Decision No. 30/2006/QD-BCN on the issuance of regulations on the management of investment in construction of independent power projects

Pursuant to …;

REGARDING THE ISSUANCE OF REGULATIONS ON THE MANAGEMENT OF INVESTMENT AND CONSTRUCTION OF INDEPENDENT POWER PROJECTS

_______________________________________

MINISTER OF INDUSTRY

BASED ON DECREE NO. 55/2003/NĐ-CP OF MAY 28, 2003 OF THE GOVERNMENT ON THE FUNCTIONS, TASKS, POWERS, AND ORGANIZATIONAL STRUCTURE OF THE MINISTRY OF INDUSTRY;

Pursuant to the Electricity Law dated December 3, 2004;

BASED ON DECREE NO. 105/2005/NĐ-CP OF AUGUST 17, 2005 OF THE GOVERNMENT PROVIDING GUIDELINES FOR IMPLEMENTATION OF CERTAIN PROVISIONS OF THE ELECTRICITY LAW;

BASED ON THE PROVISIONS OF LAWS ON INVESTMENT, CONSTRUCTION, AND BIDDING;

AT THE SUGGESTION OF THE DIRECTOR OF THE ENERGY AND OIL DEPARTMENT,

DECISION:

Article 1. ATTACHED TO THIS DECISION ARE THE REGULATIONS ON THE MANAGEMENT OF INVESTMENT AND CONSTRUCTION OF INDEPENDENT POWER PROJECTS.

Article 2. THIS DECISION SHALL TAKE EFFECT 15 DAYS AFTER ITS PUBLICATION IN THE OFFICIAL GAZETTE AND SHALL REPLACE DECISION NO. 50/2002/QĐ-BCN OF NOVEMBER 25, 2002 OF THE MINISTER OF INDUSTRY ON THE MANAGEMENT OF INVESTMENT AND CONSTRUCTION OF INDEPENDENT POWER PROJECTS.

Article 3. MINISTRIES, MINISTERIAL LEVEL AGENCIES, GOVERNMENT AGENCIES, PEOPLE'S COMMITTEES OF PROVINCES AND MUNICIPALITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT, HEADS OF ORGANIZATIONS AND UNITS, AND INDIVIDUALS RELATED TO THIS DECISION SHALL BE RESPONSIBLE FOR ITS IMPLEMENTATION./.

REGULATIONS

ON THE MANAGEMENT OF INVESTMENT AND CONSTRUCTION OF INDEPENDENT POWER PROJECTS

(ISSUED ACCOMPANYING DECISION NO. 30/2006/QĐ-BCN OF AUGUST 31, 2006

OF THE MINISTER OF INDUSTRY)

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. THIS DOCUMENT REGULATES THE SELECTION OF INVESTORS, PREPARATION OF INVESTMENT PROJECTS, REVIEW AND APPROVAL OF INVESTMENT PROJECTS, IMPLEMENTATION OF INVESTMENT PROJECTS, AND INVESTMENT MANAGEMENT FOR INDEPENDENT POWER PROJECTS.

2. THESE REGULATIONS APPLY TO ORGANIZATIONS AND INDIVIDUALS PARTICIPATING IN THE INVESTMENT AND CONSTRUCTION OF INDEPENDENT POWER PROJECTS.

ARTICLE 2. INDEPENDENT POWER PROJECTS

1. AN INDEPENDENT POWER PROJECT (IPP) IS AN INVESTMENT PROJECT FOR THE CONSTRUCTION OF POWER GENERATION SOURCES THAT DO NOT USE GOVERNMENT FUNDS FOR INVESTMENT, OPERATION, AND SALE OF ELECTRICITY AS PROVIDED BY THE ELECTRICITY LAW.

2. INDEPENDENT POWER PROJECTS CAN BE INVESTED THROUGH BUILD-OPERATE-TRANSFER (BOT), BUILD-OWN-OPERATE (BOO), OR OTHER FORMS AS PROVIDED BY LAW.

ARTICLE 3. INVESTMENT IN INDEPENDENT POWER PROJECTS

1. THE CONSTRUCTION OF INDEPENDENT POWER PROJECTS MUST BE CONSISTENT WITH THE ELECTRICITY DEVELOPMENT PLAN APPROVED BY THE AUTHORIZED BODY. FOR PROJECTS NOT INCLUDED IN THE PLAN, THEY MUST BE APPROVED BY THE AUTHORIZED BODY PRIOR TO INVESTMENT PREPARATION.

2. THE AUTHORITY TO APPROVE THE ELECTRICITY DEVELOPMENT PLAN IS IMPLEMENTED IN ACCORDANCE WITH THE ELECTRICITY LAW. FOR SMALL HYDROPOWER DEVELOPMENT PLANS, THE MINISTRY OF INDUSTRY APPROVES THE NATIONAL SMALL HYDROPOWER DEVELOPMENT PLAN, AND THE PROVINCIAL PEOPLE'S COMMITTEE APPROVES THE PROVINCIAL SMALL HYDROPOWER DEVELOPMENT PLAN AFTER REACHING AGREEMENT WITH THE MINISTRY OF INDUSTRY.

3. THE STATE MANAGES INDEPENDENT POWER PROJECTS IN TERMS OF POLICY, TIMELINE, AND SCALE OF INVESTMENT IN ACCORDANCE WITH THE LAWS ON INVESTMENT AND CONSTRUCTION.

4. THE AUTHORIZED BODY TO PERMIT INVESTMENT IN INDEPENDENT POWER PROJECTS SHALL IMPLEMENT ACCORDING TO THE LAWS ON INVESTMENT AND CONSTRUCTION MANAGEMENT.

Chapter II

SELECTION OF INVESTORS, PREPARATION OF PROJECTS

AND REVIEW AND APPROVAL OF INVESTMENT PROJECTS

ARTICLE 4. SELECTION OF INVESTORS

1. TO ENSURE THE EFFICIENCY AND SUSTAINABILITY OF THE PROJECT, THE SELECTION OF INVESTORS FOR INDEPENDENT POWER PROJECTS SHALL BE CONDUCTED THROUGH BIDDING. THE PROCEDURE FOR BIDDING SHALL BE IMPLEMENTED IN ACCORDANCE WITH THE LAWS ON BIDDING.

2. AFTER THE ELECTRICITY DEVELOPMENT PLAN HAS BEEN APPROVED, THE MINISTRY OF INDUSTRY SHALL ANNOUNCE THE NATIONAL ELECTRICITY DEVELOPMENT PLAN, THE NATIONAL SMALL AND MEDIUM HYDROPOWER DEVELOPMENT PLAN, AND THE PROVINCIAL PEOPLE'S COMMITTEE SHALL ANNOUNCE THE PROVINCIAL ELECTRICITY DEVELOPMENT PLAN AND THE PROVINCIAL SMALL AND MEDIUM HYDROPOWER DEVELOPMENT PLAN. BASED ON THE LIST OF INVITATIONS FOR INVESTMENT IN INDEPENDENT POWER PROJECTS AND THE APPLICATIONS FOR INVESTMENT FROM DOMESTIC AND FOREIGN ORGANIZATIONS AND INDIVIDUALS, THE AUTHORIZED BODY TO PERMIT INVESTMENT AS PROVIDED IN CLAUSE 4 OF ARTICLE 3 OF THESE REGULATIONS SHALL ORGANIZE BIDDING TO SELECT INVESTORS FOR THE PROJECT AND SUBMIT FOR APPROVAL AS REQUIRED.

3. FOR SPECIAL CASES SUCH AS SMALL-SCALE PROJECTS; PROJECTS AIMED AT SUPPLYING ELECTRICITY TO REMOTE, DIFFICULT, AND EXTREMELY DIFFICULT AREAS; PROJECTS WITH ONLY ONE INVESTOR APPLYING TO PARTICIPATE, OR FOR OTHER REASONABLE REASONS, THE AUTHORIZED BODY TO PERMIT INVESTMENT AS PROVIDED IN CLAUSE 4 OF ARTICLE 3 OF THESE REGULATIONS SHALL DECIDE TO SELECT INVESTORS THROUGH DIRECT ASSIGNMENT.

Article 5. Registration to participate in investment projects

1. Organizations and individuals registering to participate in independent power generation projects must prepare an Investment Report for Group A projects or an Application for Investment Permission Report for Group B and Group C projects to be submitted to the competent authority for permission to conduct research and investment to proceed with investment.

2. The contents of the Investment Report and the Application for Investment Permission Report to be submitted to the investment permission authority include:

a) For Group A projects:

Implement according to the provisions on the content of the Investment Report as stipulated by laws on project management and construction works.

b) For other projects:

- A letter requesting permission to invest from the investor submitted to the competent authority.

- Basic information about the investor: Documents regarding legal status, business registration, organizational structure diagram, key personnel, experience and capability in implementing projects, financial and technical capacity, including a list of projects implemented in the last five years (including industrial and power projects) and the company's final settlement/audit report in the last three years. The investor is responsible for the accuracy of the reported information.

- Preliminary information about the registered project: Construction location; project objectives; main parameters regarding scale, investment capital, operational date, contents related to industry and local planning, expected project implementation schedule, compensation volume, relocation, project investment management, operation, business, and transfer organization (if applicable).

- Approval document for electricity purchase from Vietnam Electricity Corporation or wholesale and retail electricity sellers.

- In cases where projects are not resolved by the province, approval documents from the People's Committee of the province are required.

- Expected sources of funding for the project and commitments for loans from credit institutions and banks.

- The investor's capital must account for at least 30%. In special cases, the competent authority may consider but not less than 20%.

3. The time limit for the authority to respond to investors regarding the Investment Report and the Application for Investment Permission Report is as follows:

a) For Group A projects: Within 30 days, the Ministry of Industry will review and report to the Prime Minister for investment permission.

b) For remaining projects: Within 20 days.

4. After the competent authority grants investment permission, the investor of the independent power generation project may proceed with the work of preparing the investment project according to regulations.

5. The content of the investment project shall be carried out in accordance with the law, including connection to the national power grid, metering and control equipment which shall be implemented according to agreements with Vietnam Electricity Corporation.

Article 6. Review and Approval of Investment Projects

1. The investor prepares and organizes the review, submitting to the competent authority for review of the basic design in accordance with the law.

2. The authority to review the basic design is as follows:

a) The Ministry of Industry: Group A projects and projects with main works located in two provinces or more.

b) The Department of Industry: Remaining Group B and C projects.

3. Within 30 working days (for Group A projects) and 20 days (for Group B and C projects) from the date of receiving complete and valid files, the competent authority as stipulated in Clause 2 of this Article must provide a written opinion on the results of the basic design review of the project and notify the investor.

4. The content of the basic design review, in addition to complying with current regulations, must also review the safety of construction and operation of the works, design solutions, and construction of water reservoir dams (if applicable).

5. The investor organizes the review and approval of the investment project and makes an investment decision based on the results of the basic design review by the competent authority.

Chapter III

IMPLEMENTATION OF INVESTMENT PROJECTS

Article 7. Technical design, total budget estimate

1. The investor shall establish, organize the review, and approve the technical design, construction drawing design, and total budget estimate based on the approved investment project and relevant laws.

2. The investor is only permitted to commence the project when at least the approved technical design for the commencement section has been completed and sufficient funds have been arranged for the project.

Article 8. Implementation of the Project

1. Implementing the investment project must comply with regulations concerning construction permits, contractor selection, construction management, project management forms, contracts, settlement and final accounts as stipulated by law.

2. During implementation, the investor must take appropriate measures to ensure that the project progresses as agreed, be responsible for the safety of the works, and organize construction to ensure the quality of the project.

3. Before putting the project into operation, the investor must apply for an electricity operation permit according to the provisions of the law.

Article 9. Termination of Project Implementation

1. After 18 months for Group A projects, and 12 months for Groups B and C projects from the date the project is permitted to prepare for investment, if the investor does not complete the establishment and approval of the investment project, the competent authority granting permission to invest may issue a document terminating the project to call for another investor to implement the project.

2. After two years from the date the investment project is approved for Group A projects, and one year for other projects, if the investor does not start construction of the works, the competent authority granting permission to invest may issue a document terminating the project to call for another investor to implement the project.

Chapter IV

PROJECT MANAGEMENT FOR INDEPENDENT ELECTRICITY PROJECTS

Article 10. Reporting System

1. After the Investment Report or Investment Project is approved, the investor must submit a complete set of project files (including printed copies on A4 paper and electronic copies on CDs) to the Ministry of Industry and the Provincial Department of Industry for management and monitoring.

2. During the construction period, within the first week of each quarter and the first two weeks of each year, the investor must report on the progress of implementing the project during the quarter and year to the Ministry of Industry and the Provincial Department of Industry.

3. During the operation period of the power plant, the investor must report every six months on the operation status and safety of the works to the Ministry of Industry and the Provincial Department of Industry for monitoring.

4. The Provincial Department of Industry is responsible for compiling reports from independent electricity projects within its jurisdiction to report to the Ministry of Industry within one week after the deadline for reporting by the investor.

Article 11. Inspection and Supervision System

1. The Provincial Department of Industry is responsible for all independent electricity projects within its jurisdiction and must develop an annual supervision and inspection plan to implement it.

2. The Ministry of Industry directs and coordinates with the Provincial Departments of Industry to conduct inspections and supervision of independent electricity projects.

Article 12. Responsibilities of State Management Agencies for Electricity Activities and Electricity Usage

1. Monitor the implementation of the project by the investor.

2. Examine and resolve, within their authority, any recommendations made by the investor regarding issues related to the implementation of the project.

3. Inspect and audit in accordance with the provisions of the law.

Chapter V

IMPLEMENTING PROVISIONS

Article 13. Responsibilities of Organizations and Individuals Investing in Independent Electricity Projects

Organizations and individuals investing in independent electricity projects are responsible for strictly adhering to these Regulations.

Article 14. Implementation Organization

The Energy and Oil Department is responsible for organizing, guiding, and coordinating with the Provincial Departments of Industry under central cities to inspect the implementation of these Regulations.

                            (signed)

        (Signed)


 Hoang Trung Hai