Vietnamlawmagazine

Luu Tien Ngoc, Le Tuan Anh, Vuong Son Ha Vision & Associates[1] 

At the construction site of Phan Ngoc Hien Square in Ca Mau city, Ca Mau province__Photo: Kim Ha/VNA

This article introduces highlights of Decree 85/2025/ND-CP detailing a number of articles of the 2024 Law on Public Investment, particularly provisions on the decentralization of competence, order of and procedures for making investment policy decision and investment decision for programs and projects funded by capital from legal revenue sources of state agencies and public non-business units, and relevant contents.

On April 8, the Government issued Decree 85/2025/ND-CP (Decree 85) detailing a number of articles of the 2024 Public Investment Law (the Law), which was adopted by the National Assembly (NA) on November 29, 2024. Effective immediately upon signing, Decree 85 replaces Decree 40/2020/ND-CP dated April 6, 2020, as amended by Decree No. 54/2021/ND-CP dated May 21, 2021 (Decree 40).April 8, the Government issued Decree 85/2025/ND-CP (Decree 85) detailing a number of articles of the 2024 Public Investment Law (the Law), which was adopted by the National Assembly (NA) on November 29, 2024. Effective immediately upon signing, Decree 85 replaces Decree 40/2020/ND-CP dated April 6, 2020, as amended by Decree No. 54/2021/ND-CP dated May 21, 2021 (Decree 40).

Decree 85 serves as a critical legal instrument to realize major reforms introduced by the Law. Key breakthroughs in the Law include:

-  Institutionalization of pilot and specific mechanisms: For the first time, all project groups, including Groups B and C, may separate stages of compensation, support, resettlement, and site clearance into independent sub-projects. The Law also empowers the Prime Minister to assign a provincial-level People’s Committee to act as the governing body for projects spanning two or more provinces.

- Enhanced decentralization: The authority to adjust medium-term public investment plans funded by the central budget between ministries, central agencies, and localities is transferred from the NA Standing Committee to the Prime Minister. Additionally, the NA Standing Committee now also holds the authority to decide on the use of the central budget’s general reserve and unallocated capital from the central budget under medium-term public investment plans, a power previously reserved for the NA.

-  Broadened funding and implementation channels: The Law allows the use of recurrent expenditure and other lawful capital sources for project preparation. It also authorizes state enterprises, by decision of the Prime Minister, to act as governing bodies for public investment projects. Project management units and public non-business units under ministries, central agencies and localities are now permitted to propose investment policy, and capital plans may be assigned to project owners that are not affiliated units.

- Simplified procedures: The Law streamlines the formulation of medium-term and annual public investment plans. Notably, the list of projects submitted by the Government for inclusion in medium-term public investment plans is now recognized as tentative rather than final.

To facilitate the implementation of these breakthrough policies, Decree 85 provides detailed guidance on the decentralization of authority, and procedures for deciding on investment policy and approving investment in programs and projects funded by lawful revenue sources of state agencies and public non-business units.

Compared with Decree 40, Decree 85 introduces several notable updates specifically related to programs and projects financed through these lawful revenue sources.

Investment policy decision

Competence

In alignment with the major reforms introduced by the Law, Decree 85 sets out clearer rules on the competence and procedures for deciding on investment policy. Notably, it expands the authority of ministers, heads of central agencies, and chairpersons of People’s Committees at all levels to decentralize or delegate the power to make investment policy decision for Group-B and Group-C projects managed by state agencies and public non-business units under their management to the heads of such state agencies. This decentralization applies both at the central and local levels, allowing for greater autonomy within managing bodies.

For projects funded by lawful revenue sources of state agencies and public non-business units with implementation timelines extending across two consecutive medium-term public investment planning periods, Decree 85 affirms that the authorities competent to decide on investment policy for the projects will make the decision themselves and be held responsible for their decision. The making of decision on investment policy must be based on a careful assessment of the capacity to balance public investment capital and to mobilize other lawful funding sources, where applicable.

Procedurally, Decree 85 shortens the timeframe for public non-business units to report on approved investment policy decision to their managing ministry, central agency or People’s Committee from 10 days to five working days after approval. It also supplements regulatory requirements by specifying that prefeasibility study reports for Group-A projects and investment proposal reports for Group-B and -C projects must clearly indicate the intended capital structure.

In addition, Decree 85 specifies procedures for deciding on investment policy in case projects are funded by local budgets but implemented by central agencies, as well as those funded by district- or commune-level budgets and implemented by provincial- or district-level agencies. These clarifications aim to improve coordination across administrative levels and ensure consistency in investment decision-making.

Phu Yen Province Maternity and Pediatrics Hospital is under construction__Photo: VNA

Order and procedures

Decree 85 clarifies the required contents of prefeasibility study reports for Group-A projects and investment proposal reports for Group-B and Group-C projects, both of which must now include the intended capital structure.

The Decree also sets out procedures applicable to projects funded by local budgets and implemented by central agencies, as well as those funded by district- or commune-level budgets and implemented by provincial- or district-level agencies.

With regard to the documents, contents, and timing for the assessment and appraisal of prefeasibility study reports and investment proposal reports, Decree 85 introduces the following changes:

- Submission format: The submitting agency is now required to submit dossiers to the Appraisal Council or the agency in charge of appraisal in electronic form. This applies to dossiers of prefeasibility study reports, reports proposing investment policy for public investment programs, and Group-A, -B and -C projects, except dossiers containing state secrets, which remain subject to regulations on protection of state secrets. This replaces the previous requirement of 10 physical dossier sets under Decree 40.

- Capital recovery and debt payment: The content of assessment and appraisal for public investment programs now covers the possibility of capital recovery and debt payment in cases involving loans.

- Assessment content adjustment: The content of assessment and appraisal of investment policy for Group-A, -B and -C public investment projects has been revised. It now aligns with the provisions of Article 35 of the Law, replacing the more detailed project components listed in Decree 40 (including objectives, scale, form of investment, scope, location, technology, to-be-used land area, capital sources and capital-balancing capacity, ability to recover capital and pay debts in cases involving loans).

- Coordination between agencies: A new provision is added, requiring the agency assigned to assess and appraise capital sources and balancing capacity to send its opinions to the agency taking the prime charge for the assessment. Where the same agency is responsible for both the investment policy appraisal and the capital source appraisal under Article 36 of the Law, such agency must organize the assessment and appraisal of capital sources and balancing capacity.

-  Assessment timelines: The time limits for appraisal of prefeasibility study reports and investment policy proposal reports, counted from the date of receipt of a complete and valid dossier, have been shortened as follows:

+ For national target programs: 40 working days (60 days under Decree 40);

+ For other public investment programs: 30 working days (45 days under Decree 40);

+ For Group-A projects: 30 working days (45 days under Decree 40); and,

+ For Group-B and Group-C projects: 20 working days (30 days under Decree 40).

In case the dossier is incomplete or the content of the prefeasibility study report or investment policy proposal does not comply with Article 33, 34 or 35 of the Law, the Appraisal Council or agency assuming the main charge for the appraisal must send written comments to the submitting agency within five working days (10 days under Decree 40), requesting modifications or completion.

- Elimination of extensions: Decree 85 no longer permits the extension of the time limit for appraising prefeasibility study reports or investment policy proposals for programs or projects.

Dossiers and timeframes

Decree 85 introduces significant changes regarding the submission of dossiers and the timing for decision on investment policy. Notably, it abolishes the provision of Decree 40 requiring five sets of documents to be submitted to competent authorities for deciding on investment policy applicable to Group- A, -B and -C public investment programs and Group- A, -B and -C projects.

In terms of timing, Decree 85 shortens the time limits for competent authorities to issue an investment policy decision, counted from the date of receipt of a complete and valid dossier. Specifically, the time limit is reduced to 10 working days for public investment programs (excluding national target programs), seven working days for Group-A projects, and five working days for Group-B and -C projects, down from the respective 20, 15, and 10 working days stipulated in Decree 40.

In addition, within three working days from the date on which the investment policy decision is issued, reduced from 15 days under Decree 40, ministries, central agencies and localities managing programs and projects funded by the central budget are required to submit the approved decision to the Ministry of Finance. At the local level, agencies managing programs and projects funded by the state budget must forward the approved decision to the provincial-level Department of Finance and the relevant specialized agency in charge of investment management.

Classification of public investment projects

Decree 85 changes the total investment capital thresholds for classification of Group-A, -B, and -C public investment projects, as set out in Appendix I to the Decree. These changes reflect a general increase in capital thresholds compared to Decree 40, aligning with updated standards in the Law.l

Investment decision

Competence

Decree 85 introduces clearer rules on the designation of investors for public investment programs and projects, further aligning with the Law.

For projects under the management of ministries and central agencies that involve construction components, the determination of project owners must follow the procedures set out in the law on construction law.

At the local levels, People’s Committee chairpersons are competent to approve investment in programs and Group-A, -B, and -C projects of state agencies under their management. They may also delegate or decentralize the decision-making power for Group-B and -C projects to heads of subordinate agencies.

In addition, heads of public non-business units are empowered to decide on investment in programs and Group-A, -B, and -C projects within their units. These units may act as owners of projects that do not include construction components, provided they are concurrently the investment decision-makers. However, where construction is involved, the determination of project owners must comply with the construction law.

Dossiers for and contents of appraisal

Decree 85 streamlines the process for submitting dossiers for appraisal. Under the new regulation, the agency responsible for submitting the dossier must now send it to the Appraisal Council or the agency taking the prime responsibility for the appraisal. This replaces the previous requirement under Decree 40, which mandated the submission of 10 physical sets of documents. An exception is made for dossiers and documents that contain state secrets, which must continue to comply with the law on protection of state secrets.

Time limits for appraisal

Decree 85 introduces more definitive timelines for the appraisal of public investment programs and projects that do not include construction components, significantly reducing the time required compared to Decree 40. The time limit is counted from the date on which the agency in charge of the appraisal receives a complete and valid dossier and is now specified as follows:

- For national target programs: 40 working days (reduced from 60 days under Decree 40);

- For public investment programs (excluding national target programs): 30 working days (reduced from 45 days);

- For Group-A projects: 30 working days (like Decree 40);

- For Group-B and -C projects: 20 working days (reduced from 30 days).

In case the dossier is incomplete or the content of the program or project feasibility study report does not comply with Article 47 of the Law, the Appraisal Council or the in-charge agency must issue written feedback within three working days (reduced from 10 days under Decree 40), requesting necessary modifications or completion.

Additionally, Decree 85 abolishes previous provisions concerning internal appraisal timelines and the extension of appraisal periods, further streamlining the appraisal process.

Dossier submission

Decree 85 eliminates the requirement under Decree 40 for submitting five sets of dossiers when seeking approval for public investment programs and projects. This simplification aligns with broader efforts to streamline administrative procedures.

The Decree also changes the scope of dossier submission requirements related to projects on compensation, support, resettlement, and site clearance that are permitted to be separated into independent projects under the Law. Under the new provision, the dossier requirement now applies not only to projects separated from national important projects in Group A, as previously stipulated in Decree 40, but also to those in Groups B and C. The classification of such projects is determined according to the investment policy decision.

Contents of and timing for making investment decision

Decree 85 amends the provisions regarding time limits for deciding on investment in public investment programs and projects, which will be counted from the date on which the competent authority receives a complete and valid dossier. Specifically, the time limit for making investment decision is now 10 working days for public investment programs, reduced from 20 days under Decree 40. For Group-A projects, the time limit is shortened to seven working days, down from 15, while for Group-B and -C projects, the decision must be made within five working days, instead of the previous 10.

In addition, within five working days from the date the investment decision is issued, reduced from 15 working days under Decree 40, ministries, central agencies and localities managing programs and projects funded by the central budget are required to send the approved decision to the Ministry of Finance. Meanwhile, agencies managing programs and projects funded by the state budget at the local level must send the investment decision to the provincial-level Department of Finance and the specialized agency in charge of investment management at the same level.

Management of implementation of investment preparation tasks, planning tasks, and public investment projects without construction components

Decree 85 introduces adjustments to the procedures and time limits for managing the implementation of investment preparation tasks and public investment projects that do not involve construction components. Notably, it shortens the time limits for the appraisal of designs and investment estimates, as well as for their approval.

Specifically, the time limit for the competent unit assigned the appraisal duty to complete its task, counted from the date of receipt of a complete and valid dossier, is now capped at 25 working days for Group-A projects (reduced from 40 days under Decree 40), 20 working days for Group-B projects (down from 30 days), and 10 working days for Group-C projects (cut from 20 days).

Following appraisal, the timeframe for the competent authority to approve the design and project estimates has also been reduced. The new limits are 10 working days for Group-A projects (previously 15 days), seven working days for Group-B projects (previously 10 days), and three working days for Group-C projects (previously five days), calculated from the date of receipt of a complete and valid dossier.

Formulation, approval, assignment, implementation, monitoring, inspection, and evaluation of public investment plans

Decree 85 also provides updated guidance on the public investment planning process. It introduces new provisions on the sequence for formulating, approving, and assigning medium-term or annual public investment plans. This includes plans funded by the state budget as well as those funded by lawful capital sources of state agencies and public non-business units, along with regulations on the time limits for capital allocation to support project implementation.

Furthermore, the Decree revises existing rules related to the implementation of public investment plans, the reporting of progress to competent authorities, and the monitoring, inspection and evaluation of such plans. At the same time, it abolishes the provisions on advance payment of investment capital, as well as those on the extension of implementation periods and disbursement schedules for annual state budget investment plans.-

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