What is the classification of construction projects in Vietnam?

What is the classification of construction projects in Vietnam? (Internet image)

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

1. What is construction investment project?

According to Clause 15, Article 3 of the Law on Construction 2014, construction investment project means a collection of proposals concerning use of funds for construction, repair or renovation of a construction work with a view to developing, maintaining and raising the quality of the work or product or service within a given duration at specified costs.

At the stage of investment construction project preparation, the project shall be demonstrated through the construction investment pre-feasibility study report, the construction investment feasibility study report or construction investment economic-technical report.

2. What is the classification of construction projects in Vietnam?

Construction projects shall be classified, for management purpose, as prescribed in Article 49 of the Law on Construction 2014 amended in 2020, and in Decree 15/2021/ND-CP as follows:

(1) The projects shall be classified by functions, fields, management purposes as specified in Appendix IV attached to Decree 15/2021/ND-CP.

(2) The projects shall be classified by sources of funds, forms of investment, including: projects funded by public investment capital, projects financed by state fund other than public investment, PPP projects and projects funded by other funds.

A construction project funded by mixed sources of funds shall be classified, for management purpose, as follows:

- If the above project is partially funded by public investment capital, regulations on management of projects funded by public investment capital shall prevail; if the above project is a PPP project partially funded by public investment capital, regulations on management of PPP projects shall prevail;

- If the above project is funded by state capital other than public investment capital and other funds: in case the rate of state capital other than public investment capital is greater than 30% or more than VND 500 billion of total investment, regulations on management of projects funded by state capital other than public investment capital shall prevail;

In case of other circumstances, regulations on management of projects funded by other funds shall prevail.

(3) Unless the investment-decision maker requires a feasibility study report, the following construction projects only require an economic - technical report:

- Projects for religious purposes;

- Projects for new construction, repair, innovation or upgrade with total investment of less than VND 15 billion (excluding land levies);

- Projects primarily for procurement of goods, services, installation of equipment or projects for repair, renovation without impact on bearing structure of the works with the cost of construction component less than 10% of total investment and less than VND 5 billion

(except for projects of national importance, projects of group A, PPP projects).

3. Requirements on construction investment projects in Vietnam

In Article 51 of the Law on Construction 2014 amended in 2020 a construction investment project, respective of its funding sources, must satisfy the following requirements:

-Conform to national planning, regional planning, provincial planning, construction planning, land use plan and planning in the area where the investment project is executed.

- Having appropriate technological and construction designing plans.

- Ensuring quality and safety in construction, operation, exploitation and use of its works, fire and explosion prevention and fighting and environmental protection and response to climate change.

- Ensuring the adequate allocation of funds strictly according to its schedule, ensuring its financial efficiency and socio-economic efficiency.

- Complying with other relevant provisions of law.

4. Prohibited acts in construction investment activities in Vietnam

Individuals and organizations are strictly prohibited from performing the following acts in construction investment activities:

- Deciding on construction investment in contravention of this Law.

- Starting construction when the conditions therefor prescribed in this Law are not fully met.

- Constructing works in non-construction zones ; constructing works in encroachment upon the protection corridors of national defense, security, traffic or irrigation works, dykes, energy facilities, historical-cultural relic areas and protection zones of other works prescribed by law; constructing works in areas prone to landslide, sweeping flood or flash flood, except works built to overcome these phenomena.

- Constructing works at variance with construction master plan, except cases with construction permits with a definite term; in encroachment of construction boundaries or construction levels; constructing works at variance with granted construction permits.

- Formulating, appraising and approving designs and cost estimates of construction works using public investment capital, foreign state capital for public investment in contravention of this Law.

- Contractors participating in construction activities when failing to fully satisfy the capacity conditions for carrying out construction activities.

- Project owners selecting contractors that fail to fully meet the capacity conditions for conducting construction activities.

- Constructing works not in compliance with the selected standards and technical regulations to be applied to works.

- Manufacturing and using building materials which cause harms to community health and environment.

- Violating regulations on labor safety and assets, fire and explosion prevention and fighting, security, order and environmental protection in construction.

- Using works against their purposes and utility; building annexes or lean-tos encroaching upon areas and spaces lawfully managed or used by other organizations or individuals or upon public areas and common-use areas.

- Giving and taking bribe in construction investment activities; abusing other legal persons to participate in construction activities; committing manipulation and collusion to falsify the results of project formulation, surveys, designs or supervision of construction.

- Abusing positions and powers to violate the law on construction; covering up and handling late acts in violation the law on construction.

- Obstructing lawful construction investment activities.

(Article 12 of the Law on Construction 2014 amended in 2020)

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