September 26, 2018 17:17

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Construction investment: Maze of procedures

15:45 | 08/04/2018

VCN- Construction investment plays a very important role in the development of the economy, contributing to 11% of the country's GDP. Therefore, if the hindering and discouraging procedures in this activity can be cleared, not only will businesses have more favorable business conditions, but it will also contribute to general economic growth.

construction investment maze of procedures
Given the high volume of projects, delays in construction appraisal will affect the efficiency of the investment. Photo: H.Dịu

Complex procedures

A general assessment is that enterprises consider Vietnam’s administrative procedures in construction investment are too complex, cumbersome. Even, there are foreign investors who invest in Vietnam also think that as the "fascinated" when involved in construction investment, there are dozens of governing laws. For example, the Ministry of Construction with 4 laws on planning, construction, housing and real estate business; Ministry of Planning and Investment with laws on bidding, investment and public investment; Ministry of Natural Resources and Environment with land law, environmental protection; Ministry of Public Security with the law on fire protection etc. Moreover, these laws are different, so the operation and use is quite difficult for both businesses and law enforcement.

More concrete evidence, Mr. Nguyen Quoc Hiep, Chairman of the Association of Contractors, said that in order to appraise a construction investment project, enterprises must work with the Ministry of Construction, if related to land, must work with the Ministry of Natural Resources and Environment; related to fire prevention and security work, with the Ministry of Public Security; Static height does not have to go through the Ministry of Defense etc. Or when a city-level project applies for an investment certificate for the project, it must go through the Department of Planning and Investment. But, this department must contact; the Department of Construction, the Department of Planning and Architecture, the Department of Finance, the Taxation Department and the districts, wards and population groups (where the project is located) to send a written request. With such a 6-8 "doors", Mr. Hiep said that the 15-day regulation is not feasible, so in big cities investment procedures may take up to 2-3 years. .

In addition, many enterprises made comments about the issuance of construction permits also make it difficult for businesses. Accordingly, Circular No.15/2016/TT-BXD of the Ministry of Construction guiding the granting of permits stipulates that the dossiers of application for construction permits for the projects, forcing investors to have papers evidencing the right to use land according to the provisions of the land legislation. The companies said that for large projects (over 20 ha), investors are keen to reach any land agreement with the people, but where only 5-7% of land cannot be agreed, the investor cannot be licensed so it is be a big obstacle. Therefore, businesses suggested the Ministry of Construction should reconsider this provision, may require investors to own only 80% of land under the plan in order to be licensed.

Change the authentication method

Along with many issues related to the "business" procedures, businesses are very focused on the project evaluation because many procedures are still unclear, causing delays for businesses.

According to Ms. Hoang Bich Loan, deputy head of the Construction Division of the Vietnam Oil and Gas Group, the regulations on the contents of the appraisal by state management agencies are not detailed and insufficient to ensure the results of the appraisal are grounded. The person deciding the investment determines the technique/volume, cost for the project. In addition, the legal document system is lacking and unclear for some contents of the overall technical design (FEED), cost estimates for projects that have to buy technology rights and implement FEED, EPC contract etc.

According to Mr. Pham Xuan Lam, Director of Vinacomin Project Management Consultant Company, Vietnam Coal and Mineral Group (Vinacomin), from 2015-2016 statistics, the number of projects from group B down to Vinacomin and affiliates can reach more than 400 projects. Therefore, the fact that economic groups or state corporations submitting to the Ministry of Construction or the specialized construction management offices may lead to overloading, which may lead to lengthy evaluation periods, thus affecting the business situation of enterprises. Therefore, Mr. Lam proposed decentralization to economic groups, state corporations are evaluated design for group B projects, Group C, these companies as investors; to assign economic groups and state corporations to be appraised technical designs, cost estimates and construction drawing designs and cost estimates for group-A projects.

It can be seen that this is a big problem for enterprises because of the increasing number of projects, so the delay in the appraisal will affect the investment efficiency, opportunities and disbursement of investment capital. Mr. Tran Chung, Director of Quality, General Assembly of Construction in Vietnam, said that the Construction Law 2015 should be decentralized in the direction of: State agencies only need to evaluate the basic design, which attaches special importance conditions to ensure the interests of the community. Other contents should be assigned to specialized agencies of investment deciders for evaluation in order to raise the responsibility of investment deciders in considering and approving investment projects on construction.

The Ministry of Construction has submitted to the Government the proposal to abolish 89 business conditions, to simplify 94 and to retain 32 of the 215 business conditions in the construction sector; However, this work still needs to be further improved when there are many comments "crying" from businesses. Therefore, listening and solving difficulties for enterprises is necessary to make regulations suitable to the actual operation of enterprises.

By Hương Dịu/ Huu Tuc