Responded by units: The Ministry of Construction

Official letter: 1862/BXD - PC, dated: 2017-08-11

Responded contents:

Law on Construction 2014 has specific regulations and solutions to avoid construction debt such as: construction investment projects must ensure adequate capital right on the project, financial efficiency , socio-economic development of the project (Article 52); Works can be started only when the capital is allocated in accordance with construction progress (Article 107); The principle of signing a construction contract is to ensure sufficient payment capital as agreed in the contract (Article 138). Decree No. 37/2015 / ND-CP detailing the construction contract. There are also provisions on the liability of the parties in the payment of construction contracts (Articles 19 and 20).

-  Article 16 and 17 of Decree No. 37/2015 / ND-CP, specifically regulating the performance of a construction contract (in which incentives are provided for the form of guarantee) , guarantee payment of construction contract. Accordingly, the value of the contract performance guarantee, the mode of security must be prescribed in the bidding documents or the requirement documents; The contract performance guarantee shall be between 2% and 10% of the contract price; In case of high risk prevention, the value of contract performance guarantee may be higher but must not exceed 30% of the contract price and must be approved by the competent person for investment approval; Before signing a construction contract, the principal must have a payment guarantee in accordance with the payment schedule already agreed upon in the contract.

- Regarding the retention of funds: Clause 6, Article 35 of the Government's Decree No. 46/2015 / ND-CP on quality management and maintenance of construction works, the investor shall be agreed in the contract to work with contractors participating in the construction of works for the replacement of the warranty money for construction works by bank guarantee letter of equivalent value; Bidders will be released a warranty guarantee after the warranty period has expired and the owner has confirmed the warranty.

- The contractor's fund is kept pending settlement: The Law  on Construction and the Decrees detailing this Law do not contain provisions on the retention of funds by the bidders. Article 147 of the Law on Construction, Article 22 of Decree No. 37/2015 / ND-CP has stipulated in detail the payment and settlement of construction contracts. Articles 27 and 31 of Decree No. 37/2015 / ND-CP also stipulate that the transferor's responsibility is to settle the construction contract in accordance with the stipulated time limit. The investor's retention of funds paid by the contractor for settlement or full payment of funds at the end of the settlement period shall be agreed upon by the parties and implemented in accordance with the construction contract.