Circular No. 02/2016/TT-BKHDT dated March 01, 2016 of the Ministry of Planning and Investment guiding the preliminary project selection, establishment, appraisal and approval for project proposal, and feasibility study report on investment project under form of public-private partnership

CIRCULAR

Guiding the preliminary selection of investment projects to be implemented in the form of
public-private partnership and formulation, appraisal and approval of project proposals and feasibility study reports[1]

Pursuant to June 18, 2014 Law No. 49/2014/QH13 on Public Investment;

Pursuant to November 26, 2014 Investment Law No. 67/2014/QH13;

Pursuant to November 26, 2013 Bidding Law No. 43/2013/QH13;

Pursuant to June 18, 2014 Construction Law No. 50/2014/QH13;

Pursuant to the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on investment in the form of public-private partnership;

Pursuant to the Government’s Decree No. 116/2008/ND-CP of November 14, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Planning and Investment;

The Minister of Planning and Investment promulgates the Circular guiding the preliminary selection of investment projects to be implemented in the form of public-private partnership and formulation, appraisal and approval of project proposals and feasibility study reports.

Article 1. Scope of regulation and subjects of application

1. This Circular guides the preliminary selection of investment projects to be implemented in the form of public-private partnership (PPP) specified in Article 1 of the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on investment in the form of public-private partnership, and formulation, appraisal and approval of project proposals and feasibility study reports.

2. This Circular applies to agencies, organizations and individuals engaged in the preliminary selection of PPP projects and formulation, appraisal and approval of project proposals and feasibility study reports.

Article 2. Interpretation of terms

1. PPP project means an investment project in the PPP form.

2. Project-preparing unit means a unit assigned by a ministry, ministerial-level agency or provincial-level People’s Committee to elaborate the proposal and feasibility study report for a project and fulfill other related tasks.

3. Unit acting as the focal point in appraising project proposals and feasibility study reports (below referred to as appraising unit) means a unit established or assigned to act as the focal point in managing PPP activities according to Clause 2, Article 7 of Decree No. 15/2015/ND-CP.

4. Project proposal means a report formulated according to Clause 11, Article 3 of Decree No. 15/2015/ND-CP. For a project to be implemented with state investment capital, its proposal shall be equivalent to a prefeasibility study report (for group-A projects) or an investment policy proposal report (for group-B and -C projects) in accordance with the law on public investment.

Article 3. Preliminary selection of projects

1. Principles of preliminary selection of projects

a/ Preliminary selection aims to accurately identify infrastructure, procurement and public services projects to be studied for investment in the PPP form;

b/ Preliminarily selected projects must satisfy the criteria specified in Clause 2 of this Article.

2. Criteria for preliminary selection of projects

a/ A preliminarily selected project must fully satisfy the following criteria:

- To be in line with relevant sectorial and regional development master plans and plans and local social-economic development plans;

- To be suitable to the investment fields specified in Article 4 of Decree No. 15/2015/ND-CP and be the priority project of a ministry, ministerial-level agency or provincial-level People’s Committee;

- To be capable of generating revenue to recover capital to investors.  Priority will be given to projects earning revenue from business operations.

b/ In addition to the criteria prescribed at Point a of this Clause, based on the degree of information disclosure of each project, the following criteria may be additionally considered for a project to be given with priority in preliminary selection:

- There are investors showing interest in the project;

- There is a great demand for the service provided by the project;

- There exist favorable conditions for investment in the project (ground clearance work has been completed; supporting and connection facilities have been built; raw materials, fuels, supplies, machinery and technologies are available on the market);

- Other related elements (if any).

3. Organizations under ministries and ministerial-level agencies; and specialized agencies under provincial- or district-level People’s Committees shall proactively study projects according to Clauses 1 and 2 of this Article, and propose ministers, heads of ministerial-level agencies or provincial-level People’s Committee chairpersons to permit the formulation of project proposals.

4. Based on the approval for formulation of project proposals in the PPP form specified in Clause 3 of this Article, competent agencies shall allocate public investment funds or other lawful capital sources for formulation, appraisal and approval of project proposals and feasibility study reports in accordance with the law on public investment.

Article 4. Formulation, appraisal and approval of project proposals under Section 1, Chapter III of Decree No. 15/2015/ND-CP

1. Detailed process

a/ Formulating project proposals;

b/ Appraising project proposals;

c/ Proposing and approving policies on use of state investment capital for project implementation (if any);

d/ Approving project proposals;

dd/ Announcing projects.

2. Formulation of a project proposal

a/ Based on the guidance in Appendix I to this Circular, the project-preparing unit shall formulate the project proposal as specified in Article 16 of Decree No. 15/2015/ND-CP. For a project with construction components, the project proposal must contain a preliminary design (or a basic design, for group-C projects) as prescribed by the construction law. For a project without construction components, the project proposal must contain a preliminary design (or a basic design, for group-C projects) as prescribed by specialized laws;

b/ The project-preparing unit shall submit 1 set of the project proposal dossier to the minister, ministerial-level agency head or provincial-level People’s Committee chairperson; and at the same time send 4 sets of the dossier to the appraising unit.

c/ A project proposal dossier must comprise:

- A written request for approval of the project proposal, covering legal bases for formulation of the project proposal, explanations about main contents of the project proposal and recommendations;

- The draft project proposal;

- Competent persons’ approval for formulation of the project proposal in the PPP form;

- Relevant papers and legal documents.

3. Appraisal of a project proposal

a/ The appraising unit shall receive the project proposal dossier from the project-preparing unit and conduct the appraisal according to Points b, c, d and dd of this Clause;

b/ The appraising unit shall consult in writing agencies and units related to the project proposal and, when necessary, may hold appraisal meetings. The appraising unit shall seek opinions on the preliminary design (or basic design for group-C projects) from a construction agency in accordance with the construction law, for projects with construction components, or from a specialized agency in accordance with specialized laws, for projects without construction components;

c/ Based on the guidance in Appendix II to this Circular, the appraising unit shall formulate an project proposal appraisal report. A project proposal to be recommended by the appraising unit for approval must fully meet the conditions specified in Article 15 of Decree No. 15/2015/ND-CP;

d/ The appraising unit shall submit a project proposal appraisal dossier to the minister, ministerial-level agency head or provincial-level People’s Committee chairperson. A dossier must comprise:

- A project proposal appraisal report;

- The draft project proposal;

- Relevant papers and legal documents.

dd/ The time limit for appraisal of a project proposal is 25 days from the date of receiving a complete dossier, excluding the time for approving the policy on use of state investment capital specified in Clause 4, Article 17 of Decree No. 15/2015/ND-CP.

4. For projects using the State’s investment capital, ministries, ministerial-level agencies and provincial-level People’s Committees shall propose competent agencies to approve policies on use of state investment capital for project implementation in accordance with the law on public investment.

5. Approval of a project proposal

a/ Based on the project-preparing unit’s project proposal dossier, the appraising unit’s appraisal dossier, and a competent agency’s decision on the policy on use of state investment capital for project implementation in accordance with the law on public investment (if any), the minister, ministerial-level agency head and provincial-level People’s Committee chairperson shall approve the project proposal within 5 days. For projects subject to investment policy approval by ministers, heads of ministerial-level agencies or provincial-level People’s Committee chairpersons as decentralized by the law on public investment, project proposals may be approved together with the policy on use of state investment capital for project implementation;

b/ A project proposal approval decision must have the following principal contents:

-  Name of the project;

- Name of the state agency competent to sign the contract with the investor;

- Name of the project-preparing unit;

- Location, size and capacity of the project, land area;

- Technical requirements;

- Total estimated investment capital;

- State investment capital for project implementation (if any);

- Type of project contract;

- Preliminary financial plan;

- Term of project contract;

- Investment incentives and guarantees;

- Other contents.

6. Ministries, ministerial-level agencies and provincial-level People’s Committees shall announce projects under Article 18 of Decree No. 15/2015/ND-CP. Information to be published and information publishing order must comply with the bidding law.

Article 5. Formulation, appraisal and approval of project proposals under Section 2, Chapter III of Decree No. 15/2015/ND-CP

1. Detailed process

a/ Formulating project proposals;

b/ Appraising project proposals;

c/ Approving project proposals;

d/ Reaching agreement on the assignment of the task of formulating the feasibility study report to investors;

dd/ Announcing project proposals.

2. Formulation of a project proposal

a/ The investor shall elaborate a project proposal under Point a, Clause 2, Article 4 of this Circular;

b/ The investor shall send 1 set of the project proposal dossier to the ministry, ministerial-level agency or provincial-level People’s Committee, and 1 set of the dossier to the unit acting as the focal point in managing  PPP activities;

c/ The project proposal dossier must comprise the documents specified in Clause 2, Article 21 of Decree No. 15/2015/ND-CP.

3. The process of appraisal and approval of project proposals formulated by investors must comply with Clauses 3 and 5, Article 4 of this Circular.

4. For projects to be funded with official development assistance (ODA) and concessional loans of foreign donors specified in Clause 3, Article 11 of Decree No. 15/2015/ND-CP, before approving project proposals, ministries, ministerial-level agencies or provincial-level People’s Committees shall propose competent agencies to approve policies on use of state investment capital for project implementation in accordance with the law on public investment and signed international agreements.

5. Ministries, ministerial-level agencies and provincial-level People’s Committees shall reach agreement with investors on contents related to the assignment of the task of formulating feasibility study reports to investors. Such agreement must be made in writing as specified in Clause 3, Article 24 of Decree No. 15/2015/ND-CP.

6. Ministries, ministerial-level agencies and provincial-level People’s Committees shall announce approved project proposals and information on investors proposing projects under Article 23 of Decree No. 15/2015/ND-CP. To-be-published information and information publishing order must comply with the bidding law.

Article 6. Formulation, appraisal and approval of feasibility study reports

1. Detailed process

a/ Formulating feasibility study reports;

b/ Appraising feasibility study reports;

c/ Approving feasibility study reports;

2. Formulation of a feasibility study report

a/ Based on the guidance in Appendix III to this Circular, the project-preparing unit or assigned investor shall formulate the feasibility study report under Clause 1, Article 25 of Decree No. 15/2015/ND-CP, except for group-C projects;

b/ The project-preparing unit or investor assigned to formulate  the feasibility study report shall submit a set of the feasibility study report approval dossier to the ministry, ministerial-level agency or provincial-level People’s Committee and concurrently send 4 sets of the dossier to the appraising unit;

c/ A dossier for approval of a feasibility study report must comprise:

- A written request for approval of the feasibility study report, covering bases for requesting the approval of the feasibility study report, explanations about main contents of the report and recommendations;

- The draft feasibility study report;

- The written agreement between the ministry, ministerial-level agency or provincial-level People’s Committee and the investor (in case the project is proposed by the investor);

- The decision approving the project proposal;

- The project proposal appraisal document;

- Relevant papers and legal documents.

3. Appraisal of a feasibility study report

a/ The appraising unit shall receive the feasibility study report approval dossier from the project-preparing unit or investor and appraise the report according to Points b, c and d of this Clause;

b/ The appraising unit shall consult in writing related agencies and units on the feasibility study report and, when necessary, may hold  appraisal meetings. The appraising unit shall seek opinions on the project’s basic design from a construction agency in accordance with the construction law, for projects with construction components, or a specialized agency in accordance with specialized laws, for projects without construction components;

c/ Based on the guidance in Appendix IV to this Circular, the appraising unit shall formulate a report appraising the feasibility study report with the contents specified in Clause 3, Article 26 of Decree No. 15/2015/ND-CP;

d/ The appraising unit shall submit the feasibility study report appraisal dossier specified in Clause 2, Article 26 of Decree No. 15/2015/ND-CP to the minister, head of ministerial-level agency or provincial-level People’s Committee chairperson within the appraisal time limit specified in Clause 4, Article 26 of Decree No. 15/2015/ND-CP.

4. Approval of a feasibility study report

a/ Based on the dossier of request for approval of the feasibility study report of the project-preparing unit or investor and the project appraisal dossier of the appraising unit, the minister, ministerial-level agency head or provincial-level People’s Committee chairperson shall approve the feasibility study report;

b/ A decision approving a feasibility study report must comprise the following principal contents:

-  Name of the project;

- Name of the state agency competent to sign the contract with the investor;

- Name of the project-preparing unit or investor assigned to formulate the feasibility study report;

- Location, size and capacity of the project, land area;

- Detailed technical requirements;

- Total investment capital;

- State investment capital for project implementation (if any);

- Type of project contract;

- Financial plan;

- Term of project contract;

- Investment incentives and guarantees;

- Other contents.

Article 7. Application of appendices

1. Appendices to this Circular are formulated on the basis of regulations on investment in the form of PPP with reference to international practices in order to create favorable conditions for parties to involve in the preparation for PPP projects, assure consistency in contents of project proposals and feasibility study reports and serve as a basis for selection of investors and negotiation and conclusion of project contracts.

2. When formulating, appraising and approving project proposals and feasibility study reports of PPP projects, organizations and individuals shall apply appendices to this Circular and, depending on the nature, scale and field of each specific project, supplement explanations about the project’s feasibility and efficiency in particular conditions.

Article 8. Organization of implementation

1. This Circular takes effect on April 18, 2016.

2. Ministries, ministerial-level agencies, government-attached agencies, other central agencies, People’s Committees at all levels, and related organizations and individuals shall implement this Circular.

3. Any problems arising in the course of implementation should be reported by ministries, ministerial-level agencies, government-attached agencies, other central agencies, People’s Committees at all levels, and related organizations and individuals to the Ministry of Planning and Investment for timely consideration and settlement.-

Minister of Planning and Investment
BUI QUANG VINH

* All appendices to this Circular are not translated.