CIRCULAR

PROVIDING GUIDANCE ON IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE GOVERNMENT’S DECREE NO. 117/2007/ND-CP DATED JULY 11, 2007 ON PRODUCTION, SUPPLY AND CONSUMPTION OF CLEAN WATER

Pursuant to the Government's Decree No. 36/2003/ND-CP dated April 4, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government’s Decree No. 117/2007/ND-CP dated July 11, 2007 on production, supply and consumption of clean water;

The Ministry of Construction hereby provides guidance on several specific contents about clean water quality, public submission and supervision procedures, water supply planning, water supplier selection, determination of water supply areas and ratification of the agreement on rendering of water supply, water supply connection services, the contract for water supply service, inspection of water meter equipment and other related issues, which are addressed in the Government’s Decree No. 117/2007/ND-CP dated July 11, 2007 on production, supply and consumption of clean water (hereinafter referred to as Decree No. 117/2007/ND-CP), as follows:

I. CLEAN WATER QUALITY

Clean water quality shall be subject to provisions laid down in Clause 1 Article 4 of the Decree No. 117/2007/ND-CP and shall be specified hereunder:

1. The quality of clean water used for domestic consumption purposes must conform to the drinking water hygiene standards promulgated by the Minister of Health. While the Ministry of Health has not yet issued new standards regulations in accordance with the Law on Standards and Technical Regulations No. 68/2006/QH11, the drinking water hygiene standards, annexed to the Decision No. 1329/2002/BYT/QD dated April 18, 2002 of the Minister of Health shall be temporarily applied.

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3. As for an existing water supply system where the quality of clean water has not yet satisfied the prescribed standards promulgated by the Ministry of Health, the water supply unit and the body signing the agreement on rendering of water supply services shall be obliged to evaluate and identify causes, take remedial actions and set the schedule of improvement of clean water quality according to the provisions of Point dd, Clause 2, Article 31 of Decree No. 117/2007/ND-CP, which elaborates on specific deadlines for conformance to clean water quality regulations.

II. PUBLIC SUBMISSION AND SUPERVISION PROCEDURES

Public means a collective of residents living in the same area and sharing the same interests in or benefits of public utilities available within that area, including water supply service.   As clean water is an product essential for human life and public health, in addition to raising awareness of economical use of water, payment obligations and protection of water supply facilities, etc., public involvement in water supply activities may guarantee the people's mastery over inspection and supervision of water supply activities, contributing to improving the feasibility of water supply development programs and projects, and promoting investment efficiency and sustainable development.

1. Public submission procedures:

When developing investment projects on the construction of new water supply works in areas where there is no centralized water supply system, investors and project formulation consulting organizations shall have to cooperate with local authorities in conducting sociological investigations and public polls within the scope of these projects’ service regarding connection commitments and willingness to pay for water supply services. Prior to a public poll, the survey community must be informed of basic project information about investment outlay and service quality after completion, water pricing plans, land use demands and execution progress.

As for investment projects on construction of water supply works on the commune or townlet scale, the public poll should be carried out at family households. For larger-scale projects, investors shall opt for a survey form, such as a household poll, a concentrated open poll carried out at residential quarters and mass organizations, and an open poll conducted at a number of typical areas.   

A water supply service contract must provide detailed information on the contact address of the department and the person responsible for receiving feedbacks, complaints and denunciations from consumers about functional failure, service quality, sabotage or misconduct relating to water supply activities within their remit. Annual reports sent by water supply units to competent authorities that have already entered into agreements on rendering of water supply services should provide information on the receipt and handling of feedbacks from consumers.

The community may involve in the public poll by:

- Completing the survey form.

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- Taking part in the poll through mass socio-economic and professional organizations, such as women’s association, consumers’ association, war veterans association and fatherland front committee, etc.

- Using other forms of giving opinions such as letters and contributing opinions in person, etc.

2. Public supervision:

After being approved by competent authorities, water supply planning schemes shall be made known to the public in accordance with the law provisions on construction planning. 

After signing an agreement on rendering of water supply services, the People’s Committee shall advise the People’s Council of the same level and socio-political organizations, and carry out communications and awareness-raising programs to involve the public in executing, inspecting and supervising execution of such agreement. 

Public supervision tasks shall include:

- Supervising conformity with the planning scheme which has already been approved and the agreement on rendering of water supply services which has already been entered into.

- Supervising the process of execution of water supply projects.

- Supervising the quality of clean water supply services by assessing the following factors, such as clean water quality, water pump pressure, water flow rate, water supply continuity and customer care service, etc.

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1. With respect to any water supply planning scheme organized as a separate planning scheme as stipulated in Clause 2, Article 12 of the Decree No. 117, notwithstanding compliance with the Decree No. 117/2007/ND-CP, other related works, such as collecting opinions on that planning scheme, giving public statement of that planning scheme and organizing management of that planning scheme, shall have to abide by the law provisions on construction planning.

2. Upon research on formulation and revision of the master socio-economic development plan, construction planning scheme, planning scheme for abstraction, use and development of water resources, and sectoral development planning scheme, of which contents are related to water supply, it shall be necessary to consult and coordinate with the water supply planning scheme (if any) in order to ensure consistency and compatibility with each other.

3. Implementation of water supply planning schemes already prepared and approved by local authorities prior to the effective date of Decree No. 117/2007/ND-CP shall be continued according to the approved planning scheme.

4. With respect to water supply planning schemes that have design briefs which have already been approved, those that are under development and those that have not been approved yet:

a) Review of the contents of design briefs shall be conducted. In case of conformance to the provisions of the Decree No. 117/2007/ND-CP, design briefs shall not need to be re-approved; otherwise, in case of inconformity with the provisions of the Decree No. 117/2007/ND-CP, adjustments shall be required and the person who has approved design briefs shall approve these adjustments to design briefs.

b) Appraisal and approval of a planning scheme shall be subject to the provisions of the Decree No. 117/2007/ND-CP.

IV. WATER SUPPLIER SELECTION, DETERMINATION OF WATER SUPPLY AREAS AND RATIFICATION OF THE AGREEMENT ON RENDERING OF WATER SUPPLY

The selection of a water supply unit for negotiation and conclusion of the agreement on rendering of water supply services between the People's Committee and the water supply unit shall be subject to the provisions of Article 29 of Decree No. 117/2007/ND- CP; the water supply area is the area with defined boundaries where the water supply unit is obliged to supply clean water to consumers living within that area; ​​a water supply unit’s identification of a water service zone shall be conformable to Article 32 of Decree No. 117/2007/ND-CP.

The agreement on rendering of water supply services is a legal document signed between the People's Committee of a city, a township or townlet within an urban area and the People's Committee of a commune within a rural area (shortly called the People’s Committee) on one side, and the water supply unit on the other side, which prescribes contractual rights and obligations binding on both parties with regard to fulfillment of commitments to provide water supply services in accordance with regulations in force, ensures equivalence between the water supply unit’s legal interests and the community’s, and is aimed at improving the quality of water supply services provided at a reasonable price and under the state control.

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In cases where the water supply unit has the number of water supply service zones under the control of different separate administrative divisions, a water supply service agreement shall be signed with each of such separate administrative units.

In a water service zone defined by ​​a water supply unit with a number of affiliated units, the People's Committee shall enter into only one agreement on rendering of water supply services with that water supply unit. Delegation of authority over sub-zones or different stages of water supply activities to its subordinate units shall be decided by the water supply unit with a view to ensuring consistency with the contents of the signed water supply service agreement.

V. CONNECTION

The connection of consumers’ premises to the water supply network of a water supply unit shall be subject to the provisions of Articles from 39 to 43 of Decree No. 117/2007/ND-CP.

The water supply unit shall be responsible for making investment in synchronizing its water supply facilities with the point of connection to consumers’ households, including the water meter installed in the defined service zone, while the connection cost shall be included in the investment outlay on construction of the water supply network and shall be accrued to the clean water price approved by the People's Committee of a province or centrally-affiliated city. The deadline for adjusting and approving the clean water price according to new regulations shall not be later than the time limit specified in Clause 3, Article 64 of the Decree No. 117/2007/ND-CP.

Regulation on the minimum volume of clean water stipulated in Clause 2, Article 42 of the Decree No. 117/2007/ND-CP shall be applied to household consumers.  In cases where there are more than one household using the same water meter, the water supply unit shall be authorized to determine the minimum volume of clean water according to the rule of conversion of clean water volume consumed by a household with an average of 4 persons (4m³/household/month).

VI. WATER SUPPLY SERVICE CONTRACT

The water supply service contract is a legal document which is signed between the water supply unit and the consumer, and conforms to the provisions of Articles from 44 to 50 of the Decree No. 117/2007/ND-CP. The water supply service contract shall be divided into 02 types:

- Retail water supply service contract.

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1. The contents of the retail water supply service contract must display the basic information about the customer in need of the water supply service connection to build a customer database facilitating management activities; must specify the rights and obligations of both contracting parties; terms and conditions regarding service quality, clean water price, payment mode; must state the provisions of the law on water supply related to the water supply unit and the consumer. Based on the sample of the retail water supply service contract given in the Appendix 2 of this Circular and the actual conditions, the water supply unit shall make the service contract appropriate for use within a respective locality.

2. The wholesale water supply service contract shall be entered into between the wholesale water supply unit and the retail water supply unit. The contents of the wholesale water supply service unit must describe rights and obligations of all contracting parties; conditions regarding water supply services, clean water wholesale price and payment mode; regulations on maintenance of stability and safety for water supply services and quality of supplied clean water.    Based on the sample of the wholesale water supply service contract given in the Appendix 3 of this Circular, and the actual conditions, the wholesale water supply unit and the retail water supply unit shall negotiate specific contractual terms and conditions.

VII. WATER METERING AND REFUND OF OVERPAYMENT ON WATER BILLS DUE TO INACCURATE WATER METERING

Water metering equipment must be inspected under the provisions of Article 50 of the Decree No. 117/2007/ND-CP.  In cases where the independent inspecting body discovers that the actual deviation of a water meter is greater than the permissible deviation, the water supply unit shall have to refund the amount of overpayment to consumers. Bases for determination of water volume used for calculation of the amount of overpayment to be refunded shall be comprised of the followings:

- Legally permissible deviation.

- Actual deviation determined by the independent inspecting body

- Time span from the time of the abnormally surging volume of clean water compared to the average clean water consumption recorded previously to the time of removal of water meter for inspection purposes.

VIII. EFFECT

This Circular shall be applied nationwide and shall enter into force 15 days after the date of its publication in the Official Gazette.   In the course of implementation, if there is any difficulty arising, the Ministry of Construction should be informed to take its possible actions.

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PP. THE MINISTER
THE DEPUTY MINISTER




Nguyen Van Lien

APPENDIX 1

SAMPLE AGREEMENT ON RENDERING OF WATER SUPPLY SERVICES
(Issued together with the Circular No. 01/2008/TT-BXD dated January 2, 2008 of the Minister of Construction)

THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness
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AGREEMENT ON RENDERING OF WATER SUPPLY SERVICES

Pursuant to the Government’s Decree No. 117/2007/ND-CP dated July 11, 2007 on production, supply and consumption of clean water.

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Pursuant to the Decision No…dated (dd/mm/yyyy)… of the People’s Committee of… (provincial level) issuing the Regulations on water supply operations carried out in the province or city; Pursuant to...

Today, on (dd/mm/yyyy)…….,

At (place):……………………….

We, the undersigned, are:

I. Representative of the local authority (briefly called Party A)

Mr.………………………………………………………Telephone:………………………

Title:………………………………………………………………………………………

According to the authorization letter No……………./………dated (dd/mm/yyyy)…………

of………………………………………………………………………………………..

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II. Representative of the water supply unit (briefly called Party B)

Name:……………………………………………Telephone:..………………………….

Mr.………………………………………………………………………………

Title:………………………………………………………………………………………

According to the authorization letter No……………./………dated (dd/mm/yyyy)…………

of………………………………………………………………………………………..

Headquarter:……………………………………………………………………………

consent to enter into the agreement on rendering of water supply services with the following terms and conditions:

Article 1. Purposes

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Article 2. Definitions and interpretations

For the purposes of this Agreement, the terms shall be construed as follows:   

“Clean water operation” means any related activity carried out in the clean water production, supply and consumption sector, including planning, design consultancy, investment, construction, management, operation, wholesaling and retailing, and use of clean water.

“Water supply service” means any activity related to an organization or individual doing clean water wholesale and retail business.

“Water supply unit” means any organization or individual performing a part or all of abstraction, production, transmission, wholesaling and retailing of clean water.

Article 3. Water supply service zones

This clause shall prescribe boundaries and scope within which the water supply unit is obliged to supply clean water to consumers, and identify existing boundaries where clean water is supplied and other areas where the water supply unit is obliged to develop facilities necessary for connection to the water supply network as prescribed in Article 32 of the Decree No. 117/2007/ND-CP.

This section shall also prescribe cases in which adjustments to water supply zones need to be made; application, documentation requirements for and authority over adjustments to water supply service zones.

This section shall include the assessment report on water supply operations within a specified locality, describing in detail connecting facilities, piping system and quality of existing water supply services. 

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This Article shall provide specific regulations on service quality standards that oblige the water supply unit to comply with competent regulatory authorities' regulations with respect to:  

- Water quality

- Water pumping pressure

- Water use standards

- Water supply continuity

- Others (e.g. water loss rate and revenue loss rate; business efficiency of the water supply unit, etc.) 

This section shall elaborate on timeline and schedule of improvement and upgrade of service quality standards in the event that existing water supply service quality fails to meet the aforesaid regulations with respect to each standard of service quality. 

Article 5. Plans and policies for development of water supply services

The plan for gradual expansion of coverage of water supply services into areas within defined service zones. 

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The proposal for implementation of concentrated investment projects, network upgrading and development programs.

This section shall also prescribe application and documentation requirements for and authority over approval and modification of the water supply service development plan.

Article 6. Estimated budget for implementation of the water supply service development plan 

Estimating the budget for implementation of the water supply service development plan.

Determining possible funding sources (e.g. equity capital, state subsidies, borrowed funds, other mobilized capital, etc.)

Describing incentive policies of local authorities (if any) regarding budget allocation and funding arrangement support, etc.

Article 7. Clean water price

This section shall specify issues relating to clean water price, including cost price and selling price applied to specific consumers, price increase schedule, price adjustment principles; plans for grant of local government budget’s subsidies; application and documentation requirements and authority to grant approval for price adjustment.

Article 8. Rights and obligations of the water supply unit

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Article 9. Powers and responsibilities of the local authority

This section shall prescribe powers and responsibilities of the local authority with respect to organization, management and supervision of water supply operations of the water supply unit within a specified locality.

This section shall elaborate on delegation of authority to and powers of senior water supply units related to management and supervision of junior water supply units operating within its ambit. 

Article 10. Responsibilities for cooperation between the local authority and the water supply unit in management and operation of the water supply system 

This section shall prescribe which activities need cooperation and agreement between the local authority and the water supply unit in the process of formulation, investment, construction, operation and management of the water supply system at a respective locality.

This section shall also prescribe methods and manners of cooperation, and cooperating senior units.

Article 11. Transfer of the water supply service business right

This section shall prescribe the need to hire the subcontractor.

This section shall prescribe circumstances, procedures of and authority to deal with a partial or total transfer of the water supply service business right within a respective locality to another water supply unit.

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This section shall deal with settlement of disputes and violations arising from implementation of the agreement on rendering of water supply services in accordance with the Decree and other relevant laws.

Article 13. Modification of the agreement on rendering of water supply services

This section shall deal with cases in which modification and supplementation the agreement on rendering of water supply services are required (whenever there is any change in standards regulations and standards of quality of water supply services and state regulatory policies, etc.); procedures for and authority over such modification.

Article 14. Termination of the agreement on rendering of water supply services

This section shall deal with cases in which the agreement on rendering of water supply services is terminated if either party commits serious violations against terms and conditions of this agreement; procedures for and authority over handling of difficulties of both parties in case of termination of the agreement on rendering of water supply services.

Article 15. Force majeure

This section shall set out provisions on unexpected and irresistible events or circumstances that cause the water supply unit inability to perform or delay in performing all or a part of obligations defined in the agreement, such as war, hostility, natural disasters or environmental incidents, etc.

This section shall describe mandatory procedures for waiver of liability in case force majeure events take place.

Article 16. Other clauses

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This section shall prescribe validity of the agreement on rendering of water supply services.

Annexure

- Description of water supply service zones

- Current status report

- Plan for development of water supply services

- Clean water pricing plans

- Other instruments (if any)

Representative of the water supply unit
(signature and stamp)

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APPENDIX 2

SAMPLE WATER SUPPLY SERVICE CONTRACT APPLICABLE IN CASE OF RETAILING OF CLEAN WATER
(Issued together with the Circular No. 01/2008/TT-BXD dated January 2, 2008 of the Minister of Construction)

Cover page

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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WATER SUPPLY UNIT'S EMBLEM (IF ANY)

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No……../……..

Buyer………………………………………………………………………………………..

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Address ……………………………………………………………………………………

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Consumer's identity number:

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Water consumption point’s numbers:

Address of the water supply unit:

THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness
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Pursuant to the Civil Code No. 33/2005/QH11 of the National Assembly of the Socialist Republic of Vietnam;

Pursuant to the Government’s Decree No. 117/2007/ND-CP dated July 11, 2007 on production, supply and consumption of clean water.

Pursuant to the Circular No…/2008/TT-BXD dated (dd/mm/2008)…of the Minister of Construction providing guidance on implementation of the Government’s Decree No. 117/2007/ND-CP dated July 11, 2007 on production, supply and consumption of clean water. 

Pursuant to the Decision No…dated (dd/mm/yyyy)… of the People’s Committee of… (provincial level) issuing the Regulations on production, supply and consumption of clean water at the province.  

Today, on (dd/mm/yyyy)…….,

At (place):……………………….

We, the undersigned, are:

I. Service supplier (briefly called Party A)

Name: …………………………………………………Telephone:.....................................

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Title:………………………………………………………………………………………

According to the authorization letter No……………./………dated (dd/mm/yyyy)…………

of………………………………………………………………………………………..

Headquarter:……………………………………………………………………………

Account No……………………………………opened at...............................................

Tax identification number:…………………………………………………………………………

II. Consumer (briefly called Party B)

Householder’s name (or the entity’s name) .........................................................................

Or the authorized person’s name…………………………………………………………

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Permanent residence (Office address)…………………………………………………………

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Water buying address ……………………………………………………………………………

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Account No……………………………………opened at...............................................

Tax identification number………………………….  Telephone………………………………

consent to enter into this water supply service contract with the following terms and conditions:

Article 1. Objectives of the contract

This section shall describe objectives of the contract: buying and selling clean water conforming to service quality standards as agreed upon in this contract.

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This section shall deal with quality of the service provided at the connection point, including quality of clean water, water pumping pressure, flow rate, continuity of service provided in conformity with standards issued by the state regulatory authority and the agreement on rendering of water supply services that the water supply unit has entered into.

Article 3. Clean water price

This section shall set out regulations on prices of clean water applied to different consumers and for different uses, in conformity with the pricelist promulgated by the provincial-level People's Committee and the approved plan for pricing of clean water for consumption; the principles of application of new water prices upon receipt of the price adjustment decision from the provincial People's Committee.

Article 4. Minimum volume of clean water for which payment must be made

This shall be applicable to household consumers. This section shall prescribe the minimum volume of clean water that payment must be made in accordance with the Decree and the decision of the provincial-level People’s Committee.

Article 5. Payment method

This section shall specify billing cycle, payment notice, payment location and payment form.

Article 6. Rights and obligations of Party A

This section shall deal with rights and obligations of Party A as provided in the Decree and other relevant laws.

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This section shall deal with rights and obligations of Party B as provided in the Decree and other relevant laws.

Article 8. Contract amendment

This section shall specify cases in which this contract is amended under the provisions of this Decree and other relevant laws.

Article 9. Contract termination

This section shall deal with cases in which this contract is terminated and settlement of difficulties faced by both parties in case of termination of this contract.

Article 10. Settlement of disputes and violations arising from this contract

This section shall deal with settlement of disputes and violations arising from implementation of this contract in accordance with this Decree and other relevant laws.

Article 11. Other agreements (if any)

Article 12. General clause

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Service supplier
(signature and stamp)

Consumer
(signature and stamp)

ANNEXURE TO THE WATER SUPPLY SERVICE CONTRACT

(this is an integral part of this contract)

Section 1

1. Consumer’s information

Registration time

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Number of households/ connections

Number of persons

Allowance

Water consumption purpose

Signature

Domestic purpose

Public service provision purpose

Business purpose

Service provision purpose

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Party B

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2. Information regarding service connection

- Location of the point of connection…………………………………………………………..

- Water meter D…………………………type……………………………………………..

Series No.…………………………………………………………installed at…………………

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Date (dd/mm/yyyy)…………..

Prepared by

(signature and full name)

Section 2:

SPECIFIC REGULATIONS FOR IMPLEMENTATION OF THE WATER SUPPLY SERVICE CONTRACT

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- Prohibited acts and handling of violations

- Rights and obligations of contracting parties

- Point of connection

- Location of installation of water meter

- Connection agreement

- Exemption from connection service

- Suspension of water supply services

- Contract termination

- Defects and compensation

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- Water bill payment

- Water metering

- Inspection of water metering equipment

- Protection of the water supply system

- Disputes and handling of contract violations

- Resolution of complaints or denunciations

Section 3:

Address and telephone of the in-charge unit, department or person through which the consumer may contact for the following purposes:

- Raising queries and finding answers

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- Reporting, alleging and taking actions against violations

- Informing water meter readings and collection of water bill payments

APPENDIX 3

SAMPLE WATER SUPPLY SERVICE CONTRACT APPLICABLE IN CASE OF WHOLESALING OF CLEAN WATER
(Issued together with the Circular No. 01/2008/TT-BXD dated January 2, 2008 of the Minister of Construction)

SAMPLE CLEAN WATER WHOLESALING CONTRACT

This contract must describe the followings:

1. Representatives of contracting parties

Name, address, telephone, account and other contents of contracting parties.

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Legal bases for implementation of this contract.

3. Definitions and interpretations

4. Rights and obligations of contracting parties

5. Validity period of this contract

6. Water supply time

Water supply time shall be defined and agreed upon by both parties. Obligations of contracting parties in meeting the stipulated water dispensing schedule.

7. Supplied volume of clean water

This section shall describe volume of clean water that both parties commit to delivering and receiving at the point of connection, particular regulations (if any) on the minimum and maximum volume of clean water upon delivery and receipt, water bill payment made on a daily, monthly or seasonal basis. 

8. Clean water quality

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9. Water pumping pressure

This section shall specify standards regarding water pressure required at the point of connection. Obligations of the seller in maintaining water pumping pressure.

10. Water supply continuity

This section shall set out regulations on continuity of water supply operations, maintenance of safety for water supply activities; obligations of the seller in ensuring continuity of water supply operations.

11. Water metering

This section shall provide for installation of water meters, water pressure gauge, calibration, testing, sealing and reading of water meters and determination of water volume, etc.

12. Clean water wholesale price

This section shall specify the clean water wholesale price and price adjustment principles.

13. Water bills and payment conditions

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14. Force majeure

This section shall set out provisions on unexpected and irresistible events or circumstances that cause the water supply unit inability to perform or delay in performing all or a part of obligations defined in this contract, such as war, hostility, natural disasters or environmental incidents, etc.

This section shall describe mandatory procedures for waiver of liability in case force majeure events take place.

15. Contract termination

This section shall specify conditions and procedures for termination of this contract.

16. Compensation and handling of violations

This section shall describe errors through either party's fault that may affect the other party’s legal interests; responsibilities for paying compensations assumed by the defaulting party.

17. Resolution of disputes

This section shall prescribe the settlement of disputes between contracting parties.

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This section shall specify conditions and measures in case of either party’s transfer of a part or all of contractual rights and obligations to any third party.

19. Contract amendment

This section shall prescribe cases in which amendments to this contract are allowed and conditions for making such amendments.

20. Other provisions

This section shall prescribe rights to provide and receive materials related to this contract, inspection and supervision of execution of this contract, etc.

Thông tư 01/2008/TT-BXD hướng dẫn thực hiện Nghị định 117/2007/NĐ-CP về sản xuất, cung cấp và tiêu thụ nước sạch do Bộ Xây dựng ban hành