Circular 06/1999/TT-BKH guiding the contents of Total investment, investment project appraisal dossiers and investment reports issued by the Ministry of Planning and Investment

CIRCULAR

GUIDING THE CONTENTS OF TOTAL INVESTMENT, DOSSIERS ON INVESTMENT PROJECT EVALUATION AND INVESTMENT REPORTS

In execution of the provisions of the Regulation on Investment and Construction Management issued together with the Government's Decree No.52/1999/ND-CP of July 8, 1999 (hereafter referred to as the Investment and Construction Management Regulation for short), the Ministry of Planning and Investment provides the following guidance on the contents of total investment, dossiers on investment project evaluation and investment reports:

I. TOTAL INVESTMENT CAPITAL

1.1. According to Clause 7, Article 7 of the Investment and Construction Management Regulation, the total investment is the total investment and construction expenses (including the initial production capital), which is also the maximum expense level of a project determined in the investment decision.

1.2. Total investment:

a/ Capital for investment preparation includes the expenses for:

- Investigation, survey and study in service of the elaboration of pre-feasibility and feasibility study reports:

- Elaboration of the pre-feasibility study and feasibility study reports (including consultancy) investment report (if the project is under Section III below):

- Project evaluation fee.

b/ Capital for preparation for investment project execution includes the expenses for:

- Capital arrangement (in case of foreign-capital borrowing accepted by the State Bank);

- Bidding for project execution and bid consideration;

- Services on technical consultancy, consultany in support of construction management, supervision and cousultancy;

- Technological transfer, initial technical support;

- Construction design survey;

- Designing and evaluation of design;

- Making the total cost estimates and evaluation of the total cost estimates;

- Compensation for ground clearance.

- Resettlement related to ground clearance compensation incurred by the project (if any)

- Ground preparation;

c/ Capital for investment execution includes:

- Equipment expense;

- Construction and equipment installation expense;

- Other expenses for:

+ Use of land surface and water surface

+ Training

+ Elaboration of the plan for fire and explosion prevention and combat according to the regulations on fire prevention and fighting;

d/ Production preparation expenses: Expenses for raw materials, fuels and materials as well as labor for unloaded and loaded test run, minus the recovered product value);

e/ Pre-acceptance test;

f/ Interests on the investor's loans during the time of investment execution, which are determined through credit contract(s);

g/ Initial working capital for production (for production projects) as stipulated by the Finance Ministry;

h/ Expenses for project insurance according to the stipulations of the Finance Ministry;

i/ Reserves;

j/ Project management;

k/ Prescribed taxes;

l/ Evaluation and approval of the final account settlement.

For a number of Group A projects with special requirements permitted by the Prime Minister, the total investment shall also include expenses for scientific and technological research related to the project. The expense level shall be decided by the Prime Minister for each project.

1.3. The total investment shall be increased only in the following cases:

a/ Changes in the investment and construction prices due to the new regulations issued by the Government;

- Change in the electricity and water prices, land rents and freights;

- Change in the labor cost;

- Change or addition of charges and taxes

b/ Change of the exchange rate between Vietnam dong and foreign currency(ies), for project items using foreign currency(ies) (if the total investment clearly states the amount of foreign currency(ies)).

c/ Force majeure cases, including:

- Objective force majeure cases such as natural calamities, enemy sabotage, fires.

- Failure to ensure the capital mobilization capability or to keep to the capital allocation schedule (for State budget capital and State investment credit capital ), which is not due to the investor's faults.

II. DOSSIERS ON INVESTMENT PROJECT EVALUATION

A. Dossiers proposing the evaluation of pre-feasibility study reports (called the pre-feasibility report for short): A dossier proposing the evaluation of a project's pre-feasibility report shall be considered valid if it includes the following:

1. The investor's report to the Prime Minister, if is a Group A project; or to the person competent to decide the investment, if it is a Group B project (in case such Group B project requires a pre-feasibility study report).

2. The pre-feasibility report, which is made with the contents stipulated in Article 23 of the Investment and Construction Management Regulation as well as the specific contents suitable to each economic technical branch;

3. The effective legal documents certifying the investors legal person status and financial capability;

4. The legal documents certifying the projects conformity with the branch and local plannings;

5. The other legal documents related to the project (if any).

B. Dossiers proposing the evaluation of feasibility study reports (called as the feasibility report for short) : A dossier proposing the evaluation of a project's feasibility study report shall be considered valid if it fully meets the following conditions:

1. For Group A projects:

1.1. For non-BOT projects

a/ The investor's report to the Prime Minister;

b/ The written approval of the pre-feasibility study report;

c/ The opinions of the direct managing agency (the ministry, provincial/municipal People's Committee or chairman of the Managing Board of the State corporation) to the Prime Minister, clearly, stating the investment plan, its conformity with the planning, the project's contents, remarks, assessments and proposals with regard to the investor and the project;

d/ The opinions of the relevant ministries, branches and localities according to their respective functions and management competence.

e/ The evaluation opinions of the investment capital lending organization, for a project using loan capital, on the project's financial efficiency, the capability of loan provision for the project and the proposals on the project management mode when different capital sources are used mixedly by the project;

f/ The effective legal documents certifying the investor's legal person status and financial capability, and other necessary documents such as the land use right certificate, the written approval of the planning, the written permissions of the Government, agreements, contracts and/or treaties (depending on the characteristics of each project);

g/ The feasibility report, which is made with the contents stipulated in Article 24 of the Investment and Construction Management Regulation, and contents suitable to each economic-technical branch.

The agency submitting the dossier for approval shall take responsibility for the project quality.

1.2. For BOT projects.

a/ The reports of the investor and the competent State agency;

b/ The feasibility report, which is made with the contents stipulated in Article 24 of the investment and Construction Management Regulation, and contents suitable to each economic-technical branch.

c/ The opinions of the direct managing agency provided for in Point 1.1. above;

d/ The already initialed contract;

e/ The sub-contracts (if any).

f/ The draft charter of the company, if it is a newly set up company; or the supplemented charter of the company, if it is an operating company;

g/ The effective legal documents certifying the investor's legal person status and financial capability, and other necessary legal documents such as the land use right certificate, the written approvals of the competent State agencies, the written permissions of the Government, agreements, contracts and/or treaties (depending on the characteristics of each project).

h/ The opinions of the relevant agencies investor organizations on matters falling under their competence or related to their interests;

i/ The evaluation opinions of the investment capital lending organization, for a project using loan capital, on the project's financial efficiency, the capability of loan provision for the project and the proposals on the project management mode when different capital sources are used mixedly by the project;

The dossier proposing the evaluation of the project's feasibility report shall be compiled by the investor for submission to the investment deciding level and sent to the Ministry of Planning and Investment for evaluation.

2. For Group B and C projects:

2.1. For projects other than the BOT, BTO and BT ones, the dossier shall include.

a/ The investor's report to the agency competent to decide the investment;

b/ The opinions of the direct managing agency on the investment plan, its compatibility with the planning, the project's contents, remarks, assessments and proposals;

c/ The opinions of the relevant agencies according to their functions and competence;

d/ The evaluation opinions of the investment capital lending organization, for project using loan capital, on the project's financial efficiency, capability of loan capital provision for the project and proposal on the project management mode, when different capital sources are used mixedly by the project;

e/ The effective legal documents certifying the investor's legal person status and financial capability, and other necessary documents such as the land use right certificate, the written approvals of the planning by the competent agencies, the written permissions of the Government, agreements, contracts and/or treaties (depending on the characteristics of each project).

f/ The feasibility study report, which is made in conformity with the provisions of Article 24 of the Investment and Construction Management Regulation. The investment report, which is made, with the contents defined in Section III of this Circular.

The agency submitting the dossier for approval shall take responsibility for the quality of the feasibility report (or the project's investment report).

2.2. For BOT projects of Groups B and C, the provisions of Clause 1.2 above shall apply.

3. The investor shall take full responsibility for the accuracy and legality of information, data and documents attached to the project dossier.

The agencies directly managing the investor and the relevant agencies shall take responsibility for their opinions on the project.

III. INVESTMENT REPORT

1. Projects which require only the elaboration of investment reports include:

- Projects capitalized at under VND1 billion each;

- Projects on the repair and/or maintenance using non-business capital;

- Branches' projects with model designs and technical criteria already ratified by the branch-managing ministries on the basis of the overall planning for each region.

2. An Investment report's contents include:

a/ The determination of investor:

It is necessary to determine the investor (State agency, enterprise or individual), clarifying the following:

- The investor's legal person status (with written certification on his/her/its legal person status);

- The investor's financial capability (with written certification).

b/ The investment necessity and objectives:

- The explanation on the investment necessity;

- The project's development objectives: The cultural, educational, agricultural, industrial and service objectives;

- The project's direct objectives (for a production project, it is necessary to point out whether the products are to be domestically consumed or exported, for profit making or for other purposes;

c/ Products or services: Explanation on the types of products and services of the project.

d/ Forms of investment and capacity:

- Investment in construction, intensive investment, upgrading, expansion or maintenance of the existing establishment;

- Determination of the capacity;

c/ Equipment and machinery: Their names, quantity, origins and value must be stated clearly;

f/ Sources of the supply of fuels, semi-finished products and other inputs.

g/ The saleability of products or services;

h/ The location and land area;

- The construction location and its compatibility with the planning;

- The total land area, the site plan and documents certifying the laud use right;

- The ground status and expenses for ground clearance compensation (if any).

i/ The construction project items and volumes; the major technical requirements of each item, forms and unit prices set by branches and localities applicable to the project (for dwelling houses, schools and infirmaries the Ministry of Construction's forms shall apply; for land roads the Ministry of Communications and Transport's forms shall apply; for irrigation, the Ministry of Agriculture and Rural Development's norms shall apply).

j/ Investment capital:

+ Demand for investment capital: The investment capital shall be calculated on the basis of the work volume and unit prices (set by the ministries and localities) and divided for construction and installation, equipment and other capital construction works (if any).

+ Investment capital sources:

The investment capital sources must be clearly determined:

+ State budget capital;

+ Credit loan capital, or

+ Capital mobilized by the investor or contributed by the people.

k/ Conclusions on the project:

- The economic and social efficiency;

- The debt repayment capability;

- The environment: The positive and negative impacts

l/ Proposals on the preferential policies for the project:

- Privileges during the investment execution;

- Post-investment privileges.

This Circular takes effect 15 days after its signing.

In the course of implementation, if any supplements and/or amendments arise, the ministries and localities and requested to promptly report them to the Ministry of Planning and Investment for adjustment.

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