The Ministry of Construction of Vietnam issued Circular No. 16/2016/TT-BXD (effective from August 15, 2016) providing guidance on application of a number of articles of the Decree No. 59/2015/ND-CP of Vietnam’s Government on construction project management.
Article table of contents
Every field-based or area-based project management board (PMB) is established by the Minister, Head of Ministerial-level agency, president of People’s Committee of provinces or districts, competent person of any economic group or state-owned general corporation to perform the management of several projects in the same specialty, line of work or in the same area.
Field-based or area-based PMB is organized in accordance with their assigned functions and tasks, and the number and scale of projects that need to be managed. A field-based or area-based PMB includes:
- Board of Directors;
- Project management directors;
- Other affiliated divisions.
PMB operation is quite diverse and rich, depending on the individual or organization that established it, thereby deciding the legal status and financial resources. No matter what form or model is established, the reorganization and establishment of field-based or area-based PMBs under the Law on Construction of Vietnam must still ensure the following principles:
- Be conformable to the development orientations and planning, mid-term public investment plans, and policies on public investment and state-owned enterprise investment and restructure.
- Satisfy all requirements for field-based and area-based PMBs stipulated in the Law on Construction of Vietnam.
- Do not interrupt project progress nor make payroll increase Field-based and area-based PMB’s officials on the payroll must not concurrently hold different positions or take charge of tasks other than those designated.
- Self-arrange operation funds on the basis of project management budget allocated from the approved total investment and other legal proceedings (if any).
- Ensure the capacity of established/reorganized field-based /area-based PMBs under the Law on Construction.
According to Circular No. 16/2016/TT-BXD of the Ministry of Construction of Vietnam, the reorganization of PMBs of single construction project funded with State budget and extrabudgetary funds by the investment decision-maker and investor shall be carried out as follows:
- Every PMB of single construction project that has been set up by investors by the effective date of the law on Construction shall be entitled to operate until the project is finished and comes into operation. According to the particular requirements of specific regulatory authorities and enterprises, the investor may restructure and reorganize such PMB as a field-based or area-based PMB, where necessary.
- PMBs of single construction project (other than those established in accordance with clause 2, Article 62 of the Law on Construction of Vietnam) established after the effective date of the Law on Construction of Vietnam shall be merged into a field-based or area-based PMB that has been set up by the Minister, Head of Ministerial-level agency, President of People’s Committee of the province/district, competent person of the economic group or State-Owned Corporation.
- For projects which are funded with the State budget and invested by members of economic groups or State-owned corporation but are not eligible to have their own PMB, the investment decision-maker shall request the Board of Members or Board of Directors of the economic group or State-owned Corporation to have field-based or area-based PMB manage or hire project management consultancy under Clause 2 Article 20 of Decree No. 59/2015/NĐ-CP of Vietnam’s Government;
- For projects invested under investment programs within the administration of the province or district where such program is originally launched, the program owner shall negotiate with the People’s Committee of the province and district about the hire of field-based or area-based PMB for managing their project.
- For projects funded with ODA, or concessional loans from foreign sponsors shall conform to the agreement signed with the sponsor.
- For EPC projects, such projects may be managed by EPC contractors. Every investor shall assign specialized teams to supervise and inspect the project management by EPC contractors.
PMBs of multiple projects that are established by investment decision-makers and operating in regulatory authorities, economic groups or State-owned corporations shall be re-organized to satisfy field-based or area-based PMB criteria under the Law on Construction of Vietnam.
Depending on the specific conditions of ministries, localities, enterprises, the competent person may select one or several active PMBs as the core to reorganize and establish appropriate field-based or area-based PMBs.
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