To establish a unified and synchronized legal framework and enhance the efficiency of public investment, during the 7th session on June 18, 2014, the National Assembly of the XIII Legislature passed the Law on Public Investment No. 49/2014/QH13. On June 30, 2014, the President signed Order No. 14/2014/L-CTN promulgating the Law on Public Investment, comprising 6 chapters with 108 articles.Below are the main contents of the Law on Public Investment.
Article table of contents
Chapter I: General Provisions (16 Articles, from Article 1 to Article 16).
Chapter I stipulates the scope of regulation; applicable subjects; and explanations of terms related to public investment. Additionally, this Chapter clearly defines programs and projects in the public investment sectors; regulations on project classification criteria and the adjustment of public investment project classification criteria, which are new contents previously only scattered in National Assembly Resolutions and Government of Vietnam Decrees, not yet codified in any legal document. The principles and contents of public investment management are specifically stipulated in this Chapter. The contents of transparency in public investment are regulated in all stages, from policy and legal enactment; principles of project category selection; principles of capital allocation; planning to organizing the implementation of plans, programs, projects, etc. The Law on Public Investment also fully provides for prohibited acts related to all public investment activities.
Chapter II: Investment Policy and Decision on Public Investment Programs, Projects (2 Sections with 32 Articles, from Article 17 to Article 48).
Section 1. Formulation, Appraisal, Decision on Investment Policy of Public Investment Programs, Projects: Stipulates the authority to decide on investment policy; conditions and procedures to decide on investment policy for each national target program, targeted program, national important project, and Group A, B, C programs and projects; decentralization of appraisal of capital sources and balance ability of public investment programs and projects. This is a new and one of the most important contents of the Law on Public Investment, not previously stipulated in law (except for national important projects). The codification of investment policy decisions will help to overcome arbitrary and simple practices, preventing losses, and waste in public investment right from the start.
The appraisal of capital sources and balance ability, as stipulated in the Law on Public Investment (codifying Directive No. 1792/CT-TTg), is also an important innovation. Appraisal of capital sources and balance ability will help overcome the approval of too many projects beyond budget balance capacity; ensuring concentrated capital allocation, promptly putting projects into use and effectively bringing them into play.
Two points to note in Section 1 are:
- Regarding the decentralization of investment policy decision-making, Group A projects are all decided by the Prime Minister of the Government of Vietnam, regardless of whether the investment capital is from central or local sources.
- Regarding the decentralization of capital source appraisal and balance ability, according to the Law on Public Investment: all programs and projects using central budget capital are appraised for capital sources and balance ability by the Ministry of Planning and Investment, including projects managed by ministries and central authorities (according to Directive No. 1792/CT-TTg, ministries and sectors self-appraise capital sources and balance ability), and projects managed by local authorities utilizing centrally targeted supplementary funds (referred to as central capital).
Section 2. Formulation, Appraisal, Decision on Public Investment Programs, Projects: Stipulates the authority to decide on public investment programs and projects; basis and procedures for formulation, appraisal, and decision on public investment programs and projects; adjustment of public investment programs and projects.
Chapter III: Formulation, Appraisal, Approval, and Allocation of Public Investment Plans (3 Sections, 23 Articles, from Article 49 to Article 71).
The contents of this Chapter stipulate the entire process from planning to appraisal, approval, and allocation of medium-term and annual public investment plans based on specific capital sources. The most important and new aspect of this Chapter is the transition from short-term annual public investment plans to medium-term 5-year public investment plans. The implementation of medium-term public investment plans will allow all levels and sectors to be more proactive in arranging, integrating, and mobilizing resources from various economic components domestically and internationally to achieve socio-economic development goals. Another important new point in formulating public investment plans is the codification of Directive No. 1792/CT-TTg, giving levels and sectors the autonomy to allocate public investment capital. The central government only reviews and adjusts any mistakes in the capital allocation plans of ministries, central authorities, and local authorities. This regulation ensures that capital allocation is more realistic and aligns with the development needs and orientations of the sectors and localities. The third important innovation in this Chapter is the regulation that capital allocation must follow principles, standards, and norms for the allocation of state budget capital (Codifying Decision No. 60/2010/QD-TTg). Proper implementation of this regulation will ensure transparent and equitable public investment capital allocation, contributing positively to anti-corruption efforts. The specific contents of this Chapter include the following three Sections:
Section 1. Regulations on classification of public investment plans; basis, principles of formulating medium-term and annual public investment plans; principles of capital allocation for medium-term and annual public investment plans; conditions for programs and projects to be allocated medium-term and annual public investment plan capital; procedures for formulation and appraisal of medium-term and annual public investment plans, programs, and projects.
Section 2. Formulation, appraisal, approval, and allocation of investment plans by specific capital sources: state budget capital, national debt instruments, government bonds, local government bonds, revenue-retained investment capital not yet included in the state budget, and local government borrowing for investment.
Section 3. Formulation, appraisal, approval, and allocation of investment plans for state development investment credit capital, ODA capital, and concessional loans from foreign donors.
The formulation, appraisal, and approval per capital source in these three sections must comply with the aforementioned regulations and also include specific rules for each capital source.
Chapter IV: Implementation, Monitoring, Inspection, Evaluation, Audit of Public Investment Plans (14 Articles, from Article 72 to Article 85).
This Chapter stipulates the content on organizing the implementation of public investment plans; executing the plans; adjusting public investment plans; the timeline for implementing and disbursing medium-term and annual investment plans; monitoring, inspecting, evaluating, and auditing plans, programs, and projects for public investment. Community monitoring regulations are also codified and specifically defined within this Chapter, alongside measures to effectively organize and implement monitoring.
Chapter V: Duties, Powers, Responsibilities of Agencies, Organizations, Individuals in Public Investment Activities (20 Articles, from Article 86 to Article 105).
This Chapter stipulates the duties and powers of the National Assembly, the Government of Vietnam, the agencies of the Government of Vietnam, the People’s Councils at all levels, and the People’s Committees at all levels in state management of public investment; responsibilities of organizations and individuals related to proposing investment policies; deciding on investment policies; formulating, appraising, deciding on programs and projects; monitoring, evaluating plans, programs, and public investment projects. At the same time, this Chapter also stipulates sanctions for violations by organizations and individuals related to public investment management.
Chapter VI: Implementation Provisions (3 Articles, from Article 106 to Article 108).
This Chapter stipulates the handling of programs and projects that have been and are being implemented before the Law on Public Investment takes effect; the effective date of the Law and implementation guidance for the Law.
Source: Vietnam Industrial Parks Magazine
