THE GOVERNMENT

DECREES:

Article 1.- To amend and supplement a number of articles of the Investment and Construction Management Regulation promulgated together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999 and Decree No. 12/2000/ND-CP of May 5, 2000 (hereinafter abbreviated to ND 52/CP and ND 12/CP) as follows:

1. Point e, Clause 2, Article 3, ND 52/CP, is amended and supplemented as follows:

quot;e) For investment projects of foreign-based Vietnamese representations; classified security and/or defense projects; copyright purchase projects, the elaboration of investment projects shall comply with the provisions in Clause (11) of Article 1 of this Decree (except contents not suitable to the projects’ nature); the appraisal of projects, the investment decision and the project execution management shall comply with separate decisions of the Prime Minister on the basis of proposals and recommendations of the agencies having the projects.quot;

2. Point 2, Clause 1, Article 1 of ND 12/CP is amended and supplemented as follows:

quot;2. For group-A projects comprising many constituent projects or mini-projects, if each constituent project or mini-project can be operated independently, exploited or implemented according to investment phases inscribed in the documents approving the pre-feasibility study reports or documents deciding on investment undertaking of competent authorities, such constituent project or mini- project shall be implemented from the stage of investment preparation and management of the investment implementation process as an independent investment project.quot;

3. Article 8 of ND 52/CP is amended and supplemented as follows:

quot;Article 8.- Management of planning projects.

1. The Planning and Investment Ministry is the agency performing the State management over the master plannings on regional or inter-provincial socio-economic development nationwide, having the responsibility:

a) To guide the contents, the process of elaboration, appraisal and management of projects on socio-economic development master planning; branch-development plannings.

b) To organize the elaboration of master planning projects on socio-economic development in key regions, inter-provincial areas and submit them to the Prime Minister for approval.

c) To appraise projects on socio-economic development master planning of localities, elaborated by People’s Committees of provinces or centrally-run cities (hereinafter called the provincial level) according to decentralization; the branch development plannings elaborated by branch-managing ministries and submitted to the Prime Minister for approval.

The appraisal contents shall include:

- The planning’s compatibility with the socio-economic development strategy;

- The planning’s compatibility with the distribution of resources;

- The uniformity of regional, territorial socio-economic development plannings, branch development plannings, construction plannings;

- The planning’s feasibility.

2. The Ministry of Construction is the agency performing the State management over the urban and rural construction plannings, key region construction plannings, having the responsibility:

a) To guide the contents, order of elaboration, appraisal and management of urban and rural construction as well as key region construction plannings.

b) To organize the elaboration of planning projects on construction of key regions and submit them to the Prime Minister for approval.

c) To appraise according to decentralization the urban and rural construction planning projects elaborated by provincial-level People’s Committees and submit them to the Prime Minister for approval.

The appraisal contents shall include:

- The construction planning’s compatibility with socio-economic development strategies, long-term construction plannings;

- The construction planning’s compatibility with population distribution;

- The uniformity of construction plannings with socio-economic, territorial development plannings, branch development plannings;

- The planning’s feasibility and measures to manage the construction planning.

3. The provincial-level People’s Committees shall draw up master plannings on socio-economic development, master plannings on urban space development and population clusters; plannings on development of urban centers and industrial zones in their respective provinces, approve and submit them for approval to serve as basis for elaboration of investment projects.

4. The branch-managing ministries shall organize the elaboration of branch development plannings.

5. The Finance Ministry shall guide the advance and payment of expenditures for elaboration and appraisal of planning projects.

6. The projects on master plannings for socio-economic development, branch development planning, urban and rural development planning, when being studied for elaboration of the projects, must be widely commented by the concerned ministries, branches and localities. When studying the elaboration of projects on urban and rural development plannings, the project-elaborating agencies must publicize them for comments by people and People’s Councils in the planning areas. The projects on construction plannings (both master plannings and detailed plannings), which have already been approved by competent authorities, must be publicly and constantly posted up at the offices of the People’s Committees at all levels as well as public places in the planning areas for implementation and supervision of the implementation thereof by people.

7. The Ministry of Planning and Investment and the Ministry of Construction shall scrutinize (according to their respective functions) legal documents on socio-economic development plannings; branch development plannings; and construction plannings, for promulgation or submission to competent authorities for promulgation.quot;

4. Clause 2, Article 10, ND 52/CP, is amended and supplemented as follows:

quot;2. Competence to decide investment in State budget-funded projects:

a) The Prime Minister shall decide investment in important national projects with investment undertaking having been decided by the National Assembly. The State Council for Appraisal of Investment Projects shall organize the appraisal of projects and submit them to the Prime Minister for decision on the investment therein.

b) The ministers, the heads of ministerial-level agencies, agencies attached to the Government, the financial management agencies of the Party Central Committee, or of the central bodies of socio-political organizations ( defined in the State Budget Law) and the presidents of the provincial-level People’s Committees shall decide the investment in group A-projects already included in socio-economic development plannings or branch development plannings, already approved or decided in writing in terms of investment undertaking by competent authorities, after obtaining the Prime Minister’s permission for investment.

Persons competent to decide the investment in group-A projects shall organize the examination of feasibility study reports and have to gather written comments of the branch-managing ministries, the Ministry of Planning and Investment, the Ministry of Construction (for construction investment projects), the Finance Ministry and the concerned ministries, branches and localities involved in the projects and report them to the Prime Minister for investment permission. Within 15 working days as from the date of receiving full dossiers, the ministries, branches and localities, which have been asked to give their comments, must give their written replies.

Where group-A projects are financed by local budgets, they must be put up before the concerned People’s Councils for discussion and decision, and be publicized.

The reports applying for investment permission shall include the following contents:

- The projects’ compatibility with the socio-economic development plannings, branch-development plannings and construction plannings, which have already been approved by competent authorities;

- The regimes of exploiting and using national resources; technological schemes;

- The projects’ financial capability;

- Preferences and supports given to the projects by the State;

- The efficiency of investment in the projects;

- The project execution duration.

- The environmental and ecological impacts, fire and explosion prevention and fighting, safety, resettlement, security and defense.

The reports of applying for investment permission shall be enclosed with the written comments of the concerned ministries, branches and localities.

Where group A-projects are not yet included in socio-economic development plannings, branch-development plannings or construction plannings or not yet decided in writing in term of investment undertaking by competent authorities, before the feasibility study reports are made, they must be considered by the Prime Minister who shall also adopt the feasibility study reports and permit the investment.

The ministers, the heads of ministerial-level agencies, agencies attached to the Government, financial management bodies of the Party Central Committee or of the central bodies of socio-political organizations (defined in the State Budget Law) and the presidents of provincial-level People’s Committees shall decide on the investment or authorize the decision on investment in group-B and -C projects in accordance with the approved plannings.

For group-B projects not yet included in the approved plannings, before the feasibility study reports are made, they must be consented in writing by persons competent to approve the plannings.

Particularly for group-C projects, the investment-deciding agencies must ensure the investment capital balance for project implementation within no more than 2 years.

c) Depending on the practical conditions of ministries, branches and localities, the persons competent to decide the investment are allowed to authorize subjects defined at Point d of this Clause to decide on investment in group-B and-C projects. The authorizing persons must bear responsibility before law for their authorization. The authorized persons shall be held responsible before law and the authorizing persons for their decisions.

d) Subjects authorized to decide on investment:

- For the ministerial level:

General department directors, department directors, chairmen of the Managing Boards of Corporations, directors of State enterprises, heads of agencies attached to ministries; commanders of Military Zones, Corps, Services, Border guard and equivalent titles under the Defense Ministry.

- For the provincial level:

Directors of provincial Services, presidents of People’s Committees of urban districts, rural districts, provincial capitals or cities (hereinafter called the district level), chairmen of the Managing Boards of Corporations, directors of State enterprises, heads of agencies attached to the provincial-level People’s Committees.

e) Presidents of the district- or commune-level People’s Committees are allowed to decide on investment in projects within their respective local budgets (including amounts supplemented from superior budgets) with the investment capitalized at below VND three billion (for the district level) or under VND one billion (for the commune level), depending on the practical conditions of each locality, which are specified by the provincial-level People’s Committee on the basis of socio-economic development plannings and plans of the locality, already approved by competent authorities and on the implementation capabilities of the decentralized subjects.

Before deciding on the investment, the district- or commune-level People’s Committees shall have to gather comments of capable professional organizations (including consultancy organizations) to appraise the projects. The project execution management must strictly comply with law provisions.

For State budget-invested commune-level projects on construction of technical and social infrastructure works, when being adopted by the commune-level People’s Councils, they must be approved in term of investment objects and planning by the district-level People’s Committees. If they are invested with sources of capital contributed by people, the commune-level People’s Committees shall have to organize the investment and construction according to the Regulation on mobilization, management and use of amounts voluntarily contributed by people for the construction of infrastructures of the communes or district townships, issued together with the Government’s Decree No.24/1999/ND-CP of April 16, 1999.

f) Persons competent to decide the investment must not use sources of non-business capital for investment in new construction. For renovation or expansion, if using the source of non-business capital with the level of VND one billion or more for investment, they must carry out procedures for investment preparation and investment implementation under the provisions of this Decree.quot;

5. Point 2, Clause 5, Article 1 of ND 12/CP is amended and supplemented as follows:

The competence to decide the investment in projects financed with the State’s development investment credit capital or State-guaranteed credit capital:

quot;2. The Prime Minister shall decide the investment in important national projects decided by the National Assembly in terms of investment undertaking. The State Council for Appraisal of Investment Projects shall organize the appraisal of projects and submit them to the Prime Minister for investment decision..

Group-A, -B or -C projects invested by enterprises shall be appraised and decided in terms of investment by the enterprises themselves according to regulations, which shall take responsibility before law therefor; Group-A and-B investment projects must ensure their compatibility with the approved plannings; Group-A investment projects, before being decided in terms of investment, must be permitted for investment by the Prime Minister. The contents of the reports applying for investment permission shall be the same as prescribed in Clause (4), Article 1 of this Decree (except for written comments of the concerned ministries, branches and localities).

The branch-managing ministries and provincial-level People’s Committees shall organize the examination of group-A projects’ feasibility study reports of enterprises under their management and have to gather written comments of the Ministry of Planning and Investment, the Ministry of Construction (for construction investment projects), the Finance Ministry and concerned ministries, branches as well as localities involved in the projects, for sum-up reports to the Prime Minister for investment permission. The to be-examined contents of the projects’ feasibility study reports are those which the investors must apply for investment permission mentioned in Clause (4), Article 1 of this Decree. Within 15 working days as from the date of receiving complete dossiers, the ministries, branches or localities, which are asked to give their comments, must give their written replies.

Where investment projects of Group A or Group B are not yet included in the approved plannings, the provisions at Point b, Clause (4), Article 1 of this Decree shall be complied with.

Depending on the specific conditions of enterprises, the persons competent to decide the investment may authorize directors of affiliated units to decide on the investment in Group B or C projects. The authorizing persons must hear responsibility before law for their authorization. The authorized persons must be held responsible for their decisions before law and the authorizing persons.quot;

6. Point 1, Clause 6 and Points 1 and 3 of Clause 7, Article 1 of ND 12/CP are amended and supplemented as follows:

The competence to decide investment in projects financed with development investment capital of enterprises and capital or other sources:

quot;1. The Prime Minister shall decide the investment in important national projects decided by the National Assembly in terms of investment undertaking. The State Council for Appraisal of Investment Projects shall organize the appraisal of projects and submit them to the Prime Minister for investment decision.

Group -A, -B, -C projects invested by enterprises (regardless of economic sectors) shall be appraised and decided in terms of investment by the enterprises themselves according to regulations, which shall bear responsibility before law therefor; the investment projects must ensure their compatibility with the approved plannings; group-A investment projects, before the investment therein is decided, must be permitted for investment by the Prime Minister or by ministers or provincial-level People’s Committee presidents under the Prime Minister’s authorization.

The branch-managing ministries and the provincial-level People’s Committees shall organize the examination of group-A projects’ feasibility study reports of enterprises under their respective management and have to gather written comments of the Ministry of Planning and Investment, the Ministry of Construction (for construction investment projects), the Finance Ministry as well as the concerned ministries, branches and localities involved in the projects, for sum-up reports to the Prime Minister for investment permission. The to be-examined contents of the projects’ feasibility study reports are those which investors must apply for investment permission, mentioned in Clause 4, Article 1 of this Decree (except for contents on technological options, financial capability, investment efficiency of the projects and the written comments of the concerned ministries, branches and/or localities). Within 15 working days as from the date of receiving full dossiers, the ministries, branches and/or localities, which are asked to give their comments, shall have to give their written replies.

Where Group-A or -B projects are not yet included in the approved plannings, the provisions at Point b, Clause (4) of Article 1 of this Decree shall be complied with.

3. For projects financed with capital from different sources, the investors shall have to separate project items or work portions for separate arrangement with each type of capital to such items and work portions, and manage those items and work portions according to regulations prescribed for the types of already allocated capital sources.

For projects financed with capital from various sources, whose items and work portions cannot be separated, such projects must be managed according to the regulations prescribed for capital sources accounting for the largest percentage in the total investment level of the projects.

For projects with capital contributed by many members, depending on the capital contribution ratios and characteristics of the projects, the members shall negotiate and determine modes of management and organize the project administration.quot;

7. Article 14 of ND 52/CP is supplemented with Clause 3 as follows:

quot;3. In bid assignment and acceptance, pre-acceptance tests and investment capital settlement, the investors are strictly forbidden to commit acts of harassing for bribes, taking bribes from contractors.

In the bidding dossiers, the investors are strictly forbidden to prescribe contents in order to create unfair competition between contractors; are strictly forbidden to arrange bids and impose conditions against regulations for self-seeking purposes.

The investors shall directly manage the project implementation and the project management boards shall have to efficiently use the investment capital; fully observe the regulations on financial management; pay material compensations if causing waste of investment capital of the State or enterprises and be examined for penal liability as provided for by law.

The project management boards are the organizations which perform the functions and responsibilities of investors, having the task to directly manage the project implementation and taking responsibility before law and the investors.quot;

8. Article 15 of ND 52/CP is amended in its Clause 3 and added with Clause 4 as follows:

quot;3. Responsibilities of construction and investment consultancy organizations:

a) The construction and investment consultancy organizations, when conducting business activities, must fully meet the conditions and capabilities prescribed by the Ministry of Construction.

b) To take responsibility before law and investors for the contents already committed in the contracts, particularly the technical and economic contents determined in their counseling products and must pay compensations for the caused damage.

c) The consultancy organizations must buy professional liability insurance. The insurance premiums shall be calculated into counseling products. The purchase of professional liability insurance constitutes a legal condition in construction and investment consultancy activities.

d) Projects financed with State budget capital, State-guaranteed credit capital, and/or development investment credit capital of the State, which require the hiring of foreign consultants, the hired foreign consultancy organizations and/or consultants must enter into partnership with Vietnamese consultants for implementation thereof (except for cases permitted by the Prime Minister). Domestic consultants are allowed to enter into partnership or cooperation with, or hire, foreign consultancy organizations and/or consultants in construction and investment consultancy activities.

e) In their counseling products, the construction and investment consultancy organizations are strictly forbidden to order the use of types of materials or technical supplies of any production or supply establishment, but are only allowed to give the general requirements on technical properties of the materials or technical supplies.

f) The construction and management consultancy organizations are strictly forbidden to buy, sell legal person status for participation in bidding, or buy, sell bids or disclose information on bidding to bidders participating in the biddingquot;.

4. The Ministry of Finance shall prescribe the regime of insurance of professional liability for investment and construction consultancy.

9. Clause 2, Article 16 of ND 52/CP is amended and supplemented as follows:

quot;2. Responsibilities of construction enterprises:

a) The construction enterprises, when conducting project construction and installation, must fully meet the conditions and capabilities prescribed by the Construction Ministry.

b) To bear responsibility before law and investors for the contents already committed in the contracts on construction and installation assignment and reception and pay compensations for damage they have caused.

c) The construction enterprises must buy insurance for supplies, equipment and workshops in service of construction, accident insurance for laborers and civil liability insurance for the third person. The insurance premiums shall be calculated into their production costs. The insurance purchase constitutes a legal condition in construction activities of the construction enterprises.

d) The construction enterprises are strictly forbidden to buy, sell legal person status for participation in bidding or arrange, buy or sell bids or collude with investors in bidding.quot;

10. Article 20, ND 52/CP, is amended and supplemented as follows:

quot;Article 20.- Supervision, evaluation of investment:

1. Supervision and evaluation of investment activities of the national economy, branches, domains and localities are called the overall supervision and evaluation of investment. The supervision and evaluation of investment projects permitted or decided for investment by competent persons are called supervision and evaluation of investment projects.

2. The investment supervision and evaluation requirements and contents shall cover:

a) Overall supervision and evaluation of investment; monitoring and evaluation of the investment scale, tempo, structure and efficiency of the economy, branches and localities in each period; monitoring and evaluation of investment implementation under the approved plannings, plans and programs.

b) Supervision and evaluation of the compatibility of the decisions on project investment of ministries, branches and competent authorities with the approved plannings and plans.

c) Supervision and evaluation of project execution by investors according to the contents already approved by competent authorities and the observance of the State’s regulations on investment and construction.

d) Through supervision and evaluation of investment, proposing investment-deciding agencies, investors or relevant agencies to consider and handle arising issues.

3. Organization of investment supervision and evaluation:

a) The Prime Minister shall direct the overall supervision and evaluation of investment and important national projects as well as group-A projects, which are decided or permitted for investment by the Prime Minister.

The Ministry of Planning and Investment shall guide the investment supervision and evaluation nationwide; organize the overall supervision and evaluation of investment and important national projects as well as group A projects, which are decided or permitted for investment by the Prime Minister; sum up the investment supervision and evaluation nationwide and quarterly report thereon to the Prime Minister.

b) The ministries, provinces and centrally-run cities shall organize the overall supervision and evaluation of projects under their respective management; and biannually report thereon to the Prime Minister.

c) The investors, the Project Management Boards shall have the tasks to supervise and evaluate investment projects according to regulations; and make quarterly sum-up reports to the investment-deciding authorities on the investment projects (capital, tempo, bidding, quality) and propose remedial solutions.

d) Competent authorities are not allowed to adjust investment for projects which fail to implement the investment supervision and evaluation according to regulations.

e) Expenses for investment supervision and evaluation shall be guided jointly by the Finance Ministry and the Ministry of Planning and Investment.

The Ministry of Planning and Investment shall guide in detail the prescribed contents on investment supervision and evaluation.quot;

11. To cancel Clause 9, Article 1 of ND 12/CP; to amend and supplement Article 22 of ND 52/CP as follows:

quot;Article 22.- Elaboration of investment projects

1. The investors must hire consultancy organizations having the legal person status and full capabilities to satisfy the project requirements to elaborate pre-feasibility study reports, feasibility study reports or investment reports and take responsibility for the required contents in the pre-feasibility study reports, feasibility reports or investment reports.

For a number of fully capable investors, if they make pre-feasibility study reports, feasibility reports or investment reports by themselves, they must obtain decisions of the persons competent to decide the investment, assigning the tasks of project elaboration.

2. Group-A projects already included in the approved plannings or already given decisions on investment undertaking by competent authorities shall not be subject to the elaboration of pre-feasibility study reports, but must have the feasibility reports.

Where group-A projects are not yet included in the approved plannings or nor given decisions on investment undertaking by competent authorities, the investors must make and submit the pre-feasibility study reports to the Prime Minister for consideration and adoption.

For group-B projects, the investors shall organize the elaboration of feasibility study reports; if deeming it necessary to make pre-feasibility reports, the persons competent to decide the investment shall consider and decide.

3. The following projects shall not be liable to feasibility study reports, but only to investment, designing and cost-estimation reports:

a) Projects with small amounts of investment capital (under VND 3 billion), projects on repair, maintenance to be funded with non-business capital.

b) Small-sized social infrastructure projects (group-C projects) financed with budget capital (not for commercial purposes), compatible with socio-economic development plannings and plans and decided in term of investment undertaking by competent authorities.

4. Projects on procurement of separate machinery or equipment do not require the elaboration of feasibility study reports but only investment and cost-estimation reports.quot;

12. Clause 6, Article 26 of ND 52/CP, is amended and supplemented as follows:

quot;6. Competence to appraise investment projects:

Persons competent to decide investment shall organize the appraisal of feasibility study reports according to the contents prescribed in Article 27 of ND 52/CP.

For projects funded with credit capital, the capital-borrowing organizations shall appraise the financial schemes and debt repayment schemes for approval or non-approval of loans before the competent persons decide the investment.

The persons competent to decide the investment shall use their fully capable professional agencies to organize the appraisal of feasibility study reports and may invite professional agencies of other relevant ministries and/or branches to appraise the projects. Particularly for State budget-financed projects under the provincial management, the provincial-level People’s Committees shall assign the provincial-level Services of Planning and Investment to act as coordinator in organizing the project appraisal, which shall have to gather opinions of the Finance Services, the Construction Services (for construction investment projects) and the agencies involved in project appraisal contents.quot;

13. Article 28 of ND 52/CP is amended and supplemented as follows:

quot;The State Council for Appraisal of Investment Projects is set up under the Prime Minister’s decision to appraise or re-appraise the following projects:

1. Big and important investment projects before the Government submit them to the National Assembly for adoption and decision on investment undertaking.

2. Investment projects having already gone through the appraisal process, but the Prime Minister deems it necessary to re-appraise them.

3. Investment projects and planning projects at the request of the Prime Minister.

The Minister of Planning and Investment shall act as chairman of the State Council for Appraisal of Investment Projects.quot;

14. To cancel Clause 12, Article 1 of ND 12/CP; to amend and supplement Point 3.1, Clause 3, Article 38 of ND 52/CP, as follows:

Competence to approve technical designs and total cost estimates:

quot;3.1. For construction and investment projects financed with State budget capital, State-guaranteed credit capital, development investment credit capital of enterprises:

a) The technical designs and total cost estimates of important national projects with investment therein decided by the Prime Minister, or group-A projects financed with State budget capital shall be approved by ministers, heads of the ministerial-level agencies, heads of agencies attached to the Government, presidents of provincial-level People’s Committees having investment projects or persons competent to decide the investment, after obtaining the appraisal opinions of the Construction Ministry.

Particularly, specialized construction works under group-A projects financed with State budget capital shall comply with the stipulation: irrigation, agricultural and forestrial construction projects shall be assigned to the Ministry of Agriculture and Rural Development; the traffic construction projects shall be assigned to the Ministry of Communications and Transport; mine, power-plant, power transmission line or transformer station-construction projects, assigned to the Ministry of Industry; post and telecommunications construction projects largely involving specialized technologies, assigned to the Ministry of Post and Telecommunications; security, defense and national secret protection projects, assigned to the Ministry of Defense, the Ministry of Public Security, to assume the prime responsibility in appraisal and approval of technical designs and total cost estimates.

For group-A projects financed with State-guaranteed credit capital, development investment credit capital of the State and investment projects on procurement of equipment and facilities with particular professional requirements, the ministries, branches or localities shall organize by themselves the appraisal of technical designs and total cost estimates before they are submitted to competent authorities for approval.

The agencies assuming the prime responsibility in appraising the technical designs and total cost estimates must be held responsible before law for the contents of their appraisal.

b) For group B- or C- construction investment projects managed by ministries, branches or central agencies, the persons competent to decide the project investment shall approve the technical designs and total cost estimates, after they are appraised by professional agencies with the construction management function of the level competent to decide the investment.

For group-B or -C construction investment projects managed by localities, the presidents of the provincial-level People’s Committees shall approve the technical designs and total cost estimates after they are appraised by the provincial municipal Construction Services or Services involved in specialized construction (depending on the nature of the projects).

For Group-A, -B or -C construction investment projects of enterprises, the enterprises shall organize the appraisal by themselves and the persons competent to decide the investment shall approve the technical designs and total cost estimates.

c) The persons competent to approve the technical designs and total cost estimates, defined at Items a and b of this Point may authorize the heads of the immediate subordinate units to approve the technical designs and total cost estimates but must bear responsibility before law for such authorization. The authorized persons shall be held responsible before law and the authorizing persons for their decisions.

d) For construction investment projects carrying out the technical designs and construction drawing designs (detailed designs), depending on the technical complexity of project items and the qualifications and professional apparatus of investors, the persons competent to approve the technical designs and total cost estimates may authorize the investors to approve the detailed designs and cost estimates of project items in line with the approved technical designs and total cost estimates.

Where there appear changes in the approved technical designs and total cost estimates upon making the detailed designs and cost estimates of project items, the investors must submit them to the competent authorities for consideration and approval.

In the course of construction, investors shall be allowed to change the designs and/or cost estimates only after such is examined and permitted by the persons competent to decide the investment. In case of real necessity to promptly handle the design changes, the investors are allowed to decide and take responsibility before law and the persons competent to decide the investment therefor.quot;

15. Clause 5, Article 45 of ND 52/CP, is amended, supplemented as follows:

quot;5. For projects financed with State budget capital, State-guaranteed credit capital, development investment credit capital of the State or development investment capital of State enterprises, before starting the construction thereof, there must be the designs and cost estimates approved by competent authorities; the situation of making designs while conducting the construction is strictly forbidden.

For Group-A projects with their technical designs and total cost estimates not yet approved but needing to start their construction, there must be designs and cost estimates of projects items, already approved by competent persons, and lawful contracts on construction. Immediately after the achievement of 30% of the total investment at the latest, the technical designs and total cost estimates approved by competent persons must be available.

The Ministry of Construction shall have to inspect the implementation of the contents defined in this clause and to handle or propose the competent agencies to handle cases of deliberate non-implementation thereofquot;.

16. Clause 3, Article 47, ND 52/CP, is amended, supplemented as follows:

quot;3. The Prime Minister shall decide to set up the State Council for Pre-Acceptance Test of Construction Works. The State Council shall have the responsibility to inspect the work of pre-acceptance tests by investors and directly conduct pre-acceptance tests of works of Group-A projects, national important projects when deeming it necessary and other works at the Prime Minister’s request.

- The head of the State Council for Pre-Acceptance Test shall be the Minister of Construction.

- The organizational structure, tasks, powers and responsibilities of the State Council for Pre-Acceptance Test shall be defined by the Prime Minister.quot;

17. Article 49 of ND 52/CP shall have Clauses 1, 6, 8, 9 and 12 amended, and Clause 13 added, as follows:

quot;1. For construction and installation projects or bidding packages effected in form of appointment of contractors, the investment capital payment shall be based on completed work volumes tested and accepted according to stages or value of the volume tested and accepted monthly under the signed contracts.

6. The investors and the capital-allocating or- lending agencies shall have to consider and create conditions by satisfying necessary demands for capital advanced to a number of structures and semi-finished products in construction with great value, which must be manufactured in advance in order to ensure the investment tempo, and a number of supplies of special types, supplies which must be reserved according to seasons, and a number of work contents arising in the course of investment implementation.

8. In the year when the construction is completed or project items or projects are put into exploitation, the volumes of construction and installation of project items or projects of that year shall be fully paid when the contractors make all settlements with the investors; for foreign contractors, the temporary seize and payment of capital shall comply with international practices.

Annually, the capital-allocating or - lending agencies shall temporarily withhold 5% of the total planned investment capital amounts of the projects and notify the full amounts after the investors meet the deadlines for settlement of investment capital as provided for in Clause 18, Article 1 of this Decree in the plan year.

9. The payment of investment capital for bidding packages of construction and installation opened to bid shall comply with the tempo of implementing the bidding packages inscribed in the bid assignment and acceptance contracts and the values of the signed contracts (for package contracts) or shall be made according to bid-winning unit prices and specific conditions inscribed in the contracts.

After the completion of construction, the settlement of the bidding packages must not exceed the total cost estimates and the total investment levels, which have been approved by the persons competent to decide the investment.

Payment time limits: Within 10 working days as from the dates the contractors fully submit the settlement papers, the investors must make payment for the completed work volumes to the contractors. Basing themselves on the payment-requesting dossiers of the investors, the capital-allocating or-lending agencies shall, within 7 working days as from the dates of receiving complete and valid dossiers, have to make the payments according to the payment modes prescribed in this Clause and the unamended contents prescribed in Article 49 of ND 52/CP.

12. For the sources of non-business capital invested in construction and a number of particular works, the payment and advance of investment capital shall be guided in detail by the Ministry of Finance.

13. For bidding packages or projects implemented under EPC contracts, the advance for equipment procurement shall be based on the payment tempo of the supply contracts. For other jobs, the advance level shall be equal to 15% of the value of the bidding packages, but must not exceed the annual capital plan of the bidding packages.quot;

18. Clause 2, Article 56 of ND 52/CP, is amended and supplemented as follows:

quot;2. Time limits for settlement of investment capital:

a) For national important projects, after the projects are put into operation, within 12 months at most, the investors must complete the reports on investment capital settlement and submit them to the competent persons for approval.

b) For Group-A projects, after the projects are put into operation, within 9 months at most, the investors must complete the reports on investment capital settlement and submit them to the competent persons for approval.

c) For Group-B or -C projects, after the projects are completed and put into exploitation and use, within 6 months at most, the investors must complete the reports on investment capital settlement and submit them to the competent persons for approval.

d) For projects with items being possibly put into separate exploitation and use, after the items are completed and handed over to the investors, within no more than 3 months, the investors must complete the reports on settlement of project items and submit them to the competent persons for approval.quot;

19. Article 57 of ND 52/CP is amended and supplemented as follows:

quot;For investment projects financed with State budget capital, State-guaranteed credit capital, development investment credit capital of the State, the investment capital settlement must be examined and approved according to the regulations:

1. Examination of investment capital settlement

Before the investment capital settlement is approved, all settlement reports must be examined. The persons competent to approve the settlements shall decide to organize the examination of settlements according to the regulations:

a) Hiring independent auditing organizations operating in Vietnam to audit the settlement reports. Where the persons competent to approve the settlements can organize the examination by themselves, the examination must be performed by fully capable professional agencies.

b) Responsibility to examine settlements:

- The capital-allocating or-lending and paying agencies shall have to certify the capital amounts already allocated, lent and paid to the projects.

- The auditing organizations and the professional agencies performing the examination of settlement reports must bear responsibility before law for the results of the settlement report examination.

2. Approval of investment capital settlement:

a) The Finance Minister shall approve the settlement of investment capital of projects with the investment therein decided by the Prime Minister and Group-A projects financed with the State budget capital.

b) For the remaining projects, the persons competent to decide the investment shall also be the approvers of investment capital settlement.

3. The expenses for examination and approval of investment capital settlement shall be calculated into the approved total estimates.

The Finance Ministry shall guide the contents of examination of settlement reports, management and use of charges for examination and approval of investment capital settlement.quot;

20. Article 60 of ND 52/CP is amended and supplemented as follows:

quot;1. The form of investors’ direct management of project execution shall apply to investors fully satisfying the professional and specialized qualifications compatible with the investment projects.

2. For construction investment projects financed with the State budget capital, when applying the form of investors’ direct management of project execution, the investors must set up the project management boards fully satisfying the conditions on professional capability as prescribed by the Ministry of Construction.quot;

21. Article 62 of ND 52/CP is amended and supplemented as follows:

quot;The turn-key form prescribed in this Decree is the form of managing the project execution after the investment decisions have been issued to the projects. On the basis of feasibility study reports approved by competent authorities, the investors shall select contractors and assign them to perform the general contracts covering from the survey for design, procurement of supplies, equipment, construction and installation to the time the projects are completed and handed over to the investors through EPC contracts.

EPC contracts may apply to projects or mini-projects (constituent projects) or bidding packages.

The contents of EPC contract shall comply with the guidance of the Construction Ministry.

2. When performing EPC contracts on projects financed with State budget capital, the investors shall have to set up the project management boards fully satisfying the conditions on capability as provided for by the Construction Ministry.

3. The investors shall have to hire consultants to supervise the process of performing the EPC contracts and organize the pre-acceptance test of contractual works according to regulations.

4. For investors that have no conditions to directly manage the project execution, the application of turn-key form through EPC contracts shall be encouraged; upon the application, the contractors fully capable of organizing the project execution must be selected on the basis of ensuring the quality, tempo, reasonable prices and requirements set by the investors in the EPC contracts.quot;

22. Point 1, Clause 16, Article 1 of ND 12/CP, is amended and supplemented as follows:

quot;1. The form of self-execution of projects shall apply only in the following cases:

a) The investors are enterprises having registration for production and construction suitable to the requirements of the projects, regardless of investment capital sources.

b) The investors are fully capable of conducting activities of production and construction suitable to the requirements of the projects on afforestation, perennial tree planting (including new planting and tending annual trees), projects on aquaculture (of the agricultural, forestrial, water resource and industrial sectors); projects on plant varieties and animal breeds, reclamation of virgin land for field construction; projects on investment in pit building, coal and ore mining, regular maintenance and repair of construction works, manufacturing equipment; projects on construction of detention camps.quot;

Article 2.- Handling of unfinished investment projects:

quot;The investment projects approved before this Decree takes effect but not yet being implemented or being left unfinished, the contents of the subsequent jobs at the stage of investment implementation shall comply with the provisions of this Decree, without having to resubmit the projects for approval.quot;

Article 3.- The contents on construction and investment management in a number of provisions of ND 52/CP and ND 12/CP, which are contrary to the amended and supplemented contents prescribed in this Decree, are all hereby annulled.

Article 4.- The Ministry of Construction, the Ministry of Planning and Investment and the Finance Ministry shall assume the prime responsibility (according to their respective assigned functions) and coordinate with the concerned ministries and branches in guiding and supervising the implementation of this Decree.

Biannually and annually, the ministries, branches, localities and State corporations shall have to sum up the situation of investment and construction implementation by their respective agencies and units and report to the Ministry of Construction, the Ministry of Planning and Investment and the Ministry of Finance for sum-up reports to the Prime Minister.

Article 5.- This Decree takes effect 15 days after it is published on the Official Gazette.

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces and centrally-run cities, chairmen of the Managing Boards of State enterprises and relevant organizations shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI