with current regulations or other permits issued by the Government.

Chapter II

SPECIAL MANAGEMENT AND IMPLEMENTATION MECHANISMS FOR THE PROJECT
CONSTRUCTION OF THE SON LA HYDROPOWER PLANT

Article 3. Design and consulting work

1. Technical design is prepared in two stages. The specific contents of each stage of technical design are prescribed by the Ministry of Industry.

2. The following design components may be approved separately before the first stage of technical design is approved, including:

a) Overall construction site layout planning;

b) Technical design of water flow diversion structures;

c) Components implemented during the preparatory construction phase and serving construction: auxiliary works, housing and office buildings; construction material quarries; public works; construction service works: transportation, electricity, water, communication systems, and the project management office.

3. Organizations conducting consulting work and selection methods.

a) Consulting for technical design - total estimate is a consortium led by Electric Power I Consulting Company, cooperating with Moscow Hydraulic Engineering Institute (Russian Federation). Special tasks may be subcontracted to foreign consultants;

b) Consulting for construction drawing design is a consortium led by Electric Power I Consulting Company, cooperating with Moscow Hydraulic Engineering Institute (Russian Federation). Special tasks may be subcontracted to foreign consultants;

c) Consulting for technical design review and total estimate: consists of domestic consulting organizations designated by the Ministry of Industry and foreign consulting organizations selected through restricted international bidding.

The Ministry of Industry is responsible for specifying the scope of work for consulting reviews;

d) Consulting for construction organization design: conducted by the general contractor. Special tasks may be subcontracted to foreign consultants;

đ) Consulting for construction supervision: the sponsor selects experienced and capable foreign consultants through restricted international bidding. The sponsor introduces domestic consultants to participate with the main consultant in construction supervision;

e) Consulting for project management to assist the sponsor in managing the project: a foreign consulting organization selected by the sponsor through restricted international bidding.

The Ministry of Industry specifies the scope of work, assigns responsibilities for the consulting organizations; approves bidding results and foreign consulting contracts.

Article 4. Unit prices, total estimates, and item estimates

1. Establishing unit prices for special tasks and existing unit prices that are not suitable for the construction project:

The Ministry of Industry establishes a unit price committee. The unit price committee develops unit prices based on the Ministry of Industry's approval after receiving the agreement of the Ministry of Construction.

2. The total estimate of the project is based on the quantities according to the technical design and the unit prices mentioned in Clause 1 of this Article. The total estimate and unit prices serve as the basis for determining the contract value for construction and installation with the general contractor.

The general budget estimate must be prepared and submitted for approval together with the technical design phase 2.

Acceptance and payment of completed project components shall be carried out according to the budget estimate, construction drawings, and construction organization design that have been approved.

For components not within the scope of the main construction contract, acceptance and payment shall be conducted in accordance with current regulations.

3. During the period when the technical design phase 2 and the general budget estimate have not yet been approved, it is permitted to prepare designs and estimates for project components that can commence implementation ahead of time to submit for approval as the basis for signing contracts to implement those components.

Article 5. Scope of construction work for the project and implementation mechanism

1. General contractor and scope of the main construction contract

a) The Sông Đà Corporation is the General Contractor. The subsidiary contractors designated in Decision No. 519/CP-CN dated May 15, 2004 of the Government;

b) The scope of work under the General Construction Contract shall be agreed upon between the project owner and the general contractor.

2. Implementation mechanism of the General Construction Contract.

a) Form and value of the General Construction Contract:

- The General Construction Contract is a contract with adjustable prices signed between the project owner and the General Contractor.

- The value of the General Construction Contract is determined based on the construction installation value (excluding reserves) in the approved general budget estimate for components corresponding to the scope of the General Construction Contract, reduced by 5%.

- Adjustments to the value of the General Construction Contract shall be carried out in accordance with current regulations.

b) Advance payments:

- Advance payments shall be made for each component based on the budget estimate value of the component and the progress of construction implementation of that component. The project owner shall advance pay the general contractor 15% of the component's value but not exceeding the planned annual value of the component. Advance payments start to be recovered once 20% of the component's value has been paid, and all advance payments are recovered once 80% of the component's value has been paid; for lump-sum contracted works, the project owner shall advance pay 30% of the component's value.

- The project owner shall advance pay the general contractor a certain amount of funds to carry out material reserves affected by transportation seasons on the Sông Đà River, high construction intensity (sand, gravel, clinker, etc.). The quantity of material reserves and the level of advance payments shall be agreed upon between the project owner and the General Contractor.

c) Settlement:

- It is allowed for the project owner to pay 92% of the value of completed work when the contractor has completed the settlement procedures. The remaining portion will be paid as follows: 5% upon issuance of the completion acceptance certificate for the component by the State Acceptance Committee, 2% at the end of the 12-month warranty period, and 1% at the end of the 24-month warranty period.

- It is allowed for the project owner to directly pay the subsidiary contractor when the authorized representative of the General Contractor and the Project Management Board sign off on the quality acceptance and quantity confirmation.

3. Mechanism for subcontracting and payment of auxiliary components

- Components serving construction such as construction roads, construction power supply systems below 35KV, water supply, access roads, and basic construction of material quarries, site leveling, auxiliary area construction, housing shall be subcontracted in lump sums based on the approved budget estimate in the design-budget of the respective components. The scale and value of the components shall be determined based on the approved overall construction site plan of the project.

- The capital transfer plan for payment shall be implemented according to the agreement between the project owner and the General Contractor. It is allowed for the project owner to pay up to 95% of the value of the lump-sum subcontracted components depending on the degree of completion of the components, the remaining 5% will be paid when the subcontracted component is completed and confirmed by the Project Management Board.

4. Commercial banks are allowed to lend contractors more than 15% of their own capital to purchase construction equipment for the Sơn La Hydropower Plant.

5. Components not within the scope of the main construction contract. The project owner shall implement according to Decision No. 1470/CP-CN dated October 6, 2004 of the Prime Minister regarding the approval of the bidding plan for the construction of the Sơn La Hydropower Plant project.

Article 6. Equipment and technology

1. The method of selecting suppliers for electromechanical and hydraulic machinery equipment of the main project shall be carried out according to the bidding plan already approved by the Prime Minister in Decision No. 1470/CP-CN dated October 6, 2004.

2. The Ministry of Finance shall provide guarantees for the project owner to borrow foreign capital to purchase domestic equipment and technological materials that are not yet produced or manufactured.

Article 7. Overall construction schedule

The overall construction schedule of the project according to the selected option in the approved technical design phase 1 is the initial direction for implementing the schedule. The project owner shall prepare a complete construction schedule for the entire project (including the resettlement and relocation project and the flood avoidance transportation infrastructure project) along with the technical design phase 2, report to the Ministry of Industry for review, and the State Steering Committee for approval to submit to the Prime Minister for approval.

Article 8. Acceptance

1. Project acceptance is carried out in three levels: Technical Acceptance Board, Basic Acceptance Council, and National Acceptance Council. The National Acceptance Council, chaired by the Minister of Construction, shall conduct acceptance of major project components and milestones: river filling, flood prevention, water storage, starting unit number 1, and completion of the entire plant.

2. The specific organization, tasks, and powers of the acceptance councils at each level, the content, procedure, and process of accepting each component shall be stipulated by the Minister of Construction.

Article 9. Final accounting

The preparation of the final investment accounting report, audit, and approval of the final investment accounting shall be carried out in accordance with current regulations.

Article 10. Reward and penalty mechanisms for schedule implementation

The Ministry of Finance shall take the lead and coordinate with relevant ministries and sectors to establish reward and penalty mechanisms for the implementation of schedules for projects: construction works, resettlement, and flood avoidance transportation infrastructure to be reviewed and decided by the Prime Minister.

Chapter III

SPECIAL MANAGEMENT AND IMPLEMENTATION MECHANISMS FOR THE RESIDENTIAL RELOCATION PROJECT

RELOCATION

Article 11. Land clearance and relocation scope

The land clearance and relocation scope includes:

1. Construction site according to the approved overall construction site plan of the Sơn La Hydropower Plant.

2. The inundation area of the reservoir according to the shoreline release design is determined in the approved technical design.

3. The points for resettling people as specified in the detailed planning that has been approved.

Article 12. Resettlement Planning

Resettlement planning is implemented in two steps as follows:

1. Overall resettlement planning: carried out pursuant to Decision No. 196/2004/QĐ-TTg dated November 29, 2004 of the Prime Minister approving the overall resettlement planning for the Son La Hydropower Project.

2. Detailed planning for resettlement areas: based on the overall resettlement planning for the Son La Hydropower Project as approved in Clause 1 of this Article, detailed planning shall be conducted. The procedures and contents of detailed planning for resettlement areas of the Son La Hydropower Project shall be carried out in accordance with the guidelines issued by the Ministry of Agriculture and Rural Development in Circular No. 2592/BNN-HTX dated October 27, 2004.

Article 13. Preparation of investment projects, design, and budget estimates for projects and works under the resettlement project.

1. Conduct feasibility studies for infrastructure projects (transportation, hydropower, water supply, electricity) with total investment exceeding 5 billion VND.

2. Prepare investment reports for:

a) Infrastructure projects with total investment below 5 billion VND;

b) Production projects, concentrated and interwoven resettlement areas using prefabricated houses or reconstructed houses from previous residences.

3. Investment projects and design, budget estimates for resettlement projects shall apply current unit prices.

4. Allow for one-step design (technical design-construction) for projects and works with total investment under 5 billion VND.

5. Projects and works with total investment over 5 billion VND must have a two-step design: technical design and construction drawings.

6. Permit the Provincial People's Committee to designate consulting units with sufficient capacity and experience to undertake detailed planning, investment project preparation, and design-budget estimates for sub-projects and works under the resettlement project.

7. The People's Committees of provinces shall stipulate the responsibilities and authorities, operational regulations of county-level Project Management Boards and specialized department Project Management Boards; coordination mechanisms between the provincial Project Management Board and county-level investors delegated authority, county-level Project Management Boards, and specialized department Project Management Boards.

Article 14. Management Levels

1. Depending on the management capabilities and implementation organization of the county level and specialized departments, the Chairman of the Provincial People's Committee may decide to delegate management of resettlement projects within the county to the County People's Committee as the main investor and delegate management of specialized projects to specialized departments (transportation, water resources, electricity...). In such cases, the County People's Committee and the specialized department shall establish a Project Management Board to represent the main investor in managing the project. County-level Project Management Boards and specialized department Project Management Boards shall be subject to professional guidance from the provincial Project Management Board.

2. The Chairman of the Provincial People's Committee shall stipulate the responsibilities and authorities, operational regulations of county-level Project Management Boards and specialized department Project Management Boards; coordination mechanisms between the provincial Project Management Board and county-level investors delegated authority, county-level Project Management Boards, and specialized department Project Management Boards.

Article 15. Method of selecting contractors to implement

Depending on the scale and nature of each work item or tender package, the implementation of resettlement projects and infrastructure projects shall be carried out as follows:

1. The Chairman of the Provincial People's Committee is permitted to designate contractors according to regulations with a reduction of 5% of the construction estimate value for projects or works with a total approved estimate up to 10 billion VND.

2. The Director of specialized departments and the Chairman of the County People's Committee are permitted to designate contractors according to regulations with a reduction of 5% of the construction estimate value for projects or works with a total approved estimate up to 3 billion VND.

3. Small projects or works with a tender package value exceeding 10 billion VND must be tendered to select contractors.

Article 16. Management and capital payment

1. The capital source for the construction of the Son La Hydropower Project is implemented pursuant to Decision No. 92/QĐ-TTg dated January 15, 2004 of the Prime Minister regarding the approval of the Son La Hydropower Project investment.

2. Annual plans and progress on resettlement work are developed by the People's Committees of Son La, Lai Chau, and Dien Bien Provinces, reviewed by the Ministry of Agriculture and Rural Development, and decided upon by the Prime Minister. The annual resettlement progress, when reviewed by the Ministry of Agriculture and Rural Development, must align with the overall construction schedule stipulated in Article 7 of this Decision.

3. The allocation of investment capital for annual resettlement projects is determined based on the approved overall resettlement planning and the annual resettlement work plan decided by the Prime Minister.

4. The management of capital, advance payments, payment, and final settlement for compensation, resettlement, and relocation work shall be carried out in accordance with Decision No. 459/QĐ-TTg dated May 12, 2004 and Decision No. 1251/QĐ-TTg dated November 23, 2004 of the Government on compensation, resettlement, and relocation for the Son La Hydropower Project and Circular No. 70/2004/TT-BTC dated July 14, 2004 of the Ministry of Finance on guiding the management and payment of investment capital for the Son La Hydropower Project resettlement project.

5. The main investor shall temporarily pay contractors 10% of the contract value according to the approved total estimate for infrastructure construction projects, and 20% of the contract value according to the approved total estimate for agricultural, forestry production, processing, and seed breeding projects serving resettlement and relocation work.

Chapter IV

SPECIAL MANAGEMENT MECHANISMS FOR IMPLEMENTING THE PROJECTS OF FLOOD AVOIDANCE TRANSPORTATION WORKS

AND THE IMPLEMENTATION OF TRANSPORT INFRASTRUCTURE PROJECTS TO AVOID FLOODING

Article 17. Scope and Scale

1. The scope and scale of flood avoidance transportation works for the Son La Hydropower Project are established and submitted to the Prime Minister for approval by the Ministry of Transport.

2. Transportation works to avoid flooding shall be designed and constructed according to standards consistent with the long-term development orientation set forth in the overall transportation planning for the Northwest region. The plan and construction schedule for transportation works to avoid flooding shall comply with the overall construction schedule specified in Article 7 of this Decision.

Article 18. Sources of Funds

1. The funds from the Son La Hydropower Project Construction Project, which the project investor shall compensate according to the current scale, amounting to VND 1,013,240 billion.

2. The funds from the State budget allocated annually to upgrade the scale of the works from the current level to the long-term scale as announced by the Ministry of Planning and Investment.

3. The Ministry of Finance shall guide investors and related units in implementing annual capital transfers and final settlement.

Chapter V

RESPONSIBILITIES OF MINISTRIES, SECTORS, LOCAL AUTHORITIES AND RELATED PARTIES

AND THE RELATED PARTIES

Article 19. National Steering Committee for the Son La Hydropower Project

Shall implement the contents regarding the responsibilities of the Steering Committee and the responsibilities of relevant ministries, sectors, and localities as stipulated in Decision No. 09/2004/QD-TTg dated January 15, 2004, establishing the National Steering Committee for the Son La Hydropower Project, and Decision No. 677/QD-TTg dated June 18, 2004, promulgating the Operation Regulations of the National Steering Committee for the Son La Hydropower Project.

Article 20. Responsibilities of the Ministries, sectors, People's Committees of Son La, Dien Bien, and Lai Chau Provinces, Vietnam Electricity Corporation, and Song Da Corporation: Implement the tasks prescribed in Decision No. 92/QD-TTg dated January 15, 2004 on approving investment in the Son La Hydropower Project and Decision No. 677/QD-TTg dated June 18, 2004 of the Prime Minister promulgating the Operation Regulations of the National Steering Committee for the Son La Hydropower Project.

Chapter VI

IMPLEMENTING PROVISIONS

Article 21. The National Steering Committee for the Son La Hydropower Project, Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of the People's Committees of Son La, Dien Bien, and Lai Chau Provinces, Boards of Directors, General Directors of Vietnam Electricity Corporation and Song Da Corporation shall be responsible for implementing this mechanism.

Article 22. During the implementation of this mechanism, if there are any difficulties, the Ministry of Industry shall compile opinions from ministries, sectors, and localities; propose necessary supplements and amendments for consideration and decision by the Government Head.