06 principles for transferring electrical construction to Vietnam Electricity

Regarding this issue, LawNet would like to answer as follows:

Under Decree 02/2024/ND-CP, what is electrical construction?

According to Clause 2 of Article 1 of Decree 02/2024/ND-CP, electrical construction is a public asset transferred according to regulations, including:

- Electrical construction is public property at state agencies, public service units, people's armed forces units, Communist Party of Vietnam agencies, Vietnam Fatherland Front, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, and other organizations established in accordance with the law on associations (hereinafter referred to as public property at agencies, organizations, and units);

- Electrical construction is a public asset assigned to an enterprise to manage, excluding the state capital component at the enterprise (hereinafter referred to as public assets at the enterprise);

- Electrical construction belongs to a technical infrastructure project invested with state capital and is the investor of the Project Management Board, agency, organization, or unit (hereinafter referred to as electrical construction under technical infrastructure projects invested with state capital);

- Electrical construction belongs to the technical infrastructure commonly used in urban area projects, residential areas, and other projects that the investor must hand over to the State according to the provisions of the law;

- Electrical construction has established ownership by the entire population originating from outside the state budget (including the added value of electrical construction due to organizations and individuals investing, renovating, and upgrading the existing electrical construction of the power unit) by organizations and individuals voluntarily transferring ownership rights to the State of Vietnam through the Vietnam Electricity in the form of non-refundable capital, and the electricity unit agrees to receive (hereinafter referred to as electrical construction originating outside the state budget);

- Electrical construction has established ownership by the entire people, originating from an investment project under the public-private partnership method and agreed by the parties to transfer to the electricity unit according to the project contract according to the provisions of law or decided by a competent authority to assign the electricity unit to perform the receiving task (hereinafter referred to as electrical construction invested in the public-private partnership method).

06 principles for transferring electrical construction to Vietnam Electricity

The transfer of electrical construction to Vietnam Electricity must comply with the principles specified in Article 5 of Decree 02/2024/ND-CP:

(1) In case electrical construction meets the conditions specified in Article 4 of this Decree and the subjects specified in Points a, b, c, dd, and e, Clause 2, Article 3 of Decree 02/2024/ND-CP, the agency receiving the handover of technical infrastructure for common use in urban area projects, residential areas, and other projects that need to be handed over to Vietnam Electricity will be transferred in its original state to the Vietnam Electricity forces according to the provisions of Decree 02/2024/ND-CP.

(2) Agencies, organizations, units, businesses, and other subjects specified in Clause 2 of Article 3 of Decree 02/2024/ND-CP are responsible for continuing to manage, use, and handle according to regulations for:

- Electrical construction that agencies, organizations, units, businesses, and other entities do not need to transfer;

- Electrical construction does not meet the transfer conditions as prescribed in Article 4 of Decree 02/2024/ND-CP;

- Electrical construction located at a location containing state secrets according to the provisions of the law on the protection of state secrets;

- Electrical construction is invested with loan capital that the agency, organization, or unit with assets has not yet completed repaying the loan.

(3) The transfer of electrical construction to Vietnam Electricity is carried out by the method of the transferor recording a decrease in assets, Vietnam Electricity recording an increase in assets, and state capital invested in Vietnam Electricity according to the value of electrical construction at the time of transfer; The determination of the value of transferred electrical construction is carried out in accordance with the provisions of Decree 02/2024/ND-CP; No capital repayment will be made for transferred electrical construction.

Vietnam Electricity recorded an increase in assets and investment capital in power units according to the provisions of the law on the management and use of state capital invested in production and business at enterprises and the financial management regulations of Vietnam Electricity.

(4) For electrical constructions at Point dd, Clause 2, Article 1 of Decree 02/2024/ND-CP to which the cost of the project is included in the electricity selling price of the transferor to the electricity unit (except in the case of projects/electrical construction applying a fixed electricity price - FIT), the cost of transferred electrical construction calculated for the remaining time under the project must be deducted from the electricity price in the Power Purchase Contract between the Transferor and the electricity unit.

(5) After completing the handover and receipt, the electricity unit is responsible for managing, using, accounting for assets and capital, and depreciating assets according to the provisions of law on investment of state capital in production and business at enterprises and relevant provisions of law. The management and use of land associated with transferred electrical construction is carried out in accordance with the provisions of land law and the provisions of Decree 02/2024/ND-CP.

(6) While the handover of electrical construction to the electricity unit has not been completed, agencies, organizations, units, businesses, and individuals with electrical construction are responsible for managing, operating, maintaining, and repairing electrical construction in accordance with the law, ensuring safety and stable operation.

More details can be found in Decree 02/2024/ND-CP, taking effect on March 1, 2024.

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