Fifth, investment law, legal documents on investment: Investors participating in road development projects and public works must certainly consider the efficiency and profitability of investment. Therefore, the Government must have a necessary legal corridor to limit and share risks, ensuring profits for investors. The problem is not to ensure immediate profits but to ensure that investors avoid subjective risks in the future when putting the project into operation such as risks related to planning and policy mechanisms.
The Investment Law and the recently issued guiding Decree will facilitate investment attraction. However, some forms of investment have not been included in this Law, such as Build - Own - Operate - Transfer (BOOT), Build - Own - Operate (BOO). Therefore, to diversify the forms, the State needs to study and supplement the Law, issue some new Decrees to supplement and replace Decrees 77/CP and 62/CP. This new Decree needs to include sufficient regulations for investment methods in the forms of Build - Operate - Transfer (BOT), Build - Own - Operate - Transfer (BOOT), Build - Own - Operate (BOO).
In addition, the new Decree must amend and supplement provisions that have had many shortcomings in the recent past, such as: clearly defining the equity capital ratio; the role and responsibility of competent State agencies, focal agencies for investment access, specialized management ministries; and consistent implementation procedures with new regulations on investment management.
4.3.2. Perfecting mechanisms and policies for construction investment projects from the state budget in the Vietnamese transport sector
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4.3.2.1 Strengthening decentralization and innovation in authorization in construction investment
According to the current regulations on investment and construction management (according to Decree 52/CP and 12/CP and Decree No. 07/2003/ND-CP dated January 30, 2003),
The decentralization of investment decision-making authority for projects subject to investment from the State budget. However, the decentralization regulations are still lacking in specificity, so project implementation still faces difficulties, prolonging the time and causing loss and waste.
Strengthening decentralization and innovation of authorization in construction investment in projects from the State budget in the direction of decentralization and authorization needs to be more thorough, clear, specific, not maintaining legal status, increasing the rights and responsibilities of all levels, only delegating in cases where decentralization is not possible, specifically:
Firstly, in the same project, if this level or this person has been delegated to make investment decisions, then that level or this person will not be assigned to be the investor; or if this level or this person is the investor, then the investment decision authority will not be delegated. At the same time, specific regulations on investment decision authority for projects with different capital sources are specified.
Second, comprehensively decentralize project approval and bidding plans for group B and C projects to subordinate agencies that are deemed qualified and capable of organizing project implementation (not necessarily the direct subordinate agency as currently stipulated). Decentralization of construction investment decision making must be closely linked to bidding regulations in project implementation organization.
Third, decentralization and delegation of authority must be based on the actual capacity and specific conditions of each agency and unit, in order to promote the initiative and creativity of all levels on the one hand and ensure the quality of management of construction investment projects from the State budget on the other hand.
Fourth , perfecting the regulations on the authority to approve and authorize the approval of technical designs and total estimates of investment projects. The quality of approval of technical designs and total estimates is not only the legal basis, but also the basis for managing and implementing investment projects in terms of both quality and construction costs, and has a direct impact on the investment efficiency of the project. Therefore, the quality
Approval of technical design and total budget greatly affects and directly affects capital loss during the construction investment process.
4.3.2.2. Perfecting the mechanism and policies for project establishment, appraisal and approval
Firstly, investors, state agencies, ministries and state officials must strictly follow the procedures and contents of establishing, appraising and approving construction investment projects from the State budget. Strictly following this procedure is necessary to determine whether the project is effective or not. Relevant entities participating in the implementation must have professional knowledge and practical experience to accurately appraise and approve the project.
Second , strictly regulate, have sanctions and rewards, assign specific and clear responsibilities, forms and levels of handling if organizations and individuals appraising projects report appraisal results that are unscientific, unrealistic, behind schedule compared to regulations, violate state regulations; stipulate that those who decide to approve projects with wrong objectives, beyond authority, inconsistent with reality, causing loss and waste of state budget capital for construction investment projects will be subject to administrative sanctions, material compensation, dismissal, transfer to another job or criminal prosecution if they intentionally cause large losses and waste.
Third , strict regulations on frequent changes, amendments, and supplements to regulations on the establishment, appraisal, and approval of construction investment projects from the State budget in the transport sector, causing confusion and difficulties in monitoring and implementation in practice. Based on the Construction Law and related laws, closely following practice, promulgate decrees and circulars on the establishment, appraisal, and approval of construction investment projects from the State budget in the transport sector to ensure legal and practical requirements.
Fourth , it is specifically stipulated that the officers and civil servants of the agency receiving the appraisal dossiers are responsible for clearly indicating to the investor any missing dossiers or documents right from the first time receiving the dossiers in the decrees or circulars.
instructions of the ministries. Any cadre or civil servant who violates this regulation more than three times in a year will be subject to disciplinary action in accordance with the law on cadres and civil servants. This regulation aims to limit the harassment of cadres and civil servants in appraisal agencies, causing difficulties, wasting time, and missing investment opportunities for investors.
Fifth , issue regulations on administrative sanctions for violations in construction activities in the direction of covering all contents of this activity, supplementing missing contents such as appraisal activities of basic design of the project, appraisal of the project, etc. At the same time, increase the level of sanctions for each violation to be sufficient to deter and repel violations in the management of construction investment projects from the state budget of the investor. The investor is an agency or unit, so the decree also needs to have specific regulations on the form of fines, the responsibility of the head of the investor and related departments and individuals, and what sources are used to pay the fine.
4.3.2.3. Perfecting mechanisms and policies on bidding and contractor selection
Firstly , it is necessary to unify the terms in bidding and construction law to avoid unnecessary confusion and misunderstanding such as the names "feasibility study report" in the bidding law and "construction investment project", "construction investment report", "construction economic and technical report" in the Construction law.
Second , it is necessary to amend Point a, Clause 1, Article 11 of the Bidding Law in the direction of allowing project consulting contractors to participate in bidding for design survey consulting, and design survey consulting contractors to participate in bidding for the next steps. Such regulations are consistent with reality, enhancing the selection of quality contractors to participate in construction investment consulting activities.
Third, regarding bidding direction, amend point d, clause 1, article 21 of the Law on Bidding in the direction of stipulating the cases that can be designated as bidders are: consulting service bidding packages.
The bidding package price should be under three billion VND (six times higher than the old regulation), the bidding package for goods and construction should be under seven billion VND (seven times higher than the old regulation) to be consistent with the situation of price slippage and inflation in recent years. On the other hand, the value of the bidding package that is allowed to be designated for bidding should not be rigidly regulated in the Bidding Law, but these regulations should be assigned to the Government for specific regulation depending on the level of price slippage in the market in each period.
Fourth , tighten discipline in directing and organizing the implementation of bidding work in projects in ministries and branches to limit and push back violations of State regulations on bidding; have specific and strict sanctions for each violation in bidding work.
Fifth , officials, especially the Ministry of Construction, when issuing circulars related to construction contracts, need to be consistent with the Law on Bidding and the Law on Construction to avoid inconsistencies between the circulars of the Ministry of Construction and the Law on Bidding (circulars providing guidance contrary to the law) as has happened in the past.
Sixth, it is necessary to clearly and specifically stipulate the prerequisites for eliminating contractors according to Decree No. 85/2009/ND-CP dated October 15, 2009 of the Government on guiding the implementation of the Law on Bidding and selection of construction contractors according to the Law on Construction to avoid misunderstandings, or intentional misunderstandings that create loopholes causing losses to the State and reducing the effectiveness of project investment. Specifically: provisions in Article 18. Evaluation of bidding documents.1. Preliminary evaluation. b) Elimination of bidding documents that do not meet important requirements (prerequisites) stated in the bidding documents according to the provisions in Point b, Clause 2, Article 15 of this Decree. But in Article 15. Preparation of bidding, 2. Preparation of bidding documents b) Contents of bidding documents: - ... (specific provisions) and: other important requirements specific to the bidding package. A bidder violating even one of the prerequisites specified in the bidding documents will be disqualified and its bid will not be considered further''.
It is this unclear regulation that has caused some related entities to rely on the above regulation to eliminate other contractors in a "reasonable and valid" manner. This is one of the very important contents that causes huge losses to the State budget. It is necessary to specify in detail in each case, type of project scale, level of construction to have prerequisites, transparency to create a fair "playing field" for contractors.
Specifically, a construction and equipment supply and installation package X: there were three contractors participating in the bidding. Although when the bidding was opened, there was a huge difference in price: Company A offered: 20 billion VND; Company B offered: 15 billion VND; Company C offered: 9 billion VND. Although the equipment of these three contractors was the same, with the same origin, source, and technical specifications, the Investor and the bidding consultant still decided to award the contract to Contractor A with the highest bid price: 20 billion VND. When checked, this investor gave a series of reasons to "fail" the remaining contractors. This is a very painful situation today and in fact, it occurs quite often in construction investment management, especially in the transportation industry, where this problem is even more common.
4.3.2.4. Innovation in mechanisms and policies for managing norms, unit prices and construction investment costs
First , innovate construction norm management in the direction of:
- In the immediate future, the State needs to have specific instructions on applying construction cost estimates for each type of project and specific cases for easy implementation in practice.
- Innovate the management of consulting costs in the direction that investors themselves determine consulting costs to negotiate and agree on a reasonable cost level suitable for the type of construction consulting work based on information on construction consulting service prices in the domestic and foreign markets (this information is mainly published by associations and reputable consulting firms in the country and abroad). The State only publishes construction consulting service prices for each type of consulting work for investors to refer to.
Consultancy costs can be determined based on the cost norms according to the planning ratio using the "person-month" budgeting method, which is determined in accordance with each type and specific work that the consultancy service provides and gradually approaches the same type of consultancy salary in countries in the region.
+ Quickly adjust the percentage of consulting costs for each type of consulting work to be appropriate. Regulate the cost of author supervision from 10% - 20% of design costs and stipulate that this value belongs to the author supervision part, so that payment can only be made according to the progress of author supervision of the construction work so that author supervision can be seriously implemented in practice, contributing to improving the quality of works and preventing loss and waste.
- According to the roadmap for applying the project management model, the State only announces construction norms for investors and contractors to refer to, while construction norms are also announced by consulting organizations and professional associations. Therefore, according to the market mechanism, the State manages construction investment costs in construction investment projects from the State budget regardless of the construction norms announced by the State. Construction norms are hidden in the price of construction works as goods in the market mechanism.
Second , innovation in construction price management:
- In the immediate future, the State needs to unify the management of construction prices under one central authority, with clear decentralization, and issue documents guiding the method of establishing construction product prices according to the stages of the construction investment process. Complete the structure of each cost item in a unified manner and in accordance with the actual implementation of construction investment activities; clearly define the time for determining the construction price index.
- According to the roadmap of the new project management model, construction prices comply with the laws of the market economy. The State only regulates construction prices in the market through tools and policies such as monetary policy, exchange rate policy, financial policy, investment policy, tax policy, etc.
Third , socialize cost control throughout the entire construction investment process. Investors can hire qualified individuals and organizations to carry out cost control through contracts. These organizations and individuals are responsible for the results of cost control activities according to the signed contract.
Fourth , the State regulates the capacity conditions, practice regulations as well as policies to encourage the development of consulting organizations and individual construction valuation engineers; aiming to train construction valuation engineers to approach the professional regulations of international organizations with similar conditions to Vietnam to form professional construction cost management organizations and individuals, improving the efficiency of cost management and control.
Fifth , the State directs and builds a mechanism to provide an information system on norms, prices, and information on construction costs. Establishing data banks on construction investment costs in accordance with the requirements for controlling construction investment costs conveniently and effectively.
4.3.2.5. Innovation in the mechanism for establishing and assigning construction investment capital plans from the state budget in the transport sector
Firstly , arrange capital plans according to the development program of construction investment projects from the State budget in the transport sector that have been built and approved; according to the approved total budget, project implementation progress, and annual implementation volume. In directing and operating, resolutely do not arrange capital plans in an average or spread-out manner; completely resolve the outstanding debt in construction investment from the State budget in the transport sector.
Second , there are specific sanctions to strictly manage the investment process, arrange investment plans for projects that have completed construction investment procedures (investment decision, design, estimate approved by competent authorities) and on time according to regulations.