ASSESSMENT OF PUBLIC INVESTMENT PROJECT IN VIETNAM

A public investment project means a project that uses all or part of the capital from the state budget, capital from lawful revenue sources of state agencies or public non-business units for investment in accordance with the Law. Public investment project activities include many stages toward a complete project. In particular, accessible activities play an important role in making decisions at each stage. For customers to understand the activities of public investment project assessment, let’s find out some information through the following essay with NPLaw.

I. What does an assessment of public investment projects mean?

Assessment of a public investment project is the process of conducting an objective, scientific, and comprehensive check, along with consideration for the project's primary contents, toward an assessment of the project’s reasonableness, effectiveness, and feasibility. Such primary content includes the content of economics, technology, society, environment, politics, law, etc., corresponding to standards, norms, and provisions that the state stipulates. Assessment of public investment projects aimed at investment policy decision; programmed decision, investment project, consideration, and implementation of the plan; etc. Therefore, the assessment of public investment projects is considered a surveying stage that creates the basis for providing accurate decisions for a public investment project.

NPLaw will provide the following examples to help the client better understand this issue:

1. The assessment of the public investment project 

For instance:

X Company, as a State Enterprise, is making Y investment project; before providing an investment policy decision, it shall go through the project assessment step, in particular:

• The company’s great advantage is over 10 operating years in this investment sector, the company has built good relationships with provinces across the country and has prestige;
• The company’s members of the executive board have almost as much experience in technology, management, etc;
• The company’s operating situation is stable. Besides, the company has successfully executed some of the projects corresponding to these in another area;
• The company’s human resources are currently plentiful and appropriate to operate the project;
• For the Y project, this project has a location that locates nearly infrastructure headworks and arterial traffic of the nation and city, so it is extremely advantageous for investment;
• Other issues, such as the company's tax payment situation, source of funds for implementing projects, profit rate, etc., are also considered objectively and scientifically.

According to the above assessment result, the competent authority can make an appropriate investment policy decision.

The State has proposed specific and clear provisions on many different legal documents towards the guidance of implementing activities of public investment project assessment. Pursuant to those legal documents, competent subjects can easily apply to decrease the fault resulting in the project implementation process.

    II.  Regulation on public investment project assessment

• Currently, according to the issues related to public investment project assessment, such as assessment costs and the establishment of an Assessment Council; the subjects have the right to assess each public investment project group as defined by the Law on Investment 2019. 
• Besides, the issues relating to procedure, order, application, and assessment time in accordance with Decree No. 40/2020/ND-CP stipulating execution of some of the provisions of the Law on Public Investment.

According to the legal documents listed above, the subjects relating to public investment project assessment can know what the assessment procedure includes and how those contents are made.

     III.  Procedure for public investment project assessment

1. Content of the public investment project assessment

Pursuant to Clauses 4, 5, and 6, Article 18 of Decree No. 40/2020/ND-CP, the contents of the public investment project assessment don’t have a building component, including:

• Compliance with the provisions of the law in application content for assessment
• The project’s appropriateness with the project investment policy that is granted by the competent authority; 
• The contents of the project’s feasibility study report as defined by Clause 2, Article 44 of the Law on Public Investment;
• The compatibility between the project’s total investment amount and the capital balance in the medium-term and annual public investment plans; the structure of investment capital, the ability to balance public investment capital, and mobilization of other capital and resources for project implementation; assessment of operating costs, maintenance expenses, and major repair costs during the project’s exploitation;
• The project’s spillover effect on the development of industries, sectors, territories, and localities; the creation of budget revenue, working, income, and people’s life; environmental impacts and sustainable developments,

The content of the public investment project assessment has building components in accordance with the law on construction, contents of the Law on Construction are not specified in Clause 4, Article 18, or otherwise required by relevant law.

During the assessment of the public investment project with the contents specified in Clauses 4 and 5 of Article 18, the Assessment Council or competent Leading Agency shall review and compare it with the provisions in the investment policy decision that is granted by competent authorities; the criteria on the scale, the project’s total investment amount, and inclusion in the capital structure that does not exceed the level as defined by the investment policy decision.

If it is necessary to adjust the project investment policy, the assessment of public investment projects shall be implemented according to Article 34 of the Law on Public Investment and Clause 11 of Decree No. 40/2020/ND-CP.

2. Applications for public investment project assessment

Pursuant to Clauses 1, 2, and 3, Article 18 of Decree No. 40/2020/ND-CP, Applications for public investment project assessment that don’t have the building components shall be as required:

• The project assessment report, including the necessity of project investment, goal, and primary contents of a project’s feasibility study report; the proposal of the competent authority to decide on the public investment project;
• Project’s feasibility study report as described by Article 44 of the Law on Public Investment;
• Report of the Vietnamese Fatherland Front at all levels synthesizing the residential communities’ opinions for where the projects are implemented for projects as prescribed in Article 74 of the Law on Public Investment;
• Otherwise relevant documents for public investment project assessment (if any).

  Applications of public investment project assessment having the building components according to the law on construction, the residential communities' opinions are required in point c, Clause 1, Article 18, and otherwise provided by relevant law.

The number of assessment applications that shall be sent to the Assessment Council or the competent Leading Authority is 10 sets.

3. The procedure for public investment project assessment

Pursuant to the Law on Investment 2019, the procedure for public investment project assessment has the following steps:

• According to which group the public investment project depends on, the competent authority shall establish an Assessment Council or assign functional units to assess.
• According to the contents of the assessment, the Assessment Council or functional units shall conduct the assessment.
• Submission of the assessment’s result to the competent authority for providing the project’s decision.

Through the above requirements, we can understand the importance of assessment for public investment projects. Therefore, why do we need assessment, and what are the benefits of it?

    IV.  Why is it necessary to assess public investment projects?

• Assessment of public investment projects guarantees the information’s authenticity and the project’s effectiveness before submitting it to the competent authorities for assessment. Project assessment is also the basis for selecting investment options, establishing and operating investment plans, and monitoring the project implementation process.
• Besides, assessment helps to consider the socio-economic benefits brought by the project. Whether these benefits are consistent with the socio-economic development goals and strategies of the country and locality or not.
• The assessment result is the basis for finding advantageous investment opportunities, avoiding risks, and minimizing opportunity costs.

In addition to the issues of contents, applications, and processes, the assessment of public investment projects must also comply with the provision of implementation time.

   V.  How is the assessment period for public investment projects done?

Pursuant to Article 19 of Decree No. 40/2020/ND-CP, the assessment time for public investment projects is as follows:

• Assessment time for public investment projects doesn’t have a building component from the date the assessment leading authority receives fully valid documents, as follows:
•   Group A project: No more than 45 days;   
•   Group B and C projects : No more than 30 days;   

In case the document is invalid or the contents of the feasibility study report on the program or project don’t comply with Article 44 of the Law on Public Investment, within 10 days from the date of receiving the documents, the Assessment Council or Assessment Leading Authorities shall have a written suggestion and send it to assessing authority to supplement the documents or complete the contents of the feasibility study report on the program, or project.

• Assessment time for public investment projects with building components shall comply with the law on construction.
• The time for internal assessment shall be prescribed by the Heads of Ministries, Central Agencies, and the President of the People’s Committees at all levels.

These are all information relating to the assessment of public investment projects provided by NPLaw. Please do not hesitate to contact us if you have any relevant questions. NPLaw is always ready to answer questions in many different sectors.

NPLaw

Ho Chi Minh office – Headquarters: 139H4 Ly Chinh Thang, Vo Thi Sau Ward, District 3, Ho Chi Minh City.

Nha Trang Office (Branch): 20, 1B Street, Le Hong Phong Urban Area, Phuoc Hai Ward, Nha Trang City, Khanh Hoa Province.

Da Lat Office (Branch): 266 Hai Ba Trung, Ward 2, Da Lat City, Lam Dong Province.

Ha Noi Office (Branch): CT13B, VietNam Bar Federation Building, Vo Chi Cong Street, Tay Ho District, Ha Noi City.

Hotline: 0913449968

Email: legal@nplaw.vn

CÔNG TY LUẬT TNHH NGỌC PHÚ

Customer service: 19009343

Hotline: 0913 41 99 96

Email: legal@nplaw.vn