Adjustment of an investment project implementation progress may be understood as the investor implementing procedures to request an extension of the project implementation period as prescribed by law. This period is calculated from the time the investment policy is approved or the Investment Registration Certificate is issued until the project is completed, put into operation and exploitation.
NP Law would like to introduce to valued readers the following article "Legal provisions on adjustment of investment project implementation progress", hoping to provide useful information to help enterprises and investors clearly understand the necessary procedures, ensuring that projects are implemented in compliance with the law, efficiently and sustainably.
I. Current situation on adjustment of investment project implementation progress
According to the comprehensive investment supervision and evaluation report in 2023 by the Ministry of Planning and Investment, the country has 71,857 investment projects, of which 50.8% are transitional projects and 49.2% are newly commenced projects. The number of projects completed and put into operation was 32,669. Investment from state capital sources in 2023 played an important role amid a difficult economy, contributing to economic growth and restructuring, and the development of transport and energy infrastructure. The State budget capital was allocated in a focused and efficient manner, along with accelerated public investment institutional reforms.
However, in the overall picture, the number of delayed projects in 2023 remained quite high. There were 2,848 delayed projects, accounting for 4% of the total projects under implementation, up from 2,086 projects (2.9%) in 2022 and 1,867 projects (2.6%) in 2020. The main reasons include site clearance issues (1,598 projects), investment procedure obstacles (315 projects), delayed capital allocation (447 projects), limited capacity of investors and contractors (95 projects), along with other reasons (934 projects).
Additionally, 5,507 projects (7.7%) had to be adjusted, up from 3,673 projects (5.2%) in 2022 and 3,342 projects (4.7%) in 2020, mainly for adjustments to objectives, scale, progress, and investment capital.
It is evident that many projects currently require adjustments. Therefore, it is necessary to clearly understand the relevant regulations on adjusting investment projects to ensure the implementation process is lawful, effective, and minimizes risks.
II. Legal provisions on adjustment of investment project implementation progress
1. Conditions for adjusting the investment project implementation progress
To adjust the investment project implementation progress, the investor must meet the following conditions:
- First: For projects subject to investment policy approval, the prerequisite condition for adjustment is that the project must have been approved by the competent authority as prescribed in Clause 3, Article 41 of the Law on Investment.
- Second: The total investment time of the project must exceed 12 months compared to the progress specified in the initial investment policy approval document. In this case, the investor may proceed to adjust the project progress according to Point d, Clause 3, Article 41 of the Law on Investment 2020.
- Third: According to Clause 4, Article 41 of the Law on Investment 2020, for projects approved under investment policy, the investor is not allowed to adjust the implementation progress beyond 24 months compared to the project implementation progress specified in the initial investment policy approval document, except in the following cases:
- Remedying consequences in force majeure under the provisions of civil law and land law;
- Adjusting the project progress due to the investor being delayed by the State in allocating land, leasing land, or permitting change of land use purpose;
- Adjusting the project progress at the request of State management agencies or due to State agencies delaying administrative procedures;
- Adjusting the investment project due to changes in planning by State agencies;
- Changing objectives already specified in the investment policy approval document; adding objectives subject to investment policy approval;
- Increasing total investment capital by 20% or more, changing the scale of the investment project.
2. Authority to adjust the investment project implementation progress
According to Clause 5, Article 41 of the Law on Investment 2020, the State agency with the authority to approve the investment policy also has the authority to approve the adjustment of the project implementation progress.
3. Time limit for resolving procedures to adjust the investment project implementation progress
According to the Law on Investment 2020, the time for the competent State agency to review and process the dossier for adjustment of the project progress is 10–15 working days from the date the agency receives a valid dossier.
III. Questions on adjustment of investment project implementation progress
1. Can the project implementation progress be adjusted if the investment capital has not been fully contributed?
Failure to fully contribute capital to implement the investment project is deemed non-compliance with the contents of the investment policy approval in conjunction with investor approval, or the Investment Registration Certificate.
Therefore, according to Point a, Clause 2, Article 19 of Decree No. 122/2021/ND-CP, the investor will be fined from 70,000,000 VND to 100,000,000 VND.
=> To avoid fines, the investor should choose to adjust the project’s capital first before implementing the procedure to adjust the project implementation progress.
2. Can investment projects violating the law be adjusted for implementation progress?
Whether an investment project that violates the law can have its implementation progress adjusted or not, depends on the nature and severity of the violation. In each specific case, the competent authority will review and decide on allowing adjustments, based on applicable legal provisions and factors related to the feasibility and benefits of the project.
3. Can investment projects that are already behind deadline be adjusted for implementation progress?
When an investment project is delayed and the investor has not implemented the procedure to adjust the project progress, it means non-compliance with the contents of the investment policy approval in conjunction with investor approval, or the Investment Registration Certificate. At this time, according to Point a, Clause 2, Article 19 of Decree No. 122/2021/ND-CP, the investor will be fined from 70,000,000 VND to 100,000,000 VND.
Currently, Vietnamese law does not explicitly stipulate that projects behind progress but not yet adjusted cannot be adjusted. However, whether it can be adjusted depends on the nature of the project and the level of violation, and is decided by the competent authority upon review.
4. Does adjusting the project implementation progress affect the project’s operation period?
Adjustment of the investment project implementation progress may be understood as the investor implementing procedures to request an extension of the project implementation period as prescribed by law. Therefore, adjusting the project progress does affect the operational period of the project.
IV. Legal consulting services on adjustment of investment project implementation progress
Legal consulting services on adjustment of investment project implementation progress provide a comprehensive legal support solution, helping enterprises or investors follow the correct procedures and processes under the law when needing to extend or adjust the project progress. This service not only ensures compliance with the law but also optimizes time and costs, enhancing the effectiveness of project implementation.
With a team of experienced lawyers, NP Law is committed to providing the most effective and appropriate legal consulting solutions. NP Law not only assists clients in handling arising legal issues but also maximizes incentives and support mechanisms from the State, contributing to ensuring the success and sustainable development of investment projects.
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