Regulations on classification of public investment projects in Vietnam

Regulations on classification of public investment projects in Vietnam (Internet image)

1. What is public investment project?

According to Clause 13, Article 4 of the Law on Public Investment 2019, a public investment project refers to a project using all or part of public investment capital.

In particular, the public investment capital specified in the Law on Public Investment 2019 shall comprise:

+ State budget funds;

+ Legitimate revenues of state agencies and public service units that are retained for investment purposes as provided in law.

(Clause 22, Article 4 of the Law on Public Investment 2019)

2. Classification of public investment projects in Vietnam

Article 6 of the Law on Public Investment 2019 stipulates the classification of public investment projects as follows:

- Public investment projects can be classified by their characteristics as follows:

(i) Projects with construction constituents constitute investment projects in new construction, renovation, upgradation and expansion of existing investment projects, including purchase of project-controlled assets and equipment;

(ii) Projects without construction constituents refer to investment projects in purchasing assets, acquiring transferred land use rights, procuring, repairing and upgrading equipment, machinery and other projects that are not prescribed in item (i).

- Public investment projects may be classified by the level of significance and scale into investment projects of national significance, group-A, group-B and group-C investment projects according to criteria referred to in Article 7, 8, 9 and 10 of the Law on Public Investment 2019.

+ Investment projects of national significance

+ Group-A investment projects;

+ Group-B investment projects;

+ Group-C investment projects;

3. Criteria for classification of investment projects of national significance in Vietnam

According to Article 7 of the Law on Public Investment 2019, investment projects of national significance constitute independent investment projects or a complex of closely connected construction projects, and must meet one of the following criteria:

- Using public investment capital worth 10,000 billion dong or above;

- Having substantial environmental impacts or posing potential risks in making serious environmental impacts, including the following projects:

+ Nuclear power plants;

+ Those projects using land subject to the requirement for conversion of land use purposes from land in national parks, nature reserves, protected landscapes, research and experimental forests covering an area of 50 hectares or more; upstream protective forests covering an area of 50 hectares or more; protective forests, used as wind, sand screens, wave breakers, and for reclaiming land from the sea and protecting environment, that cover an area of 50 hectares or more; production forests covering at least 1,000 hectares;

- Using land subject to the requirement for conversion of land use purposes from arable land for growing wet rice during at least two cropping seasons which covers an area of 500 hectares or more;

- Moving and resettling at least 20,000 inhabitants in mountainous areas or at least 50,000 inhabitants in other regions;

- Requiring special legal frameworks or policies subject to the National Assembly's resolutions.

4. Criteria for classification of group-A investment projects in Vietnam

Except investment projects of national significance specified in Article 7 of the Law on Public Investment 2019, projects falling under one of the following criteria shall be classified as group-A investment projects:

(1) Those projects falling into the following circumstances, irrespective of the gross investment:

- National defence and security projects rated top secret;

- Hazardous and explosive production projects;

- Investment projects in construction of infrastructure of industrial parks, export processing zones and hi-tech parks;

(2) Those projects with the gross investment worth 2,300 billion dong or greater in the following fields:

- Transport, including bridges, seaports, inland ports, airports, railways and national highways;

- Electric power industry;

- Oil and gas production;

- Chemical, fertilizer and cement production;

- Machine manufacturing and metallurgy;

- Mining and mineral processing;

- Construction of residential buildings;

(3) Those projects with the gross investment worth 1,500 billion dong or greater in the following fields:

- Transport, except those projects specified in point a of clause 2 of Article 8 of the Law on Public Investment 2019;

- Water resources and irrigation;

- Water supply and drainage, waste treatment and construction of other technical infrastructure;

- Electrical engineering;

- Production of communication and electronic equipment;

- Pharmaceutical chemistry;

- Production of materials, except those projects specified in point d of clause 2 of Article 8 of the Law on Public Investment 2019;

- Mechanical engineering projects, except those projects specified in point dd of clause 2 of Article 8 of the Law on Public Investment 2019;

- Post and telecommunications;

(4) Those projects with the gross investment worth 1,000 billion dong or greater in the following fields:

- Agricultural, forestry and aquacultural production;

- National parks and nature reserves;

- Technical infrastructure of new urban zones;

- Industry, except for those projects in the industrial sectors specified in item (1), (2), (3)

(5) Those projects with the gross investment worth 800 billion dong or greater in the following fields:

- Health, culture and education;

- Scientific research, information technology, radio and television broadcasting;

- Treasure;

- Tourism, sport and physical activities;

- Civil construction, except construction of residential buildings specified in point g of clause 2 of Article 8 of the Law on Public Investment 2019;

- Projects developed in the national defence and security field, except those projects specified in item (1), (2), (3) and (4).

(Article 8 of the Law on Public Investment 2019)

5. Criteria for classification of group-B investment projects in Vietnam

- Those projects in the fields specified in clause 2 of Article 8 herein with total investment worth from 120 billion dong to less than 2,300 billion dong.

- Those projects in the fields specified in clause 3 of Article 8 herein with the gross investment worth from 80 billion dong to less than 1,500 billion dong.

- Those projects in the fields specified in clause 4 of Article 8 herein with the gross investment worth from 60 billion dong to less than 1,000 billion dong.

- Those projects in the fields specified in clause 5 of Article 8 herein with the gross investment worth from 45 billion dong to less than 800 billion dong.

(Article 9 of the Law on Public Investment 2019)

6. Criteria for classification of group-C investment projects in Vietnam

- Those projects in the fields specified in clause 2 of Article 8 herein with the gross investment worth less than 120 billion.

- Those projects in the fields specified in clause 3 of Article 8 herein with total investment worth less than 80 billion.

- Those projects in the fields specified in clause 4 of Article 8 herein with the gross investment worth less than 60 billion.

- Those projects in the fields specified in clause 5 of Article 8 herein with the gross investment worth less than 45 billion.

(Article 10 of the Law on Public Investment 2019)

Van Trong

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