CIRCULAR

GUIDING FORMS OF MANAGEMENT OF INVESTMENT AND CONSTRUCTION PROJECT EXECUTION AND REGISTRATION OF CONSTRUCTION ACTIVITIES

Pursuant to the Government’s Decree No.15/CP of March 4, 1994 on the functions, tasks, powers and organizational structure of the Ministry of Construction;
Pursuant to the Investment and Construction Management Regulation issued together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999;
The Ministry of Construction hereby provides guidance on the forms of project execution management and registration of construction activities as follows:

I. FORMS OF MANAGEMENT OF INVESTMENT AND CONSTRUCTION PROJECT EXECUTION

1. Forms of project execution management:

1.1. Pursuant to Article 59 of the Investment and Construction Management Regulation issued together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999 (hereinafter called the 52/CP Investment and Construction Management Regulation for short): Depending on the scale and nature of the project and his/her capability, the investor shall opt for one of the following forms of project execution management:

- The direct management of project execution by the investor

- The administration of the project by the manager

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- Self-execution of the project

1.2. The organization and registration of construction activities of the forms of project execution management shall comply with the 52/CP Investment and Construction Management Regulation and this Circular.

1.3. The project execution management expenses shall comply with the Construction Minister’s Circular No.08/1999/TT-BXD of November 16, 1999.

2. Responsibilities for project execution management:

2.1. The investor, irrespective of form of project execution management he/she applies, shall take full responsibility before law and the person competent to decide investment for the course of execution of the project.

2.2. The project execution managing organization shall take responsibility before the investor and law according to the tasks assigned by the investor or the contract signed with the latter. In case of the change of the project execution managing organization, the new organization shall have to take over the entire work of the former managing organization.

3. Form of direct management of project execution by the investor:

3.1. This form shall apply to investors who have full professional capability for project execution management.

3.2. The investor may use his/her own apparatus with full professional capability and appoint persons to manage project execution without setting up the project management board.

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The organizational structure and head of the project management board shall be decided by the investor. After the completion of the project, the project management board must be dissolved.

3.4. Tasks of the project management board:

On the basis of his/her responsibilities and powers defined in Article 14 of the 52/CP Investment and Construction Management Regulation, the investor shall assign tasks to the project management board according to the following principles:

- The tasks and powers assigned to meet the project execution management requirements must be transparent, conforming to the statute of operation and organization principles of the investor as well as the provisions of law.

- The project management board shall effect the regime of regular reporting towards the investor. The investor shall be staffed with inspect the operations of the project management board and promptly handle matters beyond the latter’s competence so as to ensure the tempo and requirements of the project.

3.5. Requirements on the project management board’s capabilities:

The project management board must have suitable professional forces to manage the project execution and register its operations at the competent State agency.

The heads of the management boards of Group A or B projects must have university or higher-level degrees as well as professional qualifications suitable to the project execution management task, and must go through training courses on project management.

4. Form of project administration by the manager:

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4.2. The form of project management by the manager shall apply to the following cases:

a/ The projects assigned by the Government to the ministries, ministerial-level agencies, agencies attached to the Government and provincial-level People’s Committees for execution management; the projects assigned by the provincial-level People’s Committees to the provincial/municipal Services and Districts for execution management; and the particularly important projects decided by the Prime Minister. The above-mentioned agencies shall assign the specialized project administration boards to directly manage the project.

b/ For other projects, if the investor has no conditions to directly manage the project execution, he/she shall have to hire a professional organization fully capable of managing the project. The organization managing the project execution in this case is called the "project management consulting organization".

4.3. Contents of project administration:

a/ The project administration board shall realize the management contents according to its assigned tasks.

b/ The project management consulting organization shall realize the management contents according to the contract signed with the investor.

4.4. Requirements on capabilities for the form of project administration by the manager:

a/ The project administration board and its director must have the minimum capabilities as provided for the project management board and its head in Item 3.5 above.

b/ The project management consulting organization may contract for administration of projects suited to its capabilities and construction activities already registered at the competent State agency.

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5.1. The form of turn-key project shall apply when the investor is allowed to organize bidding to select the contractor for the performance of the entire project from the survey, designing and procurement of supplies and equipment to the construction and installation till the project is handed over and put into exploitation and use.

For projects using capital sources defined in Articles 10 and 11 of the 52/CP Investment and Construction Management Regulation, this form shall only apply to Group C projects; for other cases, the Prime Minister’s permission is required.

5.2. The investor shall have the responsibility:

a/ To choose the consulting organization to carry out the work of investment preparation till the project is ratified and opened to bidding.

b/ To perform the contract signed with the contractor.

c/ To ensure capital for payment according to plan and economic contract.

d/ To organize the ground clearance and hand over the ground to the contractor according to the provisions of the 52/CP Investment and Construction Management Regulation.

e/ To perform other functions and tasks assigned by the investor according to law.

5.3. The contractor shall have the responsibility:

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b/ Where the project is subcontracted, the commitments in the bid dossier and contract must be strictly abided by.

c/ To take full responsibility for the quality of the construction work and project execution course till the project is handed over to the investor for exploitation and operation; to implement the project warranty and insurance regimes as prescribed by law.

6. Form of self-execution of the project:

6.1. The investor with full capability for production, construction and management, suited to the project execution requirements may apply the form of self-execution of the project.

This form shall apply to:

- Projects using lawful capital of the investor, including the self-procured capital (capital accumulated from the enterprise’s after-tax profit), the self-borrowed and self-repaid capital without the State’s guaranty, and capital mobilized from other sources;

- The regular maintenance of construction works and production equipment; the annual tending of plants.

6.2. When applying the form of self-execution of the project (self-production, self-construction), the investor shall have to strictly supervise the production and construction and take responsibility before law for the quality of the products and construction works.

6.3. The investor may use his/her own management apparatus or the project management board under his/her personal charge for management of project execution, and observe law provisions on the control of the quality of products and construction works.

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1. Subjects of registration of construction activities:

1.1. According to the provisions of Articles 14, 15 and 16 of the Investment and Construction Management Regulation issued together with the Government’s Decree No.52/1999/ND-CP, the following organizations and enterprises shall have to register construction activities at the competent State agencies:

a/ Organizations managing the project execution in the four forms of project management; where the investor uses his/her own apparatus to directly manage the project execution, such investor shall make the registration.

b/ The investment and construction consulting organizations stipulated in Article 15 and construction enterprises stipulated in Article 16 of the 52/CP Investment and Construction Management Regulation.

1.2. Foreign bid-winning contractors, companies with 100% foreign capital, joint-ventures between Vietnam and foreign countries, which are engaged in construction activities in Vietnam, shall register their construction activities according to separate regulations.

1.3. Enterprises shall register their construction activities before the registration of construction business as well as investment and construction consultancy.

The project execution managing organizations shall, before starting their operations, have to register construction activities according to this Circular.

In the course of operation, if there’s any change in their capabilities or their scope of construction activities are expanded, the additional registration is required.

1.4. Responsibilities of the registration subjects:

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b/ Organizations and enterprises must not conduct construction activities beyond the registered scope.

2. Agencies competent to manage the registration of construction activities:

2.1. The Ministry of Construction shall exercise the function of State management over construction, guide and inspect the organization of registration of construction activities throughout the country; directly organize the registration of construction activities for project execution managing organizations, investment and construction consulting organizations, enterprises engaged in construction activities under the ministries, ministerial-level agencies, agencies attached to the Government, central bodies of political, socio-political and social organizations and corporations set up under the Prime Minister’s decision.

2.2. The provincial/municipal Construction Services shall assist the People’s Committees of the provinces and centrally-run cities in organizing the registration of construction activities for project execution managing organizations, investment and construction consultancy organizations, enterprises engaged in construction activities other than those mentioned in Item 2.1 above and other subjects founded and directly managed by localities under the Construction Ministry’s guidance.

2.3. Responsibilities of the agencies managing the registration of construction activities:

a/ To supply the registration forms and organize the registration of construction activities in strict compliance with the regulations;

b/ To regularly or irregularly inspect the registration of construction activities, to detect violations and handle them according to their competence or propose the handling thereof according to law.

c/ To make biannual and annual reports; the provincial/municipal Construction Services shall submit such reports to the Ministry of Construction so that the latter makes a sum-up report and submits it to the Government.

3. Procedures for registration of construction activities:

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The registration form of construction activities shall be made in two copies, one to be kept by the registration subject and the other by the certifying agency.

The registration subject shall go to the competent agency (the Ministry of Construction or the provincial/municipal Construction Service) to make registration and be provided with detailed guidance so that the registrar may inscribe information according to regulations; then finalize and submit the construction activity registration form to the competent agency for certification. Within 10 days after receiving the valid registration form, the competent agency shall complete the certification of registration of construction activities and send the registration form to the registration subject.

III. EXAMINATION, INSPECTION AND HANDLING OF VIOLATIONS

1. Examination, inspection:

1.1. The construction management agencies of the branches and localities and the agencies certifying registration of construction activities shall have to inspect the implementation of this Circular.

1.2. The construction inspectors of all levels shall inspect the violations of this Circular under decisions of the competent authorities and have to notify such in advance to the inspection objects in accordance with the inspection legislation.

1.3. The examined and inspected subjects shall have to report and supply data at the request of the examining and inspecting agencies according to regulations.

1.4. The examination and inspection must be concluded in writing; if any violations are detected, they must be dealt with according to law.

2. Handling of violations:

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2.2. For organizations and enterprises that fail to register their construction activities or operate beyond the registered scope, thus causing construction incidents, affecting the people�s life and State�s properties, the agencies managing the registration of construction activities and the local construction management agencies shall handle them according to their competence or propose the competent authorities to handle them according to law.

IV. ORGANIZATION OF IMPLEMENTATION

1. Effect:

This Circular takes effect 15 days after its signing and replaces the following legal documents issued by the Minister of Construction: Circular No.18/BXD-VKT of June 10, 1995 guiding the application of the forms of organizing the management of investment and construction projects; Decision No.19/BXD-CSXD of June 10, 1995 promulgating the Regulation on the provision and registration of construction consultancy; and Decision No.500/BXD-CSXD of September 18, 1996 promulgating the Regulation on registration and granting of construction practicing permits.

2. Transitional handling:

2.1. The forms of project execution management decided under Decree No.42/CP of July 16, 1996 and Decree No.92/CP of August 23, 1997 shall continue to comply with the old regulations till the completion of the projects. The forms of project execution management decided under the 52/CP Investment and Construction Management Regulation shall comply with this Circular.

2.2. Organizations and enterprises which have been granted construction practicing certificates or construction consultancy certificates under Decision No. 500/BXD-CSXD of September 18, 1996 and Decision No.19/BXD-CSXD of June 10, 1995 shall be considered as having registered construction activities.

2.3. Enterprises engaged in the construction business and construction consultancy and project managing organizations which are operating but have not registered their construction activities shall make registration according to this Circular before the third quarter of 2000.

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THE MINISTER OF CONSTRUCTION




Nguyen Manh Kiem