Decision No. 2107/QD-TTg on the establishment of special mechanisms for managing and implementing the Son La Hydropower Project

Pursuant to …;

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

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PRIME MINISTER

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

Pursuant to the Construction Law dated November 26, 2003;

Pursuant to the Law Amending and Supplementing Certain Provisions of Laws Related to Investment in Construction Projects dated June 19, 2009;

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. 112/2009/NĐ-CP dated December 14, 2009 of the Government on managing construction project costs; Decree No. 12/2009/NĐ-CP dated February 12, 2009 of the Government on managing construction investment projects; Decree No. 83/2009/NĐ-CP dated October 15, 2009 amending and supplementing certain articles of Decree No. 12/2009/NĐ-CP; and Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when land is reclaimed by the State;

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 National Steering Committee for the Son La Hydropower Project and Decision No. 677/QĐ-TTg dated June 18, 2004 of the Prime Minister promulgating the operational regulations of the National Steering Committee for the Son La Hydropower Project;

Pursuant to Decision No. 801/QĐ-TTg dated June 4, 2010 of the Prime Minister approving the overall relocation planning for the Son La Hydropower Project;

Considering the proposal of the Minister of Industry and Trade,

DECISION:

Article 1. Issued together with this Decision is the Management and Implementation Mechanism for the Son La Hydropower Project.

Article 2. This Decision takes effect from the date of signing and replaces the following Decisions of the Prime Minister: No. 207/2004/QĐ-TTg dated December 11, 2004 on issuing the management and implementation mechanism for the Son La Hydropower Project; No. 11/2007/QĐ-TTg dated January 23, 2007 on amending and supplementing certain provisions of the management and implementation mechanism for the Son La Hydropower Project; and No. 136/2008/QĐ-TTg dated October 9, 2008 on amending Article 15 of Decision No. 207/2004/QĐ-TTg.

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

 

MECHANISM

Management and implementation of the Son La Hydropower Project

(Issued together with Decision No. 2107/QĐ-TTg dated November 18

2010 of the Prime Minister)

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Chapter 1.

GENERAL PROVISIONS

Article 1. Purpose

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

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

3. Establishes 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 National Steering Committee for the Son La Hydropower Project, relevant ministries, sectors, and localities involved in the management and implementation of the Son La Hydropower Project;

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

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

2. Scope of Application:

This mechanism applies to the Son La Hydropower Project including the following component projects:

a) Construction project of the Son La Hydropower Plant, sponsored by Vietnam Electricity Corporation (formerly Vietnam Electric Power Corporation);

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

c) Construction project of traffic routes to avoid flooding, sponsored by the Ministry of Transport.

3. Matters regarding the management and implementation of the project not covered by this regulation shall be carried out in accordance with current regulations.

Chapter 2.

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

Article 3. Design and consulting work

1. Technical design is prepared in two stages. The specific contents of technical design for each stage are defined by the Ministry of Industry and Trade (formerly the Ministry of Industry).

2. The following design contents may be approved separately before the approval of the first stage of technical design:

a) Overall construction site layout plan;

b) Technical design of water diversion structures;

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

3. Consulting organizations and selection methods:

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

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

The Board of Directors (formerly the Board of Management) of Vietnam Electricity Corporation is permitted to designate foreign consultants to assist the main consultant in preparing construction drawings.

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

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

d) Consulting for organizing construction: performed by the general contractor. Specialized tasks may be subcontracted to foreign consultants.

d) The investor selects foreign consultants with experience and capacity to supervise construction of the energy line, concrete roller-compacted dam (RCC) section, and other technically complex project components through limited international bidding; the investor organizes the implementation or hires supervision consultants for the remaining components and tasks in accordance with current regulations;

The Ministry of Industry and Trade stipulates the scope of work, assigns responsibilities for implementing organizations; approves the bidding results and foreign consultancy contracts;

Article 4. Unit price, total budget estimate, and item estimates

1. The Ministry of Industry and Trade establishes the Construction Project Unit Price Board. The Unit Price Board develops unit prices and cost norms, submits them for review by the investor, and then submits them for approval by the Ministry of Industry and Trade after obtaining the agreement of the Ministry of Construction;

The Ministry of Industry and Trade considers delegating authority to the Unit Price Board to adjust annual price escalation in line with current price adjustment regulations at each time point;

2. The total construction budget estimate is prepared and approved after the technical design phase 2, and the unit price must be issued and approved no later than when 30% of the construction value has been implemented within the total investment ceiling;

3. Acceptance, payment of completed item volumes according to the budget, construction drawings, and construction organization designs that comply with the approved technical design and total budget estimate;

4. During the period before the technical design phase 2 and the total budget estimate are approved, allow the preparation of designs and estimates for project components that can be initiated ahead of time for submission for approval to serve as the basis for signing contracts to implement those components;

Article 5. Scope of construction works and implementation mechanism

1. General contractor and general contracting contract scope:

a) The Red River Corporation (formerly the Red River Corporation Joint Stock Company) is the General Contractor. Member contractors include: Infrastructure Development Corporation (LICOGI); Vietnam Mechanical Installation Corporation (LILAMA); Binh Son Corporation (Binh Duong 12);

The Red River Corporation and member contractors divide the workload based on their capacity and experience to ensure project objectives, schedule, and quality;

b) The scope of work under the General Contracting Contract is agreed upon between the investor and the general contractor in the General Construction Contract;

2. Other contractors include: Highway Construction Corporation 1, Waterway Construction Corporation, Hanoi Construction Corporation, Import-Export Construction Corporation (Vinaconex), which directly sign contracts with the Son La Hydropower Plant Investor to undertake related road, bridge, port, housing, office, and site control room works;

3. Implementation mechanism for the General Contracting Contract:

a) Form and value of the General Contracting Contract:

- The General Contracting Contract is a price-adjustable contract signed between the investor and the general contractor. Adjustments to the value of the General Contracting Contract are carried out in accordance with current regulations;

- The value of the General Contracting Contract is determined based on the pre-tax value of the construction installation budget estimate (including contingency) approved for corresponding items within the scope of the General Contracting Contract, reduced by 2%; excluding items already accepted and settled, and contracts already accepted and liquidated;

b) Advance payments:

- The investor temporarily advances funds to the General Contractor or subcontractors in accordance with current regulations on project management and construction costs;

- The investor temporarily advances funds to the General Contractor for material reserves affected by transportation seasons on the Red River, high construction intensity (sand, gravel, clinker, etc.). The quantity of materials reserved and the amount advanced are agreed upon by the investor and the General Contractor;

- For lump-sum items, the investor temporarily advances 30% of the item value;

c) Settlement:

- The investor may pay 97% of the completed work value (of the remaining portion after deducting savings from direct award) once the contractor completes the payment procedures. The remainder will be paid as follows: 2% at the end of the 12-month warranty period and 1% at the end of the 24-month warranty period;

- The investor may make direct payments to subcontractors upon quality acceptance and volume confirmation by authorized representatives of the General Contractor and the Project Management Board;

- The investor may pay up to 85% of the design estimate before the total budget estimate is approved;

4. Mechanism for lump-sum and payment of auxiliary items:

- Auxiliary items such as traffic systems, construction power supply systems, water supply, access roads to material quarries, and contractor offices are lump-sum priced based on approved budget estimates. Auxiliary items are accepted based on scale and functionality. The scale and value of these items are determined based on the approved construction site plan;

The Ministry of Industry and Trade considers and decides on adjusting living standards for workers according to the investor's and general contractor's proposals (including accommodation, ancillary areas, and courtyards); approves the percentage of lump-sum campsite costs according to the total budget estimate;

There is no 2% reduction for auxiliary items such as traffic systems, power supply, water supply, basic construction of material quarries, leveling, and construction of ancillary areas, campsites, offices, and construction materials provided through competitive bidding or tendering;

- The capital transfer payment plan is implemented according to the agreement between the investor and the General Contractor. The investor may pay up to 95% of the lump-sum value of preparatory items based on the completion level of the items, with the remaining 5% to be paid once the lump-sum item is completed and confirmed by the Project Management Board;

5. Allow the investor to construct an auxiliary cement additive production facility using Phap Lai fly ash (this item belongs to the ancillary area of the Son La Hydropower Plant Project);

6. Permit commercial banks to lend contractors up to 15% more than their own capital to purchase construction equipment for the Son La Hydropower Plant.

7. The project investor is permitted to borrow funds from banks without having to conduct an assessment of the borrowing and repayment plan.

8. Items not within the scope of the general construction contract for the Son La Hydropower Project. The project investor shall implement according to Document No. 1470/CP-CN dated October 6, 2004, issued by the Prime Minister approving the bidding plan for the Son La Hydropower Construction Project.

9. Permitting the separation of the system connecting the Son La Hydropower Plant to the national power grid from the Son La Hydropower Project and entrusting it to the Vietnam Electricity Corporation to implement. The corporation is responsible for completing the connection system in synchronization with the progress of the Son La Hydropower Construction Project.

10. The Ministry of Industry and Trade and the Ministry of Construction shall direct the Vietnam Electricity Corporation, the Sông Đà Corporation, and the participating contractors under the general construction contract to urgently carry out construction work to meet the approved schedule of the Son La Hydropower Construction Project by the Prime Minister.

Article 6. Equipment and Technology

1. The method of selecting contractors to supply electromechanical equipment for the main works shall be carried out according to the bidding plan approved by the Prime Minister.

2. The selection of contractors to provide hydraulic mechanical equipment shall be implemented in accordance with the directives of the Prime Minister.

3. The Board of Directors of the Vietnam Electricity Corporation shall approve the results of the bidding for electromechanical equipment packages and the value of the package supplying hydraulic mechanical equipment by domestic contractors for the Son La Hydropower Construction Project.

4. The Ministry of Finance shall undertake guaranteeing the project investor's foreign borrowing; organizing the issuance of international bonds to purchase equipment, materials, and technology that have not yet been produced domestically.

Article 7. Overall Construction Schedule

The overall construction schedule for the project according to the selected option in the technical design phase 1, which has been approved, serves as the initial direction for implementing the schedule. The project investor shall establish a complete overall construction schedule for the entire project (including both the resettlement and relocation project and the flood avoidance transportation projects) along with the technical design phase 2, report to the Ministry of Industry and Trade for review, and submit to the State Steering Committee for approval to be submitted to the Prime Minister for approval.

Article 8. Acceptance

1. The completion inspection of the project shall be conducted in three levels: Technical Inspection Board, Basic Completion Inspection Council, and National Completion Inspection Council. The National Completion Inspection Council shall be chaired by the Minister of Construction and shall inspect the main works and key milestones of the project: river filling, flood prevention, water storage, starting up unit number 1, and the completion of the entire plant.

2. The organization, tasks, and powers of each level of the completion inspection council, the content, procedure, and process of inspecting each item shall be specified by the Minister of Construction.

Article 9. Final Accounts

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

Article 10. Reward and Penalty Mechanism for Progress Implementation

The Ministry of Finance shall take the lead and coordinate with relevant ministries and sectors to develop a reward and penalty mechanism for the implementation of progress in projects: construction works, resettlement and relocation, and flood avoidance transportation projects to be reviewed and decided by the Prime Minister.

Allowance for commendation and competition on the construction site is 2 billion VND annually, implemented from 2007 to 2012, with the commendation funds drawn from the savings due to designated bidding.

Chapter 3.

SPECIAL MANAGEMENT AND IMPLEMENTATION MECHANISMS FOR THE RESIDENTS RELOCATION PROJECT

Article 11. Scope of Land Acquisition and Relocation

The scope of land acquisition and relocation includes:

1. Construction site area according to the approved overall construction layout of the Son La Hydropower Project.

2. Flood inundation area according to the shoreline determined in the approved technical design.

3. Resettlement points according to detailed regulations approved.

4. Construction site area for the construction of flood avoidance transportation projects; water conservancy projects, and water supply projects for resettlement points.

5. Land and property of relocated households located above the flood level, moved to resettlement points far from their original production areas, where the relocated households no longer have the conditions to manage and use them.

Article 12. Planning for Residents' Relocation

Planning for residents' relocation shall be carried out in two steps as follows:

1. Comprehensive planning for residents' relocation: The Ministry of Agriculture and Rural Development shall organize its establishment; the Ministry of Planning and Investment shall review and submit the comprehensive planning for residents' relocation of the Son La Hydropower Project to the Prime Minister for approval.

2. Detailed planning for resettlement zones and points:

a) Based on the comprehensive planning for residents' relocation of the Son La Hydropower Project approved by the Prime Minister, the People's Committees of Son La, Lai Chau, and Dien Bien provinces shall proceed to establish detailed planning for resettlement zones and points within their respective provinces;

b) The Ministry of Agriculture and Rural Development shall guide the procedures, processes, and contents of detailed planning for resettlement zones and points of the Son La Hydropower Project.

Article 13. Preparation of Investment Projects, Design, and Budget Estimates for Projects and Works Under the Residents' Relocation Project

1. The preparation of economic and technical reports for infrastructure works (transportation, water conservancy, electricity supply, water supply...), investment project establishment, and design stages shall be carried out according to current regulations on project management and construction.

2. Permitting the People's Committee of the province to designate consulting units with sufficient capacity and experience to undertake the preparation of detailed planning, investment projects, and design-budget estimates for sub-projects and works under the residents' relocation project.

3. The People's Committees of the provinces shall specify the分级审批管理

Article 14. 分级管理

1. Depending on the management capacity and implementation organization of the investment project at the district level and specialized departments, the Chairman of the Provincial People's Committee may decide to delegate authority to the District People's Committee to be the main investor for resettlement projects within their districts, and delegate authority to specialized departments (Transportation, Agriculture and Rural Development, Industry and Trade, etc.) to be the main investors for specialized projects. In this case, the District People's Committee and the relevant specialized department shall decide to establish a Project Management Board to represent the main investor in managing the project. The District-level Project Management Boards and specialized department Project Management Boards shall be subject to professional guidance from the Provincial-level Project Management Board.

2. The Chairman of the Provincial People's Committee shall stipulate the responsibilities and authorities, operational regulations of the District-level Project Management Boards and specialized department Project Management Boards; and the coordination mechanism between the Provincial-level Project Management Board and the delegated main investors at the district level, as well as the District-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 component of the construction works or tender packages, 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 the approved budget estimate for construction work before tax up to 10 billion VND.

2. The Director of the specialized department and the Chairman of the District People's Committee are permitted to designate contractors for projects or components with an approved budget estimate for construction work before tax up to 3 billion VND.

3. Small projects or components with a tender package value exceeding 10 billion VND must be tendered to select contractors; in cases of designation, approval from the Prime Minister is required.

4. The rate of savings from designating contractors for projects, small projects, or components shall be implemented as follows:

a) For contracts that have been and are being implemented: the reduction rate is 5%, now reduced to 2%, except for projects, small projects, or components that have been accepted and settled, and subcontracts that have been accepted and liquidated;

b) Projects, small projects, or components currently negotiating to sign contracts; the reduction rate is 2%.

Article 16. Management and payment of capital

1. The capital source for the Son La Hydropower Resettlement Project shall be implemented according to Decision No. 801/QĐ-TTg dated June 4, 2010, of the Prime Minister approving the overall resettlement plan for the Son La Hydropower Project.

2. The annual plans and progress for resettlement work in the provinces of Son La, Lai Chau, and Dien Bien shall be developed by the respective provincial people's committees, compiled by the Ministry of Agriculture and Rural Development, submitted to the Ministry of Planning and Investment for review, and reported to the Prime Minister for approval. The annual resettlement progress must align with the total construction schedule specified in Article 7 of this Decision.

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

4. The management of capital, advance payments, payments, and settlement of capital for compensation, resettlement, and relocation work shall be carried out according to Decision No. 02/2007/QĐ-TTg dated January 9, 2007, of the Prime Minister promulgating regulations on compensation, support, and resettlement for the Son La Hydropower Project; Decisions No. 31/2008/QĐ-TTg dated February 25, 2008, and No. 72/2009/QĐ-TTg dated May 4, 2009, of the Prime Minister amending and supplementing certain provisions of the regulations on compensation, support, and resettlement for the Son La Hydropower Project, issued together with Decision No. 02/2007/QĐ-TTg, and Circulars guiding the Ministry of Finance on compensation, support, and resettlement for the Son La Hydropower Project.

5. The main investor shall temporarily advance capital to contractors according to current regulations on project management and construction cost control.

6. The Chairmen of the People's Committees of Son La, Dien Bien, and Lai Chau Provinces shall be responsible for using the resettlement capital effectively and for its intended purpose, without using it to settle accounts for components funded from other sources.

Chapter 4.

SPECIAL MANAGEMENT AND IMPLEMENTATION MECHANISMS FOR PROJECTS OF TRANSPORTATION WORKS TO AVOID FLOODING

Article 17. Scope and scale

1. The Ministry of Transport shall implement the project of transportation works to avoid flooding including: Pu On Bridge, Hang Tom Bridge, and sections of roads to avoid flooding on National Highway 279 and National Highway 12.

2. Transportation works to avoid flooding shall be designed and constructed according to standards suitable for long-term development directions in the overall transportation planning of Northwest region. The construction plans and schedules for transportation works to avoid flooding shall be consistent with the total construction schedule specified in Article 7 of this Decision.

Article 18. Capital source

1. Vietnam Electricity Corporation shall be responsible for raising sufficient 1,013.24 billion VND to transfer to the Ministry of Transport for the construction of Pu On Bridge and transportation works to avoid flooding for the Son La Hydropower Project.

2. Capital from the state budget allocated to increase the scale of the works from the current level to the long-term scale shall be announced annually by the Ministry of Planning and Investment.

3. The Ministry of Finance shall guide the main investors and related units in transferring capital and settling accounts annually.

Chapter 5.

RESPONSIBILITIES OF MINISTRIES, SECTORS, LOCAL AUTHORITIES, AND RELATED PARTIES

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

Implement all contents regarding the responsibilities of the Steering Committee and the responsibilities of relevant ministries, sectors, and localities as stipulated in 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 and Decision No. 677/QĐ-TTg dated June 18, 2004, of the Government promulgating the operational regulations of the State Steering Committee for the Son La Hydropower Project.

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

Chapter 6.

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, Members of the Board of Directors, General Directors of Vietnam Electricity Corporation, Song Da Corporation, and related units shall be responsible for implementing this mechanism.

Article 22. During the implementation of this mechanism, if there are any difficulties, the Ministry of Industry and Trade will compile the opinions of ministries, sectors, and localities; propose contents that need to be supplemented or amended for submission to the Prime Minister for consideration and decision./.