Di GOVERNMENT

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SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness
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Số: 12/2009/NĐ-CP

Hanoi, 10 February 2009 DECREE On Management of Construction Investment Projects (CIPs) _______

GOVERNMENT Pursuant to Law on the Law on the Organization of the Government 32-2001-QH10 dated 25 December 2001; Pursuant to the Law on Construction 11-2003-QH11 dated 26 November 2003; In consideration of Minister for Construction, DECREE: Chapter I GENERAL REGULATIONS Article 1. Scope of application This Decree guides the practice of Law on Construction in terms of setting up, assessment and approval of CIPs; implementation of CIPs; capability of organizations and individuals in construction activities. The set-up, assessment and approval of CIPs financed by Official Development Assistance (ODA) are carried out under Law on construction and Law on ODA utilization and management. Article 2. Categorization and state management for CIPs 1. Construction investment projects (referred to as projects hereinafter) are categorized as below:

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a) Scale and particularity: this is an important national project whose investment policy is considered and decided by National Assembly; the other projects are categorized in 3 groups: A, B, C in accordance with Appendix I in this decree; b) Investment capital: Projects are financed by state budget; Projects are financed with credit guaranteed by State and credit for investment and development by State; Projects are financed by capital for investment and development of State; Projects are financed from other sources, inclusive of private capital or joint venture capital.

2. The investment and construction must be complied with socio-economic development master plan, profession plan, construction plan, social security and environmental protection, regulations of land law and other related laws. 3. Apart from Term 2 of this article, State also manage CIPs in accordance with below regulations, depending on capital for projects: a) For projects financed by state budget (inclusive of component projects), State manage the entire process of investment and construction, from determination of investment policy, setting up projects, decision on investment, setting up design, estimation, selection of bidder, construction to acceptance, hand-over and development; b) For projects financed with credit guaranteed by State and credit for investment and development by State, State manages investment scale and policy. The investor of the project is self-responsible for execution and management complied with regulations of this decree and other regulations of related laws; c) For projects financed from other sources, i.e private capital, the investor makes decision on type and content of project management by himself. For projects financed by joint venture capital, financiers negotiate method of management or manage the capital of highest ratio (%) in total investment pursuant to regulations. 4. For important national projects or projects in Group A comprising many component projects, if each component project can independently operate, develop and execute according to investment stages, then each component project can be managed and executed as an independent one. The division of the project into component projects is decided by the body that is decisive to the investment. Article 3. The investor of CIP The investor is the capital owner or the person to be authorized to manage and utilize the capital for CIP:
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1. For projects financed by state budget, the investor will be decided by the decisionmaker on investment before setting up CIP complied with Law on State Budget. a) For projects that Prime Minister is the decision-maker on investment, the investor will be one of the bodies, organizations: Ministries, ministerial bodies, governmental bodies, other Central bodies (generally referred to as ministerial bodies hereinafter), provincial and municipal people’s committee under the Centre (generally referred to as provincial people’s committee hereinafter) and state enterprises; b) For projects that Ministers, Heads of ministerial bodies, Chairmen of people’s committee of all levels are the decision-makers on investment, the investor will be the body who manages and develops the project. When the body to manage and develop has not been appointed or not qualified for the appointment, the decision-maker on investment can appoint the more capable body. When the body to manage and develop the project is not qualified to be the investor, it is responsible to appoint a representative to liaise the investor for project set-up, design, supervision, management, hand-over and development of the project. c) When the investor could not be decided as regulated in item b of this article, another qualified body will be appointed to be the investor or co-investor. 2. For projects financed by credit source, the borrower will be the investor. 3. For projects financed by other sources, the investor will be the capital owner or the representative complied with regulations of the law. Article 4. Supervision, investment evaluation for CIPs 1. Projects financed with 50% of total investment from state budget must be supervised and investment evaluated. For projects financed from other sources, supervision and evaluation is decided by the body that is decisive to the investment. 2. Requirements and content of supervision and evaluation include: a) Evaluate the efficiency and feasibility of the project; b) Supervise and evaluate project implementation by the investor in compliance with the contents approved by competent authorities and regulations on construction by State; c) Through supervision and evaluation, more contents arise and will be amended and proposed to competent authorities to ensure the efficiency and feasibility of the project. 3. Supervision and investment evaluation:

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a) Decision makers on investment or authorized decision makers are responsible for supervision and evaluation. Particularly for projects decided by Prime Minister, the ministry-in-charge will supervise and evaluate the investment. For projects decided, supervised and evaluated by Minister or Head of ministerial bodies, Chairman of provincial people’s committee, they will make report of project implementation to Ministry of Planning and Investment for further summary and report to Prime Minister; b) Ministry of Planning and Investment guides the supervision and evaluation of projects, summarize supervision and evaluation works of projects nationwide and periodically report to Prime Minister.

Chapter II SET-UP, ASSESSMENT, APPROVAL OF CIPs Article 5. Set-up report of pre-feasible studies and apply for investment certificate 1. For important national projects, the investor must submit report of pre-feasible studies to National Assembly for consideration and decision on investment policy. For other projects, the investor does not have to set-up investment report. 2. Content of CIP report includes: a) The necessity for investment and construction, favorable and difficult conditions; exploitation and utilization policy of national resources (if any); b) Investment scale planning: capacity, construction area, construction items of the project; location planning and land use demand; c) Analysis and preliminary selection of technology, technical figures; conditions for equipment supply, materials, energy, services, infrastructure, land clearance and resettlement (if any); effects of the project for environment and ecosystem, fire fighting and prevention, national security and defence; d) Investment type, preliminary specification of total investment cost, time for project implementation, plan of capital mobilization complied with progress and socio-economic efficiency and investment stages (if any). Article 6. Set-up Feasible study report (FS report) 1. The investor has to set-up CIP and submit to decision-maker on investment for assessment and approval, except below cases: a) CIP requires economic-technical report as stipulated in term 1 article 13 in this decree;
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b) Construction items are separate residential houses as stipulated in term 5 article 35 of Law on Construction. 2. Content of CIP is inclusive of the report as regulated in article 7 and basic design as regulated in article 8 of this decree. 3. For projects beyond the approved plan by competent authority, the investor has to report to management ministries and departments or local authorities for consideration and approval for plan supplement in accordance with their competence or submit to Prime Minister for approval prior to CIP set-up. Location and scale of construction work must be complied with construction plan approved by competent authority. In case CIP has not been in construction plan, location and scale must be approved in written form by provincial people’s commitee for projects in group A or approved in written form by competent authority for plan assessment for projects in group B and C. Time for consideration and approval does not exceed 15 working days. Article 7. Content of CIP report 1. The necessity and purpose of investment; evaluation of market demand, product consumption for production and business projects; the competitiveness of of products; social effects for the locality and region (if any); type of investment; location of construction, land use demand; conditions for material supply and other in-put factors. 2. Description of scale and area for construction, components of the project; analysis on technical, technological and capacity solution. 3. Solutions are: a) General solution on land clearance, resettlement and supportive plan for technical infrastructure construction (if any); b) Architectural Schematic Designs for urban construction works and architectural works; c) Plan for development and employment; d) Implementation stages, progress and management type. 4. EIA, fire fighting and prevention plans and requirements on national security. 5. Total investment cost; capital mobilization, capital sources and financial capability in progress, refund plan for refund project and analysis on economic-financial-sicial efficiency. Article 8. Content of Basic Design (BD)

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1. BD is done in CIP set-up stage on the basis of the selected ASD to show main technical figures complied with applicable standards. This will be a basis for CIP implementation at further stages. Content of BD is inclusive of the report and drawings 2. The report comprises: a) Brief introduction of construction site, ASD; master layout or construction route plan for projects constructed in route; location, scale of construction works; connection of components between the project and with regional technical infrastructure system; b) Technological plan and technology system for technological projects; c) ASD for architectural works; d) Main structure plan, technical system, infrastructure; đ) Environmental protection plan and fire fighting complied with regulations of the law; e) List of main applicable standards and codes. 3. ASD consists of: a) Master layout drawings or route plan for projects constructed in route; b) Layout of technological system for technological projects; c) Drawings of ASD for architectural works; d) Drawings of main structure plan, technical and infrastructure plan of the work, connection with regional infra. Article 9. Submission for CIP assessment The submission should comprise: 1. Letter of application for CIP assessment (form II enclosed in Appendix II in this decree). 2. CIP is inclusive of report and BD. 3. Related legal documents. Article 10. Competence for CIP assessment
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1. Decision maker on investment is responsible for project assessment prior to approval. Professional division under decisive level for investment will be the coordinator for assessment. The coordinator will collect comments on Basic Design from state management offices as regulated in term 6 of this article and comments from related offices for project assessment. Decision makers on investment can hire consultants to do partial or entire assessment as regulated in term 1 and term 2 article 11 of this decree. For projects whose investment decision-makers have been graded or authorized, the person to be graded or authorized will be in charge of assessment. 2. Prime Minister establishes a National Assessment Council for assessment of CIPs decided by Prime Minister or other projects in case of necessity. Minister for Planning and Investment will be Chairman of National Assessment Council. 3. For projects financed by state budget: a) Ministerial bodies will assess CIPs decided by themselves. Professional division under decision-maker for investment will be the coordinator for assessment; b) Provincial people’s committee will assess CIPs decided by themselves. Authority for Planning and Investment will be the coordinator for assessment. c) People’s committee of district and commune level will assess CIPs decided by themselves. The coordinator is the body in charge of plan and budget management under decision-maker for investment. 4. For other projects, decision-makers for investment will assess CIPs by themselves. 5. For particular CIPs, the assessment will be carried out in compliance with regulations in Decree on management of particular CIPs issued by Government. 6. The assessment of Basic Design is simultaneous with the CIP. State bodies are responsible for comments on Basic Design: a) For important national projects and projects in group A: Ministry for professional construction management; b) For projects in group B, C: Department for professional construction management Ministry of Construction issued Circular regulating in details competence and liability for comments on Basic Design of the aforesaid bodies. 7. Time for project assessment since full regular submission, detailing: a) For important national projects: not exceed 90 working days; b) Projects in group A: not exceed 40 working days;
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c) Projects in group B: not exceed 30 working days; d) Projects in group C: not exceed 20 working days. Article 11. Content of CIP assessment 1. Efficiency of CIP: the necessity of investment, input factors; scale, capacity, technology, duration, implementation progress, financial analysis, total investment, socio-economical effect. 2. Feasibility: the suitability with plan, land use demand, natural resources (if any); ability of land clearance, capital mobilization for project progress; management experience of the investor, capability of loan refund; fire fighting plan; influential to CIP such as national defence and security, environment and other related legal regulations. 3. Basic Design: a) The suitability of Basic Design to approved detail plan or master layout; basic design to selected route plan; basic design to location, scale and approved planning figures for construction works in the region without approved detail plan; b) The suitability of regional infrastructure connection; c) The properness of technological solution, system for technological construction works; d) The application of norms and standards on construction, environment, fire fighting and prevention; đ) Capability of consultants and individuals for basic design set-up. Article 12. Competence for decision on CIPs 1. For projects financed by state budget: a) Prime Minister decides important national projects pursuant to Resolution of National Assembly and other important projects; b) Ministers, Heads of Ministerial bodies decide investment of projects in group A, B, C. They are also entitled to authorize their direct under-ministerial bodies to decide the investment; c) Chairmen of People’s Committee of all levels decide the investment of projects in group A, B, C within their scope and local budget approved by People’s Council of the same level. Provincial and district people’s committee are entitled to authorize or grade investment decision for projects in group B, C for their direct under bodies.

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d) Chairman of provincial people’s committee regulates in details for chairmen of people’s committee at district and commune levels to decide investment of projects financed by assistance capital from upper level. 2. Projects financed by other sources or joint venture capital, the owner decides the investment and takes responsibility for it. 3. The competent person for investment decision can make the decision only when the project is assessed. Particularly for projects financed by credit, the lender will assess financial and refund plan for approval or disapproval before the competent person makes investment decision. 4. The content of investment decision: pursuant to the form in enclosed appendix III Article 13. Economic – technical report of CIP 1. Economic – technical report should be submitted to decision-maker on investment, instead of FS report for the following projects: a) Projects for religion purpose; b) Newly-built, renovated, repaired, upgraded construction works with total investment of below 15 billion VND (exclusive of land use cost), complied with socio-economic development plan, professional plan, construction plan; except when the decision-maker requires FS report as a necessity. 2. The content of economic – technical report of CIP is regulated in term 4 article 35 of Law on Construction. 3. Competent person for investment decision regulated in article 12 of this decree is responsible for assessment of economic – technical report and investment of CIP. 4. The investor is in charge of assessment of detail design and quantity estimation to make basis for investment decision-maker approves the report.

Article 14. Amendment of CIPs 1. CIPs are amended in following cases: a) Acts of God: earthquake, hurricane, flood, tsunami, enemy or other force majeure b) Arising factors to bring about higher efficiency for CIP;
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c) Change of detail plan directly affects the location, scale, particularity and purpose of CIP; d) Unusual fluctuation of material price, exchange rate for capital using foreign currency or issuance of new policies and regimes in which cost of investment and construction can be changed. 2. When amendment of project changes the location, scale, purpose or excess of approved total investment cost, the investor has to report to investment decision-maker. In case of no changes, the investor is permitted to amend the project themselves. The content of amendment must be re-assessed. 3. The person to decide CIP amendment has to take legal responsibility for his decision. Article 15. Design competition 1. Design competition is encouraged for construction works having architectural requirement. 2. For public works of large scale, having specific architectural requirement, the decisionmaker on investment will decide the competition or selection of the optimal ASD meeting aesthetical requirement of the city.
3.

The author of selected ASD will be guaranteed for his copyright and will be selected to directly enter into negotiation and sign contract for CIP set-up if the author is competent enough as per regulation; if the author is not competent enough, he can associate with a competent design and consultancy company to sign contract with the investor. If the author refuses to set-up CIP and detail design, the investor will select other contractor pursuant to legal regulations.

Article 16. Steps of CIP design
1.

CIP design consists of: basic design, technical design, detail design and other design steps pursuant to international practice decided by decision-maker on investment upon approval of CIP.

a) Basic Design is regulated in term 1 article 8 in this decree;
b)

Technical design is made on the basis of the approved basic design of CIP, sufficiently shows technical figures and materials complied with applicable norms and standards, also a basis for implementation of detail design;

c) Detail design sufficiently shows technical figures, materials and structural details in accordance with applicable norms and standards, to ensure conditions for implementation of CIP.
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2.

CIP can consist of one or many types of projects with one or many levels. Depending on scale and particularity of projects, design work can be done in one, two or three steps as follows:

a) One step design is the detail design applicable for projects with economic-technical report only. In this case, basic design, technical design and detail design are added up as one and called as detail construction design. For one-step-design, it is possible to use sample design, typical design issued by competent state body for implementation of detail construction design;
b)

Two-step-design is inclusive of basic design and detail design applicable for projects regulated to set-up CIP except projects regulated in item a and item c of this article. In this case, technical design and detail design are added up as one and called as detail construction design;

c) Three-step-design comprises basic design, technical design and detail design applicable for projects regulated to set-up CIP. Depending on complicatedness of projects, implementation of three-step-design is decided by decision-maker on investment. For two-step-design or three-step-design, following steps must be complied with preceding approved steps.
3.

The investor is in charge of setting up CIP. If the investor is competent enough, he can make the design himself. If he is not competent, he can hire a consultant for design work. Particularly for three-step-design, contractor for construction work can be assigned to make detail design if he is competent as per regulation.

Article 17. Design and quantity estimation of CIP 1. Design is made for each project, inclusive of report, drawings, related survey documentation, warranty procedure, quantity estimation.
2.

Design should be archived pursuant to law on archives.

Article 18. Assessment and approval for technical and detail design. 1. Assessment and approval for 3-step design a) Technical design: After the investor assesses and approves technical design, the result will be shown in written form, inclusive of following content: The suitability of technical design to basic design; The properness of structure solution;
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Conformity to applicable building standards; Safety evaluation of buildings; Properness of selection of technology system and equipment for buildings related to technological requirement. Conformity to requirements on fire fighting and prevention.

The investor can hire consultants to assess partially or entirely the above content to make basis for assessment. Assessment result is shown in written form. b) Detail design: Detail design must be endorsed by signature and approved by seal by the investor or authorized representative of the investor before being brought in construction. The investor can hire consultants to supervise construction, check detail design and endorse drawings before approval. 2. Assessment and approval of detail design for 2-step and one-step design a) For 2-step design, the investor will assess and approve detail design. For one-step design, the investor will do the assessment and decision-maker on investment will approve detail design concurrent with report on economic-technical construction. b) Assessment content of detail design is carried out as regulated in item a, term 1 of this article. c) Drawings are endorsed before being brought in construction, stipulated in item b, term 1 of this article. 3. Cost for verification and assessment of detail design is recorded in total investment cost.

Section 2 CONSTRUCTION PERMIT (CP) Article 19. Construction Permit 1. Prior to commencement of construction work, the investor has to get construction permit, except below cases: a) National confidential works, works built under emergency order, temporary works serving main construction work;
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b) Construction works in route not crossing townships but suitable with approved construction plan, projects within CIP approved by competent authority; c) Construction works within township, industrial zone, export processing zone, hi-tech zone, residential area with 1/500 detail plan approved by competent authority; d) Projects to be repaired, renovated, installed with internal equipment without changes of architecture, load-bearing structure and safety; e) Infra works of small scale within remote and rural areas; f) Separate houses in remote areas outside the city and concentrated residential area; separate houses in rural residential area without approved detail plan. 2. Construction works and houses in the region with publication of approved detail plan but not yet implemented will only be granted with temporary timed Construction Permit in accordance with time for plan implementation. 3. Conditions for CP in townships are regulated in article 65 of Law on Construction. Entitlement and obligation of applicants for CP is regulated in article 68 of Law on Construction. 4. CP: refer to form in Appendix VI in this decree. Article 20. Application for CP of construction works and urban residential houses Application for CP: 1. CP form in Appendix IV enclosed in this decree. For temporary timed CP, it is necessary to commit to self-Demolition before land is cleared by State. 2. Copy of one of land use right documentation pursuant to legal regulation. 3. Drawings must show the layout, section, main vertical side; foundation layout; layout of locations or piping route; layout of system and connection point of electricity and water supply, storm water drainage, sewage drainage. For repaired or renovated works required CP, photos of site status must be shown. Article 21. Application for CP of rural residential houses Application consists of: 1. Application form for CP, form in Appendix V of this decree. 2. Copy of one of land use documentation as per legal regulations. 3. Site layout of construction work on the land lot and terraced works (if any) drawn by the house owner.
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Article 22. Receipt of CP application 1. The body granting CP is responsible for receiving CP application. Based on types of CP application, the body will check the regularity pursuant to regulation in article 20 or article 21 in this decree. 2. Upon receipt of regular application, the body has to issue a receipt form clearly state the date for result feedback. Receipt form is made in 02 copies, 01 copy is given to the applicant and 01 copy is filed in the body. 3. In case of irregular application, the body will have to explain and guide the applicant to supplement the application as regulated. Time for completion of application will be calculated in time for CP. Article 23. Competence for CP grant 1. Provincial people’s committee grant CP to construction works of special level and 1st level; religion works, heritage and cultural works; monument; advertisement, masterpieces within their administrative boundary; works on main routes and streets in the city; works of foreign direct invested projects; works of the project and other works regulated by provincial people’s committee. 2. People’s committee at district level grant CP for the other works and separate houses within their administrative boundary, except works regulated in term 1 of this article. 3. People’s committee at commune level grants CP for separate houses in rural residential area having approved detail plan within their administrative boundary. Article 24. Amendment of CP 1. When it is required to amend detail planning differently from the content of granted CP, the investor has to apply for approval for the amendment before work is commenced according to the amendment. The body granting CP is competent for CP amendment and make sure that it is suitable with construction plan and takes responsibility for the content of amendment. The amendment is supplemented in Item “extension and amendment” in granted CP. 2. Application for CP amendment is inclusive of: a) Application form for CP amendment; b) Original copy of granted CP; c) Drawings of adjusted design. 3. Time for consideration of CP amendment is 10 working days at the latest since regular application.
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Article 25. Liabilities of the body granting CP 1. Publically list conditions, process and procedures for CP grant in Head Office of the body granting CP. 2. Provide in written form all information related to CP grant as per request by the body. Time for information provision is 7 working days at the latest since the receipt of request. 3. Collect comments from related departments when it is necessary to justify information for CP grant. Departments to be asked for comments are responsible for feedback in written form to the body within 10 working days since the receipt of official letter of comment collection from the body. After 10 working days, if there is no response from the departments, they are considered to agree and will be liable for all consequences caused by their late response or ignorance. 4. Grant CP within 20 working days since regular application. For separate residential houses, time for CP grant does not exceed 15 working days since regular application. 5. Take legal responsibilities and compensate for damages caused by wrong or late CP grant compared with regulated deadline in term 4 in this article. 6. Coordinate with local people’s committee to check the accordance between construction work and CP; deal with violation as per regulation. In case of suspense decision, if the person to be granted with CP does not execute, CP will be withdrawn and passed to competent authorities to deal as per regulation. 7. Local people’s committee inform local competent authority not to provide electricity and water, suspend business and services of works out of planning, without CP or not complied with granted CP. 8. Settle complaints and accusation about CP grant as per legal regulation. 9. Collect fee for CP grant as per regulation. 10. Not entitled to appoint organization or individual to design or set-up design companies directly under the body to carry out the design made by applicant for CP. Article 26. Extension of CP 1. Within 12 months since CP grant, if the construction work has not been commenced, applicant for CP must apply for CP extension. 2. Application for CP extension: a) Application form for CP;
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b) Original copy of granted CP. 3. Time for consideration of CP extension is 5 working days at the latest since regular application. 4. The body granting CP will be in charge of CP extension. Section 3 CONSTRUCTION MANAGEMENT OF CIPs Article 27. Construction management Construction management is inclusive of quality management, progress management, quantity management, labor safety on site, environment management. Particularly, construction management is implemented as per regulations of decree on construction quality management. Article 28. Progress management 1. Construction implementation progress must be set-up before construction work is executed. The implementation progress must conform to approved mater implementation progress (MIP). 2. For construction work of large scale and long construction duration, implementation progress must be set-up for each phase of month, quarter and year. 3. Contractor is obliged to set-up detail implementation progress, alternatively allocate other necessary works provided that MIP is ensured. 4. Investor, contractor, consultant and liaised parties are responsible for following up and supervising implementation progress and adjust the progress in case it is extended in some phases provided that MIP is ensured. If MIP is extended, the investor must report to decision-maker on investment to decide adjustment on MIP. 5. Acceleration of implementation progress on the basis of construction quality guarantee is encouraged. If the acceleration brings about higher efficiency, contractor will be entitled for contract award as regulated in the contract. If the extension of progress causes damages to the project, the party to violate will be liable for compensation and contract penalty. Article 29. Construction quantity management 1. Construction work must be executed complied with the quantity of approved design.
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2. Construction quantity is calculated and confirmed between the investor, contractor and consultant in accordance with time or construction period and will be collated with quantity of approved design to make basis for acceptance and payment according to the contract. 3. When there is arising quantity beyond approved design and construction quantity, a solution should be considered by the investor and contractor. Particularly for projects financed by state budget, the investor has to report to decision-maker on investment for consideration and decision when there is arising quantity beyond design and construction quantity which makes changes to total investment cost. Arising quantity approved by decision-maker on investment and investor is the basis for payment and finalization of the contract. 4. Decreased or increased quantity statement or collusion between parties which causes fault to quantity for payment is rigidly prohibited. Article 30. Labor management on site 1. Contractor has to set-up safety measures for human and works on site. If the safety measures are related to parties, it must be negotiated. 2. Measures and regulations on safety must be publically shown on site for people’s acknowledgement and abidance; people being in charge of guiding and warning against accidents must be allocated on dangerous positions. 3. Contractor, investor and related parties have to usually check and supervise labor safety on site. When there is violation of labor safety, construction work must be suspended. When the violation happens, the manager in charge of the site has to take legal responsibility for it. 4. Contractor is in charge of training, guiding and popularizing regulations on labor safety. For some works strictly required labor safety, workers must have training certificate of labor safety. The employment of untrained workers of labor safety is prohibited. 5. Contractor is responsible for sufficiently providing labor safety equipment for workers as regulated. 6. When there is any problem with labor safety, contractor and related parties are responsible for dealing with them and report to state management body on safety labor, overcoming and compensating damages caused by the contractor. Article 31. Environment management at site 1. Contractor has to abide environmental protection measures for workers and protect surroundings, inclusive of: dust and noise prevention, refuse treatment and site clean-up. For urban construction works, measures of covering and cleaning up site must be done.
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2. During transportation of construction materials and refuse, it is necessary to use covering measure for environmental protection. 3. Contractor and investor are in charge of checking and supervising environmental protection and will be supervised by state management body. If contractor does not abide regulations on environmental protection, investor and state management body are entitled to suspend the construction and contractor will be required to abide environmental protection measures. 4. The person to violate the regulation on environment protection will take legal responsibility for it and compensate all damages. Article 32. Demolition of construction works 1. Demolition of work, part of work done in following cases: a) Land clearance; b) Works are at risk of being collapsed, dangerous for human lives and nearby works; c) Construction works in the area which is restricted to construction as regulated in term 1 article 10 of Law on Construction; d) Partial or entire work is constructed wrongly with construction plan and CP; e) Other cases pursuant to legal regulation. 2. Demolition must ensure following principles: a) Have decision on demolition; b) Have demolition plan as per regulation; c) Safety for human and works nearby must be ensured; d) Environmental protection; e) Demolition must be supervised to prevent risks. Section 4 TYPES OF CIPs MANAGEMENT Article 33. Types of project management 1. Decision-maker on investment will decide the type of project management as stipulated in term 2 article 45 in Law on Construction.

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2. In case the investor directly manages the project, a Project Management Board (PMB) will be established to act as a coordinator for project management. PMB must be capable of project management as per requirement of the investor. PMB can hire a consultant (with agreement from the investor) to partially manage and supervise works that PMB cannot fulfill. For projects of small scale with total investment of below 7 billion VND, it is possible for the investor not to establish a PMB, but utilizing their experts for management and operation or hire qualified and experienced employees to assist with project management. 3. In case the investor hire a consultant for project management and operation, the consultant should be capable of management complied with scale and particularity of the project. Liability and entitlement of the consultant is in accordance with agreement signed between two parties. The consultant is entitled to subcontract management work to consultancy individuals or organizations with acceptance of the investor and in compliance with the signed agreement. When hiring a consultant, the investor still has to refer to their professional departments or appoint a coordinator for checking and supervising the performance the agreement. Article 34. Obligation and entitlement of the investor and PMB upon the establishment of PMB 1. The investor will take obligation and entitlement from the stages of preparation, implementation to hand-over and develop the project to ensure productivity and feasibility and complied with legal regulations. PMB can be assigned to manage many projects provided that it is approved by decision-maker on investment and in compliance with the principle, in which each project must not be interrupted and must be managed and settled as regulated. The assignment and authorization for PMB should be shown in decision on PMB establishment. The investor is liable for instructing and checking performance of PMB. 2. PMB performs the assignment and authorization by the investor. PMB takes responsibility in front of the investor and law according to its assignment and authorization. Article 35. Obligation and entitlement of the investor and the consultant in case the investor hire a consultant for project management 1. The investor will take obligation and entitlement from the stages of preparation, implementation to hand-over and develop the project to ensure productivity and feasibility and complied with legal regulations. The investor is in charge of selecting and signing contract with capable consultant for project management. The investor is liable for checking and supervising contract performance of the consultant.

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2. The consultant performs its obligation and entitlement in accordance with contract signed between the investor and the consultant. The consultant takes responsibility in front of the investor and law for performing the commitments in the contract. Article 36. General regulation on capability of organizations and individuals in construction activities. 1. Organizations and individuals entering into construction must be capable enough for such type or group of projects stipulated in this decree. 2. Organizations and individuals must be capable enough when entering into below works: a) Set-up CIP; b) Manage CIP; c) Design construction planning; d) Design construction work; e) Survey construction work; f) Execute construction work; g) Supervise the execution of construction work; h) Carry out construction experiment; i) Verify construction quality; j) Structural Security Certificate and Quality Fitness Certificate for construction work. Capability of organizations and individuals is shown in form of professional certificate or conditions on capability complied with the assignment. 3. Individuals entering construction activities must have degree or training certificate suitable to the assignment granted by legal training centers. 4. The individual titled as Project Manager for design of construction planning, construction work; senior designer; chief surveyor; construction supervisor and individuals working independently perform design work for construction planning, construction work and construction supervision must possess professional certificate as regulated. Individuals entering into project management must possess professional certificate for management of CIPs. 5. To ensure the construction quality, organizations and individuals must be capable enough for each bid or particular work.
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6. Capability of organizations is determined in levels, on the basis of professional capability of individuals in the organization, experience, financial capability, equipment and management capability of the organization. Ministry of Construction establishes an information system of capability and operation of organizations and individuals doing construction consultancy, construction subcontractors nationwide, including foreign contractors doing construction in Vietnam. 7. Projects financed by state budget, credit guaranteed by state, credit for investment and development, the contractor who set up technical design or detail design is not entitled to sign contract of construction consultancy and supervision with the investor; contractor for supervision work is not entitled to sign contract of construction quality verification with the contractor for construction work, except the case of permission by decision-maker on investment. 8. When selecting contractor for construction work, the investor must refer to regulations on capability in this decree and takes legal responsibility for damages caused by selection of incapable contractor. Article 37. Professional Certificate 1. Professional Certificate is the confirmation of professional qualification granted for engineers and architects qualified in construction plan design, construction survey, detail design, construction supervision. 2. Professional Certificate is regulated complied with one form and valid nationwide. The Certificate must show clearly scope and field which are permitted to practice. 3. The Certificate is granted by Director of DOC. DOC decides the establishment of Consultation Council to assist Director in granting the Certificate. Article 38. Conditions for granting Certificate of Architect (CA) Person to be granted CA must be university graduate upwards majored in architecture or construction planning, experienced in design work in minimum 5 years and took part in architectural design in 5 works or 5 approved construction plans at least. Article 39. Conditions for granting Certificate of Engineer (CE) Person to be granted CE must be university graduate upwards, majored in the field suitable with registered profession in CE, experienced in the field at least 5 years and took part in design or survey work in at least 5 projects. Article 40. Conditions for granting Certificate of Construction Supervisor (CS) 1. Person to be granted CS must be university graduate upwards, majored in the field suitable with registered profession in CS, directly took part in design or construction for 3 years upwards or 5 projects at least or experienced in supervision work for 3 years
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upwards prior to the effectiveness of Law on Construction; passed training course on construction supervision. 2. People who possess college or junior-college degree of suitable major, took part in design or construction work or supervision work for at least 3 years or passed training course on construction supervision will be granted CS. The Certificate is only used for supervision of construction works level IV. Article 40. Capability of Project Manager (PM) 1. Capability of PM is categorized in 2 levels in accordance with types of works. PM must be university graduate, majored in the field suitable with particularity and requirement of project and meet conditions equivalent to below level: a) Level 1: successively work for project set-up for at least 7 years, was PM for 1 projects in group A or 2 projects in group B of the same category or was senior designer level 1 for works of the same project category; b) Level 2: successively work for project set-up for at least 5 years, was PM for 1 project in group B or 2 projects in group C of the same category or was senior designer level 2 upwards for works of the same project category; c) Particularly for remote areas, individuals possessing college or junior college degree of a field suitable with project category, successively work for project set-up and design for at least 5 years will be recognized as PM for project level 2. 2. Scope of work: a) Level 1: entitled to work as PM for important nation projects, projects in group A. B, C of the same category; b) Level 2: entitled to work as PM for projects in group B, C of the same category; c) Person who has not been categorized as PM will be entitled to work as chief to set-up economic-technical report; if he has been working as PM for 5 economic-technical report, he will be entitled to work PM for projects in group C of the same category. Article 42. Capability of management consultants 1. Capability of consultant for project set-up is categorized in 2 levels in accordance with types of projects: a) Level 1: the number of architects, engineers and economic engineers must be 20; at least one of them is competent enough to be PM for projects level 1 or senior designer level 1 for projects of the same category;

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b) Level 2: the number of architects, engineers and economic engineers must be at least 10; at least one of them is competent enough to be PM for projects level 2 or senior designer level 2 for projects of the same category; 2. Scope of work: a) Level 1: is entitled to set-up important national projects, projects in group A, B, C of the same category; b) Level 2: is entitled to set-up projects in group B, C of the same category; c) Companies that are not capable enough to be categorized, they will only be entitled to set-up economic-technical report for projects of the same category. Article 43. Capability of Director for Management Consultation 1. Capability of Director for Consultation is categorized in 2 levels. The Director must be university graduate majored in construction, suitable with project requirement, have professional certificate on project management and meet conditions equivalent to each below level: a) Director for project consultation level 1: Successively work in design and construction for at least 7 years, was Director or Deputy Director for project consultation of 1 project in group A or 2 projects in group B of the same category or was chief commander level 1 on construction site or senior designer level 1; b) Director for project consultation level 2: successively work in design and construction for at least 5 years, was Director or Deputy Director for project consultation for 1 project in group B or 2 projects in group C of the same category or chief commander level 2 on site or senior designer level 2; c) In remote areas, graduates from college or junior college majored in construction, experienced in project set-up or design work or construction work for at least 5 years can be Director for consultation of projects level 2. 2. When the investor establishes a PMB, Project Director must be university graduate upwards majored in a suitable field, have professional certificate on project management and experienced in the profession for at least 3 years. Particularly for projects in group C in remote areas, Project Director can be graduates from college or junior college majored in a suitable field and experienced in the profession for at least 3 years. The investor can appoint staff in their organization or employ a person qualified for above conditions for Project Director position. 3. Scope of work: a) Level 1: is entitled to manage important national project, projects in group A, B, C;
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b) Level 2: is entitled to manage projects in group B, C; c) Individuals who are not categorized, they are only entitled to manage economic-technical report; they can manage projects in group C of the same category if they have experienced in management of 5 economic-technical reports. Article 44. Capability of management consultation companies 1. Capability of consultation companies is categorized in 2 levels: a) Level 1: Have a director for consultation for management of projects level 1, suitable with project category; Have at least 30 architects, engineers and economic engineers suitable with project requirement, of which at least 3 are economic engineers; Managed at least 1 project in group A or 2 projects in group B of the same category.

b) Level 2: Have a director for consultation for management of projects level 1 or level 2, suitable with project category; Have at least 20 architects, engineers and economic engineers suitable with project requirement, of which at least 2 are economic engineers; Managed at least 1 project group B or 2 projects in group C of the same category.

2. Scope of work: a) Level 1: is entitled to manage important national projects, projects in group A, B, C; b) Level 2: is entitled to manage projects in group B, C; c) Companies that are not capable enough to be categorized will be entitled to manage economic-technical report. 3. Companies that are not capable enough to be categorized, they will be entitled to manage projects in group C if they have managed at least 5 economic-technical report. Article 45. Capability of Chief Surveyor 1. Capability of Chief Surveyor is categorized in 2 levels: a) Level 1: have professional certificate of engineer, was chief surveyor of at least 1 survey work type I upwards or 5 survey works type II;
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b) Level 2: have professional certificate of engineer, was chief surveyor of at least 1 survey work type II or 3 survey works type III or took part in survey works type II upwards; 2. Scope of work: a) Level 1: is entitled to be chief surveyor of projects of special type, type I, type II, type III and type IV of the same category; b) Level 2: is entitled to be chief surveyor of projects of type II, type III and type IV of the same category; c) For topographic survey work, chief surveyor is entitled to be chief of projects of all types. Article 46. Capability of survey consultation companies 1. Capability of survey consultation companies is categorized in 2 levels: a) Level 1: There are at least 20 engineers, suitable with requirements of survey work, at least one of whom is competent enough to be chief surveyor level 1; Have enough equipment suitable with each types of survey works and standard laboratory; Have done at least 1 survey work of projects of special type or type I of the same category, or 2 survey works of projects of type II of the same category.

b) Level 2: Have at least 10 engineers suitable with requirements of survey work, at least one of whom is capable enough to do survey work level 2; Have enough survey equipment to do each type of survey work; Have done at least 1 survey work of projects type II of the same category or 2 survey works of projects type III of the same category.

2. Scope of work: a) Level 1: is entitled to do survey work for projects of special type, type I, type II, type III and type IV of the same category; b) Level 2: is entitled to do survey work for projects of type II, type III and type IV of the same category; c) For topographic survey work, only survey companies of level 1 and 2 are entitled to topographic survey for projects of all types.
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Article 47. Capability of Senior Designer 1. Senior Designers are categorized in 2 levels: a) Level 1: Have professional certificate of architect, engineer suitable with the assignment; Was senior designer of at least 1 project of special type or type I or 2 projects type II of the same category or was senior designer of 1 main profession of 3 projects of special type or type I of the same category.

b) Level 2: Have professional certificate of architect, engineer suitable with the assignment; Was senior designer of at least 1 project of type II or 2 projects type III of the same category or was senior designer of 1 main profession of 3 projects type II of the same category.

2. Scope of work: a) Level 1: is entitled to be senior designer for projects of special type, type I, type II, type III and type IV of the same category and PM for projects in group A, B, C of the same category; b) Level 2: is entitled to be senior designer for projects type II, type III and type IV of the same category and PM for projects in group B, C of the same category. Aticle 48. Capability of Chief Designer 1. Chief designers are categorized in 2 levels: a) Level 1: Have professional certificate of architect, engineer suitable with assignment; Was chief designer of at least 1 project of special type or type I or type II of the same category.

b) Level 2: Have professional certificate of architect, engineer suitable with assignment; Was chief designer of at least 1 project type II or 2 projects type II of the same category or took part in design work of 5 projects of the same category.

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d) Particularly for remote areas, graduates from college or junior college, successively do design work for at least 5 years, they can be chief designer for projects type II, type IV, except projects which are compulsory to check and certify load-bearing structure as per regulation. 2. Scope of work: a) Level 1: is entitled to work as chief designer for projects of special type, type I, type II, type III and type IV; b) Level 2: is entitled to work as chief designer for projects type II, type III and type IV; Article 49. Capability of design consultation companies 1. Capability of design consultation companies is categorized in 2 levels: a) Level 1: There are at least 20 architects, engineers majored in suitable fields, one of whom is capable enough to be chief designer of projects level 1; Have enough chief designers level 1 majored in subjects of the same categorized projects; Designed at least 1 project of special type or type I or 2 projects of type II.

b) Level 2: There are at least 10 architects, engineers majored in suitable fields, one of whom is capable enough to be senior designer for projects level 2; Have chief designer level 2 majored in subjects of the same categorized projects.

2. Scope of work: a) Level 1: is entitled to design projects of special type, type I, type II, type III and type IV of the same category; set-up important national projects, projects in group A, B, C; b) Level 2: is entitled to design projects type II, type III and type IV of the same category; set-up project in group B, C of the same category; c) Companies that are not capable enough to be categorized, they are entitled to design projects type IV of the same category, set-up economic-technical report for projects of the same category. 3. Companies that are not capable enough to be categorized, they will be entitled to design projects type III of the same category if they have designed 5 projects type IV.
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Article 50. Capability of Chief and consultation companies for detail design assessment 1. Capability of Chief for detail design assessment is equivalent to capability of chief designer regulated in article 48 of this decree. 2. Capability of consultation companies for detail design assessment is equivalent to capability of consultation companies for detail design work regulated in article 49 of this decree. Article 51. Capability of consultation companies for supervision of construction work 1. Capability of consultation companies for supervision of construction work is categorized in 2 levels: a) Level 1: There are at least 20 people having professional certificate of supervision work; Did supervision work for at least 1 project of special type or type I or 2 projects type II of the same category.

b) Level 2: There are at least 10 people having professional certificate of supervision work or suitable field; Did supervision work for at least 1 project type II or 2 projects type III of the same category.

2. Scope of work: a) Level 1: is entitled to supervise projects of special type, type I, type II, type III and type IV of the same category; b) Level 2: is entitled to supervise projects type II, type III and type IV of the same category; c) Companies that are not capable enough to be categorized, they are entitled to supervise projects type IV. 3. Companies that are not capable enough to be categorized, they will be entitled to supervise projects type III if they have supervised at least 5 projects type IV. Article 52. Capability of chief commander on site 1. Capability of chief commander on site is categorized in 2 levels. He must be university graduate upwards, majored in a suitable field with project type and meet conditions equivalent to each below level:
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a) Level 1: Successively work in construction for at least 7 years; Was chief commander of projects of special type or type I or 2 projects type II of the same category.

b) Level 2: Successively work in construction for at least 5 years; Was chief commander of projects type II or 2 projects type II of the same category.

c) For remote areas, graduates from college or junior college majored in a suitable field with project type, experienced in construction for at least 5 years, hold chief commander position level 2. 2. Scope of work: a) Level 1: is entitled to work as chief commander for projects of special type, type I, type II, type III, type IV of the same category; b) Level 2: is entitled to work as chief commander for projects type II, III and IV of the same category; c) Individuals who have not been categorized, they are entitled to be chief commander for projects type IV; Article 53. Capability of construction companies 1. Capability of construction companies is categorized in 2 levels: a) Level 1: Have chief commanders level 1 for projects of the same category; Have enough architects, engineers of a suitable field with project type; Have enough technical workers having training certificate suitable with assignment; Have construction equipment for construction work; Constructed at least 1 project of special type, type I, or 2 projects type II of the same category.

b) Level 2: Have chief commanders level 1 or level 2 for projects of the same category;
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Have enough architects, engineers of a suitable field with project type; Have enough technical workers having training certificate suitable with assignment; Have construction equipment for construction work; Constructed at least 1 project of type II or 2 projects type III of the same category.

2. Scope of work: a) Level 1: is entitled to do construction work for projects of special type, type I, II, III and IV of the same category; b) Level 2: is entitled to do construction work for projects II, III and IV of the same category; c) Companies which are not capable enough to be categorized, they are entitled to do renovation and repair work with total investment of below 3 billion VND, separate houses. 3. Companies which are not capable enough to be categorized, if they have renovated 3 works, they are entitled to construct projects type IV and then if they have constructed at least 5 projects type IV, they are entitled to construct projects type III. Article 54. Capability of individuals independently working in design, survey and supervision work: 1. Capability of individuals independently working in design, survey and supervision work a) Have professional certificate suitable with the field; b) Have business license for design, survey and supervision work as per legal regulation. 2. Scope of work: a) Individual independently doing survey work will only be entitled to consult the investor about survey task, assessment for approval of each types of survey work suitable with the certificate; b) Individuals independently doing survey work will be entitled to design projects type IV of the same category and separate houses; c) Individuals independently doing survey work will be entitled to supervise construction work of projects type IV of the same category and separate houses. Article 55. Rights and obligations of individuals granted with professional certificate 1. Individuals to be granted with professional certificate are entitled to:
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a) Use the certificate to do the jobs complied with legal regulation; b) Claim and accuse cases of violation to regulation on certificate issuance. 2. Individuals to be granted with professional certificate are obliged to: a) Take part in training courses on profession related to certificate of design, survey and supervision; b) Are only entitled to do survey, design and supervision work within permitted scope regulated in the certificate; c) Take legal responsibility for content of dossier and their work quality; d) Are not entitled to erase or lend the certificate. Article 56. Capability of foreign individuals and companies working in construction in Vietnam Foreign individuals and companies must be competent enough as regulated in this decree and guidance of MOC when they take part in project set-up, project management, survey, design and assessment in Vietnam. Chapter V ARTICLE ON EXECUTION Article 57. Implementation 1. Ministers, Heads of ministerial bodies, Heads of governmental bodies, Chairman of people’s committee of provinces, cities under the Centre, Heads of political, sociopolitical, socio-occupational organizations and related organizations and individuals are responsible for implementation of this decree. 2. MOF is in charge of guidance on insurance of construction. 3. Projects which are approved before the effectiveness of this decree will not be resubmitted, following works are implemented as regulated in this decree. Management of CIP cost is implemented as regulated in Decree 99/2007/ND-CP dated 13 June 2007 by Government on CIP cost management, Decree 03/2008/ND-CP dated 7 January 2008 by Government on amendment and supplement of some articles of Decree 99/2007/ND-CP. Selection of contractor is implemented as regulated in Decree No. 58/2008/ND-CP dated 5 May 2008 by Government guiding the practice of Law on bidding and bidder selection pursuant to Law on Construction. 4. MOC guides in details determination of the investor; CIP assessment; CP issuance; project management and training on project management; supervise construction work; design competition; archive design dossier; demolition work; capability of individuals
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and companies in construction; grant professional certificate; council of consultation on other related content and guide further steps. Article 58. Effectiveness The decree takes effect since 01 April 2009 and will supersede decree No. 16/2005/NDCP dated 7 February 2005 by Government on CIP management, decree No. 112/2006/ND-CP dated 29 September 2006 by Government on amendment and supplement of some articles of decree No. 16/2005/ND-CP. Former regulations by Government, ministries, ministerial bodies and local authority conflictive with this decree are revoked.

Recipients: Board of Secretary for Central Party Prime Minister, Vice Ministers of Government Ministries, Ministerial bodies, governmental bodies Office of Central Steering Board on corruption prevention People’s council, people’s committee of central provinces, cities Central Office and Commissions of the Party President Office Ethnic Council and commissions of National Assembly Office of National Assembly People’s Supreme Court State Audit National Commission on Finance Supervision Social policy Bank Bank for Vietnamese Development

ON BEHALF OF GOVERNMENT P.M

NGUYEN TAN DZUNG

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Central Commission of Vietnamese Fatherland Front Central bodies of companies Governmental offices, divisions, official gazette Filed

Appendix I CATEGORY OF CIPs (Enclosed with Decree No. 12/2009/ND-CP dated 10 February 2009 by Government)

No.

CATEGORY OF CIPs Important national projects

TOTAL INVESTMENT COST Pursuant to Resolution No. 66/2006/QH11 by National Assembly

I 1

Group A CIPs in: national security and defence works with political-social importance. Any amount of capital
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2 3

CIPs in: production of noxious and poisonous substances, dynamite; infrastructure for industrial zone CIPs in: industrial electricity, petroleum exploitation, chemicals, fertilizers, machine manufacture, cement, metallurgy, mineral exploitation and processing, transportation projects (bridge, sea port, river port, airway, railway, national highway), residential houses. CIPs in: water resources, transportation (different from works regulated in item I-3), water supply and drainage, technical infra works, electricity works, production of equipment for informatics, electronics, pharmacy and chemical, medical, other mechanical works, production of materials, postal and telecommunication services CIPs in: light industry, ceramic, glass, printing, national garden, natural preservation, agricultural and forestry production, aquaculture, process of agricultural, forestry and aquatic products. CIPs in: medical, culture, education, broadcasting and television, other civil construction works (except residential houses), storage, tourism, sports, scientific research and other works GROUP B CIPs in: industrial electricity, exploitation of petroleum, chemical and fertilizer, machine manufacture, cement, metallurgy, mineral exploitation and process, transportation works (bridge, sea port, river port, airway, railway, national highway), residential houses. CIPs in: water resources, transportation (different from works regulated in item II-1), water supply and drainage, technical infra works, electricity works, production of equipment for informatics, electronics, pharmacy and chemical, medical, other mechanical works, production of materials, postal and telecommunication services CIPs in: technical infra for new townships, light industry, ceramic, glass, printing, national garden, natural preservation, agricultural and forestry production, aquaculture, process of agricultural, forestry and aquatic products.

Any amount of capital Above VND 1.500 billion

4

Above VND 1.000 billion

5

Above VND 700 billion

6

Above VND 500 billion

II 1

From VND 75 billion to VND 1.500 billion

2

From VND 50 billion to VND 1.000 billion

3

From VND 40 billion to VND 700 billion

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4

CIPs in: medical, culture, education, broadcasting and television, other civil construction works (except residential houses), storage, tourism, sports, scientific research and other works GROUP C CIPs in: industrial electricity, exploitation of petroleum, chemical and fertilizer, machine manufacture, cement, metallurgy, mineral exploitation and process, transportation works (bridge, sea port, river port, airway, railway, national highway). Schools within plan (any amount of capital), residential houses. CIPs in: water resources, transportation (different from works regulated in item III-1), water supply and drainage, technical infra works, electricity works, production of equipment for informatics, electronics, pharmacy and chemical, medical, other mechanical works, production of materials, postal and telecommunication services CIPs in: light industry, ceramic, glass, printing, national garden, natural preservation, agricultural and forestry production, aquaculture, process of agricultural, forestry and aquatic products. CIPs in: medical, culture, education, broadcasting and television, other civil construction works (except residential houses), storage, tourism, sports, scientific research and other works Notes:

From VND 30 billion to VND 500 billion

III 1

Below VND 75 billion

2

Below VND 50 billion

3

Below VND 40 billion

4

Below VND 30 billion

1. Projects in group A regarding railway and road must be segmented in accordance guidance by MOT. 2. Projects for construction of head office, working building of state bodies must be implemented in accordance with Decision by Prime Minister.

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