THE PRIME MINISTER OF GOVERNMENT
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
Hanoi, March 07, 1994
ON STRENGTHENING MANAGEMENT AND THE FIGHT AGAINST WASTEFULNESS, LOSSES AND NEGATIVE DEEDS IN INVESTMENT AND CONSTRUCTION
THE PRIME MINISTER
Pursuant to the Law on Organization of the Government on the 30th of September, 1992;
Pursuant to the Resolution of the National Assembly of the Socialist Republic of Vietnam, 9th Legislature, 4th Session, on the practice of thrift and the fight against wastefulness, corruption and smuggling;
Pursuant to the Resolution of the meeting on the 5th of January, 1994 of the Government;
At the proposal of the Minister-Chairman of the State Planning Committee and the Minister of Construction.
Article 1.- All investment works and projects must strictly comply with the order of capital construction already stipulated in the Statute on the Management of Capital Construction issued along with Decree No.385-HDBT on the 7th of November, 1990. Eligible for registration in the plan and allocation of construction capital are only those projects having the necessary dossier on the economic and technical feasibility study (or the economic and technical report), the dossier on technical design and the total estimate of expenditures already approved according to prescribed modalities. In special cases on urgency when there is no time to complete the procedures as prescribed above, permission by the Prime Minister is mandatory.
With regard to projects handed over from the earlier period, the ministries and localities must check again the design, the total estimate of expenditures, the volume of construction and assembly already achieved up to the end of 1993 and the bidding contracts already signed. If the expenditures have exceeded the approved capital, construction should be temporarily suspended so that readjustments or additions could be made to the economic and technical feasibility study or the technical design and to the total estimate of expenditures for re-approval by the higher level and re-registration of the plan and new allocation of fund. The managerial board of the project and the construction and assembly businesses shall only effect a volume of work within the limit of the investment plan. The bank loan interest shall not be defrayed if it is accrued through the delay in payment.
Article 2.- When examining and approving the economic and technical feasibility study (or the economic and technical report) and the total investment, the technical design and the total estimate of expenditures, the total investment and the total estimate of expenditures shall be calculated on the basis of the prices at the time of the examination and approval. In case the total estimate of expenditures exceeds the total investment by 10% (ten percent), this estimate must be approved by the office authorized to approve the economic and technical feasibility study.
The prices written in the bidding contract is the price for payment of the project. The investors must not sign a contract with a price higher than the approved total estimate of expenditures, except in case the total estimate is re-approved according to the prescribed modalities. A contract can be implemented only after the authorized echelon has inspected and approved the technical design and the total estimate of expenditures. The price of the contract passed on by the contractor to a sub-contractor must also be sent to the authorized office for monitoring and inspection.
Article 3.- The investment in the construction of non-productive projects in the State sector must strictly abide by Decision No.75-CT of the Chairman of the Council of Ministers (now Prime Minister) on the 27th of March, 1991, especially with regard to office houses, guest houses, meeting halls and rest-houses of different levels, services and mass organizations at the center and in the localities. The State Planning Committee and the Ministry of Construction are charged with inspecting the implementation of Decision No. 75-CT in 1993 including within the State businesses and reporting the result to the Prime Minister, as well as the new projects to be included in 1994 plan.
Article 4.- The new investment projects or major transformation or repairs using the funds for economic works or non-productive works (such as the infrastructures of Program 327, Program for the elimination of the Third Shift in general education schools, the grassroots medical establishments, restoration or repairs of roads and bridges, family planning...) must all be registered in the investment plan and carried out according to the Statute on the Management of Capital Construction. The ministries and localities which have projects requiring funds for non-productive works must reorganize the management and enhance the supervision of the use of this fund as is the case with the investment capital for capital construction. The State Planning Committee and the Ministry of Finance are charged with providing concrete and close guidance in the planning and fund allocation for these projects when they officially assign the targets under the State plan for 1994.
Article 5.- With regard to the projects funded by foreign Official Development Aid (ODA), the State Planning Committee shall, together with the Ministry of Construction, provide guidance for the concretization of proceedings stipulated in the Statute on Management of Capital Construction and the Regulations on the Allocation of Fund and Payment for the Projects before the 31st of March, 1994.
Article 6.- The projects which start construction in 1994 must observe the regime of bidding or selection of contractor who must be a construction and assembly unit having the legal status in the construction business.
With regard to the projects which are handed over from the earlier period and which included installations which have just started construction, these installations must also abide by the regime of bidding and selection of contractor.
It is strictly forbidden to haphazardly assign the construction to a contractor outside the regulations. The assigner of the plan and the allocator of fund, land or construction permit must not arbitrarily designate a contracting unit. It is forbidden for the assigner and the contractor to collude and falsify the volume of construction.
When a project has been contracted, the Ministry of Finance, the State Bank and the State Planning Committee have the responsibility to ensure and adequately procure the fund. The Ministry of Construction has the responsibility to guide and inspect the process of bidding and the selection of the contractor for construction in various services and localities.
Article 7.- The Ministry of Finance shall transfer the budgetary fund for investment in construction to the Bank for Investment and Development in order to allocate funds according to the Statute on Management of Capital Construction except in special cases allowed by the Prime Minister.
Article 8.- The State offices and businesses are not allowed to use on their own initiative the unlawful sources of funds to invest in construction. It is strictly forbidden to sell land or assign the right to use land allocated by the State in the guise of joint venture or cooperation which are in fact the sale of State land to profit by the price disparity.
The General State Inspector together with the administration at all levels are charged with inspecting to detect, handle and severely punish the most typical cases, retrieve the land and the money gained illicitly to remit to the State budget.
Article 9.- Within the third quarter of 1994, the administration of major cities (Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, Vung Tau) shall have to make public their detailed construction plan down to each street and in the whole city so that the population may know, carry out and inspect the implementation.
Article 10.- The Ministry of Construction has the responsibility to revise the mechanism for calculating the construction prices, revise the economic and technical norms in construction, and readjust immediately those unreasonable norms and expenditures; to direct, guide and inspect the services and localities in the establishment of project and local unit prices, and draw up the estimates of expenditures for each construction project. The important unit prices must be agreed upon by all the branches concerned, e.g. construction, pricing, finance and planning.
Each ministry and each locality must have a service specializing in capital construction to carry out regular supervision and inspection, to monitor the situation of implementation, take part in the process of testing on completion and making the final account statement of the project so as to ensure that the projects meet all the requirements in capacity, quality, tempo of construction and construction cost already listed in the approved economic feasibility study.
Article 11.- Councils for the final account statement of construction projects shall be set up under the chairmanship of the Ministry of Finance and composed of the pricing, construction and planning services with regard to the projects financed by the central budget, and composed of the Financial Service and concerned services with regard to the projects financed by the local budgets. Only after the final account statement is passed shall all the construction fund of the projects be disbursed.
Article 12.- The ministries, offices of ministerial level, provinces and cities directly under the Central Government must conduct monthly briefings on capital construction in order to solve questions related to the implementation of the investment capital, inspect the use of the investment capital to report to the higher level and to submit to the higher level proposals for settlement.
The State Planning Committee, together with the Ministry of Construction and the Ministry of Finance, the State Bank and the concerned ministries, must conduct regular briefings on capital construction in order to solve questions of a general character, ensure the building tempo of the key State projects, and report and submit proposals to the Government on the settlement of questions beyond the inter-ministry authority. The ministries and the localities must conduct an inspection and revision of the project managerial boards and quickly replace the managerial cadres of the investing party who are not professionally or managerially qualified in investment and construction in order to perfect the apparatus of the project managerial board qualified in management and operation. The Ministry of Construction shall directly guide the construction consultancy organizations capable of helping the investors manage the construction of the projects through the implementation of the economic contract.
Article 13.- The ministries and the localities must review the implementation of the capital construction investment program for 1993, expeditiously settle the violations already detected (including detections and protests by the Supreme People's Inspectorate and the inspection bodies at various levels) and submit a report to the Prime Minister within the first quarter of 1994.
Article 14.- In execution of the requirements of the Resolution of the National Assembly (9th Legislature, 4th Session) on the practice of thrift and the fight against wastefulness, corruption and smuggling, the ministries and localities, besides organizing the close supervision of the investment in capital construction already stipulated in Article 8, must take all possible concrete measures to economize the investment capital and ensure a minimum economization of 7% (seven percent) of the capital, thus creating conditions to ensure full implementation of the investment program for the whole of 1994.
Article 15.- The Ministry of Construction is assigned the task of assuming the main role in studying and drafting, in collaboration with the State Planning Committee, the Ministry of Finance and the concerned agencies, the Statute on Management of Investment and Construction in replacement of the current Statute together with other accompanying documents in conformity with the new mechanism and submit it to the Government within the second quarter of 1994.
THE PRIME MINISTER
Vo Van Kiet