Thông tư 43/2016/TT-BCT

CIRCULAR

PRESCRIBING PROJECT DEVELOPMENT COMMITMENTS AND THE MECHANISM FOR HANDLING POWER PLANT PROJECTS FAILING TO MEET COMMITTED SCHEDULES

Pursuant to November 26, 2014 Investment Law No. 67/2014/QH13;

Pursuant to the December 3, 2004 Electricity Law and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Electricity Law;

Pursuant to June 18, 2014 Construction Law No. 50/2014/QH13;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the Government’s Decree No. 137/2013/ND-CP of October 21, 2013,

detailing the implementation of a number of articles of the Electricity Law and the Law Amending and Supplementing a Number of Articles of the Electricity Law;

Pursuant to the Government’s Decree No. 43/2014/ND-CP of May 15, 2014, detailing the implementation of a number of articles of the Land Law;

Pursuant to the Government’s Decree No. 118/2015/ND-CP of November 12, 2015, detailing and guiding the implementation of a number of articles of the Investment Law;

Pursuant to the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on management of construction investment projects;

Pursuant to the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on public-private partnership investment;

Pursuant to the Government’s Decree No. 95/2012/ND-CP of November 12, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

In implementation of the Prime Minister’s direction in the Government Office’s Notice No. 385/TB-VPCP of November 23, 2015, on concluding opinions of Deputy

Minister Hoang Trung Hai at the meeting on the Minister draft decision on project development commitments and the mechanism for handling power plants with BOO (Build-Own-Operate) investment and under BOT (Build-Operate-Transfer) contracts which fail to meet committed schedules;

At the proposal of the General Director of Energy,

The Minister of Industry and Trade promulgates the Circular prescribing project development commitments and the mechanism handling  power plant project failing to meet committed schedules.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes commitments to developing PPP (public-private partnership) projects on power plants each with a capacity of 30 MW or higher and non-PPP power plants each with a capacity of 30 MW or higher implemented by domestic or foreign investors or foreign-invested economic organizations; and the mechanism for handling power plants failing to meet committed schedules.

Article 2. Subjects of application

This Circular applies to:

1. Investors of power plant projects each with a capacity of 30 MW or higher in the territory of Vietnam.

2. Agencies and organizations involved in the investment and construction of power plants in the territory of Vietnam.

Article 3. Interpretation of terms

1. Power plant project invested under a public-private partnership contract (below referred to as PPP power plant project) means a power plant project invested by an investor in the form of public-private partnership (PPP) under the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on public-private partnership investment.

2. PPP power plant investor means an individual investor (in case only one investor develops the project) or an investor group (in case various investors jointly contribute capital to develop the project) assigned the right to develop a PPP power plant project.

3. Non-PPP power plant investor is an individual investor (in case only one investor develops the project) or an investor group (in case various investors jointly contribute capital to develop the project) assigned the right develop a project not in the form of PPP.

4. Project development right means the right of an investor to develop a project in accordance with the regulations and law of Vietnam after being assigned by a competent state agency.

5. Project documents means documents used in a PPP power plant project, including power purchase agreement (PPA), land lease agreement (LLA), fuel supply contracts (if any) and other contracts (if any).

6. PPP contract means a contract signed between a competent state agency and an investor to develop a project in the form of public-private partnership prescribed in the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on public-private partnership investment.

7. Force majeure event means a misfortune which occurs in an objective manner without being anticipated and cannot be handled even though all necessary measures have been applied to the utmost in the course of carrying out power plant construction investment activities.

8. MOU stands for a memorandum of understanding on development of a PPP power plant project.

9. Project development commitment means a written commitment made by a non-PPP power plant investor on power plant project development milestones in order to ensure the approved schedule for operation of the plant is met.

10. Project development milestones means points of time associated with tasks decisive to the schedule for implementation and completion of a project.

11. Written assignment of the project development right means a document or decision of the Prime Minister or a competent authority notifying the assignment of the project development right to an investor or an investor group.

12. FS stands for feasibility study report.

13. PPA stands for power purchase agreement.

14. LLA stands for land lease agreement.

Chapter II

PROVISIONS ON PPP POWER PLANT PROJECTS

Article 4. Time limit for memorandum of understanding signing

Within 90 working days after being assigned the right to develop a PPP power plant project, the PPP power plant investor and the Ministry of Industry and Trade shall sign an MOU.

Article 5. Contents of a memorandum of understanding

In addition to the prescribed contents on PPP power plant project development, an MOU must contain the following contents:

1. Rights and obligations of the PPP power plant investor and the Ministry of Industry and Trade in the course of power plant project investment in order to meet the approved schedule for operation of the plant.

2. A project implementation plan, which must contain at least the following project development milestones:

a/ Schedule for elaboration and approval of project site planning (if any), including date of submission and date of approval;

b/ Schedule for elaboration and approval of FS, including date of submission and date of approval;

c/ Plan for negotiations on PPP contract and related documents;

d/ Agenda of negotiations on related documents: PPA, LLA, EPC (Engineering, Procurement and Construction) contract and fuel supply contracts (if any); other contracts (if any);

dd/ Time of initialing project documents;

e/ Date of submission of investment registration certificate application dossier; date of official signing of project documents and PPP contract;

g/ Schedule for financial contribution;

h/ Schedule for groundbreaking and construction, including date of project groundbreaking; date of commercial operation of each turbine; date of commercial operation of the entire plant.

Article 6. Adjustment of PPP power plant project development milestones

When a project likely fails to meet project development milestones committed under the MOU, the PPP power plant investor shall implement measures to settle problems to ensure accomplishment of these milestones. The Ministry of Industry and Trade and PPP power plant investor may adjust project development milestones under the MOU prescribed at Points a, b, c, d and dd, Clause 2, Article 5 of this Circular only in the following cases:

1. Delay due to a force majeure event: Within 15 working days after encountering a force majeure event, a PPP power plant investor shall notify it in writing to the Ministry of Industry and Trade and request adjustment of the project development milestones. Within 5 working days after receiving the notice, the Ministry of Industry and Trade shall send a document to the PPP power plant investor, giving its opinion about the force majeure event, as a basis for inviting the PPP power plant investor to sign the adjustment of project development milestones under the MOU.

2. The project fails to meet committed milestones due to acts of state management agencies with authority over work items under those milestones:

a/ Within 15 working days after a committed milestone is delayed, the PPP power plant investor shall send to the Ministry of Industry and Trade a written request for adjustment of that project development milestone and explain such delay is caused by acts of a state management agency with authority over work items under that milestone. Within 10 working days after receiving the written request, the Ministry of Industry and Trade shall give a written reply to the PPP power plant investor, giving its opinion about the causes of the delay other than the investor’s fault, as a basis for inviting the latter to sign the adjustment of project development milestones under the MOU;

b/ Within 10 working days after issuing a reply to the PPP power plant investor, if determining that a state management agency with authority over work items at a milestone has committed acts that delay that project development milestone, the Ministry of Industry and Trade shall issue a document urging, reminding or handling in accordance with regulations the agency or unit under its management or send a document to related managing ministries or report to the Prime Minister, if the agency or unit is not under the Ministry of Industry and Trade’s management.

3. Delay due to a third party directly involved in work items under project development milestones:

a/ Within 15 working days after a committed milestone is delayed, a PPP power plant investor shall send to the Ministry of Industry and Trade a written request for adjustment of project development milestones and explain the delay is caused by a third party directly involved in work items under that project development milestone. Within 10 working days after receiving the written request, the Ministry of Industry and Trade shall request in writing the third party directly involved in work items under that milestone to give its written opinions about the causes of the delay of the project development milestone as reported by the investor within 15 working days. Within 10 working days after receiving a written reply from the third party, the Ministry of Industry and Trade shall give a written reply to the PPP power plant investor, giving its opinions about the causes of the delay other than the investor’s fault, as a basis for inviting the latter to sign the adjustment of project development milestones under the MOU;

b/ Within 10 working days after issuing a reply to the PPP power plant investor, if determining that the third party directly involved in work items under that milestone causes the delay of a project development milestone, the Ministry of Industry and Trade shall issue a document urging, reminding or handling in accordance with regulations the agency or unit under its management or send a document to related managing ministries or report to the Prime Minister, if the agency or unit is not under the Ministry of Industry and Trade’s management.

4. Adjustment of milestones under the financial contribution schedule and construction schedule shall be based on signed project documents or PPP contract.

5. The Ministry of Industry and Trade’s document giving its opinions about the causes of the delay of project development milestones other than the investor’s fault may only be used as the basis for adjustment of project development milestones under the MOU, but not for other purposes.

6. In case adjustment of project development milestones consequently delays the committed schedule officially signed under project documents and PPP contract for 12 months or longer, the Ministry of Industry and Trade shall propose the Prime Minister in writing to consider approving the adjustment of the schedule for operation of the project before adjustment of project development milestones under the MOU is signed.

Article 7. Mechanism for handling PPP power plant projects failing to meet committed schedules

The mechanism for handling PPP power plant projects failing to meet committed schedules shall be applied from the time a competent agency issues a document assigning the project development right to the time project documents and PPP contract are officially signed. The mechanism for handling a PPP power plant project failing to meet its committed schedule is as follows:

1. For a delay of over 30 working days for every milestone committed under the MOU, the Ministry of Industry and Trade shall issue a document reminding and requesting the PPP power plant investor to promptly accomplish the delayed work items and ensure the subsequent milestone is not affected. Thirty working days after giving the first written reminder, if the PPP power plant investor fails to meet the milestone which has been delayed, the Ministry of Industry and Trade shall give the second written reminder. The number of reminders for each milestone must not exceed 2.

2. Within 1 year after the Ministry of Industry and Trade issues the first document notifying a delayed milestone, in case the investor fails to accomplish the delayed milestone and the overall schedule of the project is delayed for an accumulative 12 months against the one committed under the MOU, the Ministry of Industry and Trade shall request a competent agency in writing to consider issuing a document terminating the investor’s project development right for assignment to another investor.

3. A PPP power plant investor that has its project development right terminated and its investment certificate revoked by a competent agency shall incur all project development costs it has spent or arising before the time the project development right is terminated without indemnity.

4. For milestones following the official signing of documents and PPP contract, the mechanism for handling delayed milestones shall be applied under the PPP contract.

Chapter III

PROVISIONS ON NON-PPP POWER PLANT PROJECTS

Article 8. Time limit for elaboration and submission of project development commitments

1. Within 90 working days after being assigned the project development right, a non-PPP power plant investor shall make and send to the Ministry of Industry and Trade a project development commitment for supervision, monitoring, management and urging of the accomplishment of the project schedule.

2. If receiving no project development commitment 105 working days after assigning the project development right, the Ministry of Industry and Trade shall give the first written reminder, requesting the non-PPP power plant investor to promptly complete and send its project development commitment. If receiving no project development commitment 15 working days after giving the first written reminder, it shall give the second written reminder. The number of reminders must not exceed 2.

3. If receiving no project development commitment 180 working days after the investor is assigned the project development right, the Ministry of Industry and Trade shall request a competent agency in writing to consider issuing a document terminating the investor’s project development right for assignment to another investor.

Article 9. Project development commitment contents

A project development commitment must contain the following principal contents:

1. The non-PPP power plant investor’s commitment on power plant project development milestones to ensure the approved schedule for operation of the project is met.

2. The project implementation plan, which must contain at least the following project development milestones:

a/ Schedule for elaboration and approval of project site planning (if any), including date of submission and date of approval:

b/ Schedule for elaboration and approval of FS, including date of submission and date of approval;

c/ Schedule for elaboration and approval of the work construction design (technical design, construction drawing design and construction cost estimates);

d/ Schedule for elaboration of dossiers of application for an investment registration certificate and a construction permit: date of submission and date of approval;

dd/ Time of making a deposit to secure investment project implementation;

e/ Schedule for negotiations on and signing of major agreements of the project, including LLA; loan contract; PPA; construction contract; equipment supply contract; EPC contract;

g/ Schedule for groundbreaking and construction, including date of project groundbreaking; date of commercial operation of each turbine; date of commercial operation of the entire plant.

Article 10. Adjustment of project development milestones

In case a project likely fails to meet its development milestones under the project development commitment, the non-PPP power plant investor shall implement measures to settle problems to ensure the committed milestones are met. Project development milestones under the project development commitment prescribed at Points a, b, c, d and dd, Clause 2, Article 9 of this Circular may be adjusted only in the following cases:

1. Delay due to a force majeure event: Within 15 working days after encountering a force majeure event, a non-PPP power plant investor shall notify it in writing to the Ministry of Industry and Trade and request adjustment of the project development milestones. Within 5 working days after receiving the notice, the Ministry of Industry and Trade shall send a document to the non-PPP power plant investor, giving its opinions about the force majeure event, as a basis for the investor to adjust project development milestones under the project development commitment.

2. The project fails to meet its committed milestones due to acts of state management agencies with authority over work items under those milestones:

a/ Within 15 working days after a committed milestone is delayed, a non-PPP power plant investor shall send to the Ministry of Industry and Trade a written request for adjustment of that project development milestone and explain such delay is caused by acts of a competent state management agency with authority over work items under that milestone. Within 10 working days after receiving the written request, the Ministry of Industry and Trade shall give a written reply to the non-PPP power plant investor, giving its opinions about the causes of the delay other than the investor’s fault, as a basis for the investor to adjust project development milestones under the project development commitment;

b/ Within 10 working days after issuing a reply to the non-PPP power plant investor, if determining that a competent state management agency with authority over work items under that milestone has committed acts that delay a project development milestone, the Ministry of Industry and Trade shall issue a document urging, reminding or handling in accordance with regulations the agency or unit under its management or send a document to related managing ministries or report to the Prime Minister, if the agency or unit is not under the Ministry of Industry and Trade’s management.

3. Delay due to a third party directly involved in work items under project development milestones:

a/ Within 15 working days after a committed milestone is delayed, a non-PPP power plant investor shall send to the Ministry of Industry and Trade a written request for adjustment of project development milestones and explain the delay is caused by a third party directly involved in work items under that project development milestone. Within 10 working days after receiving the written request, the Ministry of Industry and Trade shall request in writing the third party to give its written opinions within 15 working days about the causes of the delay as reported by the investor. Within 10 working days after receiving a written reply from the third party, the Ministry of Industry and Trade shall give a written reply to the non-PPP power plant investor, giving its opinions about the causes of the delay other than the fault of the investor, as a basis for the investor to adjust project development milestones under the project development commitment;

b/ Within 10 working days after issuing a reply to the non-PPP power plant investor, if determining that the third party directly involved in work items under that milestone causes the delay of project development milestones, the Ministry of Industry and Trade shall issue a document urging, reminding or handling in accordance with regulations the agency or unit under its management or send a document to related managing ministries or report to the Prime Minister, if the agency or unit is not under the Ministry of Industry and Trade’s management.

4. The Ministry of Industry and Trade’s document giving its opinions about the causes of delay in meeting project development milestones other than the investor’s fault may only be used as the basis for adjustment of project development milestones under the project development commitment, but not for other purposes.

6. In case adjustment of project development milestones results in a delay of 12 months or longer against the committed schedule, the Ministry of Industry and Trade shall propose the Prime Minister in writing to consider approving adjustment of the schedule for official operation of the project before project development milestones under the project development commitment are adjusted.

Article 11. Mechanism for handling non-PPP power plant projects failing to meet committed schedules

The mechanism for handling non-PPP power plant projects failing to meet committed schedules shall be applied from the time a competent agency issues a document assigning the project development right to the time the investment project implementation is secured under Article 42 of Investment Law No. 67/2014/QH13 and Article 27 of the Government’s Decree No. 118/2015/ND-CP of November 12, 2015, detailing and guiding the implementation of a number of articles of the Investment Law. The mechanism for handling a non-PPP power plant project failing to meet its committed schedule is as follows:

1. Termination of the project development right:

a/ For a delay of over 30 working days against every milestone committed under the project development commitment, the Ministry of Industry and Trade shall issue a document reminding and requesting the non-PPP power plant investor to promptly accomplish the delayed work item and ensure the subsequent milestone is not affected. Thirty working days after giving the first written reminder, if the non-PPP power plant investor fails to meet the milestone which has been delayed, the Ministry of Industry and Trade shall give the second written reminder. The number of reminders for each milestone must not exceed 2;

b/ Within 1 year after the Ministry of Industry and Trade issues the first document notifying a delayed milestone, in case the investor fails to accomplish this milestone and the overall schedule of the project is delayed for an accumulative 12 months against the one committed under the project development commitment, the Ministry of Industry and Trade shall request a competent agency in writing to consider issuing a document terminating the investor’s project development right for assignment to another investor.

2. Revocation of the land use rights certificate, investment policy decision and investment registration certificate: Within 10 working days after a competent agency issues a document terminating an investor’s project development right, the Ministry of Industry and Trade shall send a written notice to competent agencies for carrying out procedures to revoke the land use rights certificate granted to the project and the investment registration certificate in accordance with the Land Law and the Investment Law.

3. A non-PPP power plant investor that has its project development right terminated and its investment certificate revoked by a competent agency shall incur all project development costs it has spent or arising before the time the project development right is terminated without indemnity.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 12. Organization of implementation

1. The General Directorate of Energy shall disseminate, and guide and examine the implementation of, this Circular.

2. Power plant investors shall:

a/ Sign supplements to MOUs or send supplements to project development commitments in accordance with this Circular;

b/ Monthly (before the end of the last working week of a month) send reports on the implementation of work items under committed project development schedules to the General Directorate of Energy and provincial-level People’s Committees of localities where their projects are implemented.

Article 13. Transitional provisions

1. For PPP power plant projects to which the development right has been assigned and for which an MOU has been signed before the effective date of this Circular but of which other documents and the PPP contract have not been officially signed, within 90 working days after the effective date of this Circular, the Ministry of Industry and Trade and investors shall sign supplements to MOUs which only include remaining project development milestones and application of the violation-handling mechanism prescribed in Chapter II of this Circular.

2. For PPP power plant projects to which the development right has been assigned before the effective date of this Circular but for which an MOU has not been signed, Chapter II of this Circular shall apply.

3. For non-PPP power plant projects to which the development right has been assigned before the effective date of this Circular but which does not have security for investment project implementation yet, within 90 working days after the effective date of this Circular, investors shall supplement project development commitments and send them to the Ministry of Industry and Trade. The project development commitments only include remaining project development milestones up to the time of having security for investment project implementation and the violation-handling mechanism prescribed in Chapter II of this Circular shall apply to the projects’ subsequent steps.

Article 14. Effect

1. This Circular takes effect on February 15, 2017.

2. Any problems arising in the course of implementation of this Circular should be reported directly to the Ministry of Industry and Trade for consideration and settlement.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, the chairperson of Vietnam Electricity Members’ Council and related organizations and persons shall implement this Circular.-