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【Title of Regulation】Procedures for the Management of Chemical Industry Construction Projects 【Issuing Authority】Ministry of Chemical Industry 【Issuance Date】August 26, 1997 Procedures for the Management of Chemical Industry Construction Projects Ministry of Chemical Industry Chapter 1 General Provisions Article 1 Project construction management is a systematic task that involves a wide range of aspects, spans over a long period of time, and requires high levels of technical expertise. In order to strengthen the whole-process management of chemical engineering construction projects, ensure the engineering quality and construction progress of such projects, maximize the return on investment, and promote the sustainable, rapid, and healthy development of the national economy, these management procedures have been formulated in accordance with the relevant current regulations and taking into account the characteristics of chemical engineering construction. Article 2: The chemical engineering construction projects referred to in these administrative procedures include large and medium-sized capital construction projects that are included in the ** national or local fixed asset investment plans, as well as technical transformation projects above a certain scale. For chemical projects designated as **key construction projects, in addition to complying with the **Planning Commission’s **Measures for the Management of Key Construction Projects. The specific procedures shall also be followed in accordance with these management procedures. Article 3: The scope of management covered by these procedures for chemical engineering construction projects includes the period from the **approval for the official initiation of the project until the preparation of the feasibility study report. The entire range of construction management tasks, including the preparation and review of environmental impact assessment reports and preliminary design documents, bidding processes, preparations for commencement of work, project construction, preparations for production, chemical plant commissioning, production assessments, and all the way up to the completion acceptance of the project. Article 4: The planning and construction management departments of the Ministry of the Chemical Industry are responsible for the supervision and management of construction projects in the chemical industry. The chemical industry departments (bureaus, head offices) in various provinces, autonomous regions, and municipalities directly under the Central Government are responsible for the supervision and management of chemical projects within their respective administrative areas. They also organize, participate in, and cooperate with relevant departments as well as the comprehensive management departments of various provinces, regions, and cities to ensure proper management and coordination of chemical project construction. Chapter 2 Management of Pre-project Preparation Article 5 Pre-project preparation work refers to the main tasks carried out from the initiation of a construction project until its approval for commencement. For all projects included in the preliminary construction work plan, there must be an approved project proposal; once the project proposal is approved, the project is considered approved for implementation. The project proposal is prepared by the entity responsible for initiating the project, in accordance with the long-term plans for national economic and social development, relevant industrial policies, industry and regional development plans, as well as relevant laws and regulations governing investment and construction. For large and medium-sized capital construction projects as well as technical transformation projects above a certain scale, a preliminary feasibility study report must be attached when submitting the project proposal. The project proposal and the preliminary feasibility study report are prepared by qualified planning, design firms or engineering consulting firms, commissioned by the entity that prepared the project proposal. Monthly proposals for large and medium-sized capital construction projects are submitted to the **Planning Commission for approval. Project proposals for technical transformation projects above a certain scale are submitted to the **Economic and Trade Commission for approval. The contents and requirements for preparing project proposals shall be in accordance with the \"Regulations on the Contents and Depth of Project Proposals for Chemical Engineering Construction Projects\". Article 6: After a project is approved for initiation, a feasibility study report must be prepared and submitted for approval. The feasibility study report should be prepared based on the approval documents for the project proposal issued by ** or the relevant authorities. In accordance with the long-term plans for national economic and social development, as well as industry and regional development plans, as well as the requirements of ** industrial policies and technical policies, further analysis should be conducted regarding the technical, engineering, environmental, and economic aspects of the project. The feasibility study report is prepared by a qualified design firm or engineering consulting firm, commissioned by the entity responsible for preparing the project. Feasibility study reports for large and medium-sized capital construction projects are submitted to the **Planning Commission for approval. Feasibility study reports for technical transformation projects above a certain scale are submitted to the **Economic and Trade Commission for approval. The contents and requirements for preparing feasibility study reports shall be in accordance with the \"Regulations on the Contents and Depth of Feasibility Study Reports for Chemical Engineering Construction Projects\". Article 7 Chemical construction projects must adhere to the principle of integrating economic benefits, social benefits, and environmental benefits. Chemical construction projects should employ advanced processes that generate no waste or only minimal amounts of waste, use raw materials that are non-toxic or have low toxicity, and utilize sophisticated and efficient waste treatment facilities. All chemical projects built on the basis of existing enterprises should, under economically reasonable and technically feasible conditions, address the original pollution caused by those enterprises as well. After the project is put into operation, the pollutants emitted must meet **and local standards. It is necessary to strictly enforce the approval system for environmental impact assessment reports, as well as the \"three simultaneities\" system, which requires that facilities for preventing pollution and other environmental hazards be designed, constructed, and put into use simultaneously with the main project itself. The project environmental impact assessment report shall be submitted together with the project feasibility study report. The environmental protection work for chemical construction projects is carried out in accordance with the \"Several Provisions on the Environmental Protection Management of Chemical Industry Construction Projects\". Article 8: After the approval of the project feasibility study report, a project legal entity shall be formally established in accordance with the **Planning Commission’s Interim Provisions on Implementing the Legal Entity Responsibility System for Construction Projects. The legal entities responsible for large and medium-sized chemical industry infrastructure projects must file records with the construction management department of the Ministry of Chemical Industry. The project owner is responsible for the entire process of the project, including planning, fundraising, construction and implementation, operation and production, debt repayment, as well as the preservation and appreciation of assets. Article 9: Once the project legal entity is determined, a management organization shall be established, various rules and regulations shall be formulated, and a certain number of engineering and technical management personnel shall be assigned. For large and medium-sized construction projects, management methods such as engineering general contracting and construction supervision should be determined based on the actual circumstances. In cases where self-management is adopted, an application must be submitted to the construction management department of the Ministry of Chemical Industry for qualification review and approval. The units responsible for the general contracting of projects and construction supervision must possess the appropriate qualifications to ensure effective control over aspects such as project progress, quality, funding, and production preparation, thereby completing the construction tasks assigned. Article 10: Once the project feasibility study report is approved by **, the preparation of the preliminary engineering design can proceed. The preliminary design of a project must be based on the project feasibility study report to determine the design principles, design standards, design solutions, and key technical issues, such as the overall process flow, production methods, plant layout, transportation arrangements, the methods and quantities of water, electricity, and steam supply, the selection of key equipment and instruments, as well as aspects related to fire safety, occupational health, industrial hygiene, environmental protection, and the estimated cost of the project. Engineering design must be prepared by a qualified design firm. The contents and requirements for preparing the preliminary design of a project shall be in accordance with the \"Regulations on the Depth of Content for the Preliminary Design of Chemical Plants\" and the \"Regulations on the Content and Depth of Preliminary Design for Chemical Mining Enterprises\". Article 11: Once the preliminary design of the project is completed, it can be submitted for approval. The preliminary design review for the introduced equipment must be carried out after the technical annex of the introduction contract and the commercial contract are finalized. If there are significant changes in the technology introduction plan, the method of introduction, or the feasibility study report, it is necessary to submit a report to the main reviewing department in charge of the design before the contract comes into effect, addressing aspects such as the necessity, reliability, advancement, and economic viability of the technology to be introduced. The preliminary design is an important part of engineering design; it serves as the basis for preparing construction drawings, planning annual schedules, and arranging orders for major equipment. After the preparation of the preliminary design documents, they are submitted to the competent authority responsible for project design review for approval. The preliminary design review for a project is a process in which the supervising department organizes personnel from relevant units and experts to assess whether the preliminary design complies with relevant guidelines, policies, industry regulations and standards, meets the requirements of the feasibility study, is practical, safe and suitable for use, technologically advanced and reliable, as well as economically reasonable. It serves as a means to further optimize the design. The construction management department of the Ministry of Chemical Industry is responsible for reviewing the preliminary design of chemical industry construction projects. The construction management departments of the chemical industry departments (bureaus, head offices) in various provinces, autonomous regions, and municipalities shall participate in and cooperate with **the relevant departments as well as the comprehensive management departments of these provinces, autonomous regions, and municipalities to organize and coordinate the review of project designs. The management of preliminary design review is carried out in accordance with the \"Administrative Measures for Preliminary Design Review of Chemical Engineering Construction Projects\". Article 12 In accordance with the construction period determined in the project feasibility study report or preliminary design, the project owner shall organize the main design and construction units to prepare an overall construction control plan and a mid-term construction control plan. The overall planning approach involves incorporating all aspects related to the project phase prior to commencement and during construction – such as funding, construction activities, external affairs, equipment and materials, production preparation, commissioning, evaluation, final acceptance, coordination among various parties, and project organization – into a plan based on the principles of systems engineering. This allows for rational arrangement and comprehensive consideration of these elements, ensuring that the key milestones are met and the overall project schedule is adhered to. The preparation of a comprehensive control plan for construction can be carried out in accordance with the requirements set out in the \"Measures for the Preparation and Management of Comprehensive Control Plans for Capital Construction Projects\" and the \"Circular on Formulating Medium-term Comprehensive Plans for the Construction of Introduced Projects\". Article 13 In accordance with **provisions, tendering procedures shall be carried out for engineering design, construction, equipment, supervision, etc. In tendering and bidding processes, no department or region shall implement protectionist policies. It is necessary to fully consider the particularities and complexity of chemical production facilities, strictly evaluate the qualifications of bidding companies, and select the best ones for tasks such as design, construction, equipment supply, general contracting, and supervision. **For the design and construction bidding of key projects and the main structures of large and medium-sized chemical projects, the bidders must be entities that hold Class A qualifications for chemical engineering design and Class 1 qualifications for chemical engineering construction. The work related to qualification review, bid evaluation, and selection of the winning bidder shall be carried out under the guidance of the chemical industry authorities in the respective provinces, autonomous regions, and municipalities, as well as the construction management departments of the Ministry of Chemical Industry. When evaluating and selecting bids, it is necessary to comprehensively assess factors such as the team’s competence, management level, technical equipment, and financial condition, rather than making a decision solely based on the bid price. The bidding process for chemical engineering construction projects is carried out in accordance with the **Ministry of Economy and Trade’s Regulations on Bidding and Tendering for Mechanical and Electrical Equipment**, the Ministry of Construction’s Guidelines for Managing Bidding and Tendering in Engineering Construction, as well as the Ministry of Chemical Industry’s Rules for Managing Bidding and Tendering in Chemical Engineering Construction Projects, the Interim Regulations on the Management of Supervision Work in the Chemical Industry, and other relevant regulations. Article 14: Before the commencement of a construction project, an audit shall be carried out in accordance with the requirements set forth in the Interim Provisions on Audit Handling of Construction Projects issued by the Audit Office, the **Planning Commission, the Ministry of Finance, the **Economic and Trade Commission, the Ministry of Construction, and the **Administration for Industry and Commerce, so as to obtain an audit certificate for the newly initiated project. Article 15: Ensuring that the starting conditions for newly launched projects are met is an important aspect of strengthening construction management. The implementation of the prerequisites for starting a chemical engineering construction project refers to **all the preparatory work required before the project actually begins, from the official approval of the project feasibility study report. Before the commencement of a project, inspections must be carried out in accordance with the **Planning Commission’s Regulations on the Conditions for Starting Large and Medium-Sized Capital Construction Projects** and the Ministry of Chemical Industry’s Implementing Measures for the Management of Starting Large and Medium-Sized Capital Construction Projects in the chemical industry; only after approval can the project proceed. Chapter 3 Mid-Project Construction Management Article 16 Mid-project construction work refers to the main tasks carried out from the approval of the project’s commencement until the completion of the trial operation assessment. An annual project plan is prepared by taking into account the overall schedule of the network plan, the delivery of design drawings, the delivery timeline of equipment and materials, as well as the availability of funds. The sources of funding for construction must comply with the requirements set out in the approval procedures for feasibility study reports; in particular, local funding must be provided in amounts as committed in the project’s feasibility study report, and delivered promptly to the relevant financial institutions. It is necessary to ensure that the capital is in place on time in accordance with relevant regulations. For projects included in the ** key construction projects, funding must be ensured on a priority basis. In project construction, the medium-term overall control plan can be adjusted according to actual conditions, but it is essential to ensure the achievement of the overall goals and strive to complete the project and put it into operation within the specified time frame. Article 17: After the annual fixed-capital investment plan is approved, an annual project plan shall be prepared immediately. This plan shall be submitted to the local competent authorities for review, and at the same time filed with the construction management department of the Ministry of Chemical Industry. If adjustments are necessary during implementation, an adjusted project plan can be prepared in the second half of the year and submitted to the aforementioned department, to serve as a basis for evaluating the construction unit’s performance in fulfilling its annual construction plans. Article 18: The project legal entity, or the general contractor and supervision unit for the project, shall establish a quality management department, set up a comprehensive quality management system, assign a sufficient number of personnel responsible for project quality control, and provide the necessary monitoring tools to ensure strict supervision and inspection of the project quality. The project quality must meet **and the standards, specifications issued by relevant departments, as well as the design requirements. Evaluations and inspections must be carried out strictly in accordance with **regulations** to ensure quality and strive to create **high-quality projects**. During the construction process, it is necessary to submit to the **departmental quality supervision for engineering projects**. For key projects, the Quality Supervision Station for Chemical Engineering Projects under the Ministry of Chemical Industry is responsible for quality oversight, while other large and medium-sized construction projects are supervised by the chemical quality supervision stations in various provinces, regions, and municipalities. The quality supervision of chemical engineering projects is carried out in accordance with the \"Interim Provisions on Quality Supervision for Chemical Engineering Projects\" and the \"Implementation Measures for Quality Supervision and Management of Chemical Engineering Projects\". Article 19: The inspection of imported equipment and materials is an important task that is crucial for supervising foreign parties in fulfilling their contractual obligations, ensuring the quality of such equipment and materials, protecting **’s interests, and enabling construction projects to be completed and put into operation on time. Regarding the inspection of imported equipment and materials, the project owner shall, in accordance with **relevant regulations, promptly submit matters to the local customs inspection authorities. The labor department shall submit applications and contact relevant organizations to participate. The project owner is the entity directly responsible for the inspection of imported equipment and materials in construction projects; it should appoint a person in charge to oversee these inspection tasks, strengthen leadership and management over the personnel involved in reception, inspection, transportation, and storage, and form a dedicated team composed of individuals with a strong sense of responsibility, expertise in the relevant field, and proficiency in foreign languages to handle tasks such as reception, loading/unloading, inspection, storage, and distribution in a unified manner. The project owner shall, in accordance with the requirements of the Ministry of Chemical Industry’s \"Administrative Measures for the Inspection of Imported Equipment and Materials in Chemical Construction Projects\" and the \"Inspection Outline for Imported Equipment and Materials in Chemical Construction Projects\", and taking into account the specific circumstances of the project, formulate specific work plans, rules and regulations, inspection plans, as well as practical measures, to ensure the proper receipt, storage, and inspection of such equipment and materials. The inspection of domestic equipment and materials, as well as the supervision of equipment manufacturing, are carried out in accordance with the inspection methods for imported equipment and materials. Article 20 During the implementation of a construction project, the project’s legal entity shall strengthen fund control and make every effort to save funds. While ensuring the functionality required for production, and within the approved total budget for the preliminary design, it is possible to adjust the allocation of funds between different projects according to the actual conditions of the project, provided that such adjustments remain within the approved design budget. If the originally approved total budget is exceeded, the procedure for adjusting the budget must be followed, with the original design unit responsible for preparing the adjusted budget in accordance with the \"Methods for Preparing Adjusted Budgets for Chemical Engineering Projects\". Strictly controlling the project budget is the responsibility of every builder. Once the preliminary design budget is approved, it generally remains unchanged, unless there is a significant increase in investment due to **policy changes**. The basic condition for adjusting the estimated cost is that, based on the budget prepared for the construction drawings, adjustments can be made once 80% of the equipment has been ordered, 60% of it has arrived, 60% of the installation work is completed, and more than 80% of the civil engineering work is finished. Any adjustments to the budget estimate must be submitted to the original authority that approved the preliminary design for approval. Article 21: Production preparation work is an important part of project construction. The main aspects of production preparation include making proper arrangements in five areas: personnel allocation and training for all staff, technology, safety, materials and external conditions, as well as management. Production preparation work runs through the entire process of project construction and is an extremely important foundational task in factory building. It must be initiated from the very beginning of the capital construction efforts, in order to lay a solid foundation for long-term, normal operations once production starts. The specific details and requirements shall be in accordance with the \"Specifications for Preparation Work of Large and Medium-Sized Chemical Industry Plants.\" Article 22: Commissioning work is a comprehensive evaluation of the design, equipment manufacturing, construction, and production preparation for a construction project. The main contents include the overall commissioning plan, pre-commissioning, commissioning with chemical feedstock, production evaluation, safety measures, approvals, and handover. Testing work must adhere to high standards and strict requirements to ensure that the quality of each project is excellent, with no hidden defects left ； The main project and the supporting projects are completed simultaneously, without any unfinished tasks ； The test run was carried out accurately, without any accidents. Single-unit testing should be carried out early, joint testing should be comprehensive, and the addition of chemical materials should be done steadily. It is necessary to adhere to the principle that not a single step of the required procedures may be omitted, not a single standard set forth must be lowered, and not a single moment of the available time may be delayed. It is necessary to strengthen leadership over the commissioning process; design, construction, and production units must work closely together to ensure the implementation of the optimal plan for chemical feeding trials, the successful completion of these trials on the first attempt, and the achievement of good economic benefits. The commissioning plan is prepared by the entity responsible for the project. For key construction projects, the commissioning plan must be submitted to the construction management department of the Ministry of Chemical Industry, which, together with the chemical industry departments (bureaus, companies) of the provinces, autonomous regions, and municipalities, will organize relevant experts to review the plan. The commissioning plans for large and medium-sized construction projects are submitted to the provincial, regional, or municipal chemical departments (bureaus, companies), which then organize experts to review them. Upon completion of the chemical feeding commissioning, the construction party and the design party jointly sign the certificate of completion for the chemical feeding commissioning in accordance with the specified form. The specific details and requirements shall be in accordance with the \"Specifications for Commissioning of Large and Medium-Sized Facilities in the Chemical Industry\". Article 23: After the chemical feeding commissioning is completed, the defects identified during the commissioning process should be addressed promptly, and full-load testing should be carried out step by step to create conditions for production evaluation. For construction projects, a three-month trial production period is generally arranged starting from the time when qualified products are produced during the chemical feeding commissioning phase; during this trial production, an appropriate time is chosen to evaluate the performance of the plant. Production assessment involves a comprehensive evaluation of whether the product quality, production capacity, process parameters, consumption levels, equipment performance, level of automation, and economic efficiency of the production facility, after undergoing chemical feeding trials, meet the design requirements. It also includes a thorough evaluation of the capabilities of the supporting utility systems and auxiliary equipment. The production assessment of the introduced equipment shall be carried out in accordance with the contract provisions. The production assessment generally requires continuous operation at full capacity for 72 hours. Upon completion of the assessment, the project owner and the design unit jointly sign a production assessment report, which is then submitted to the higher-level supervisory authority for record-keeping, serving as one of the bases for **final acceptance. Article 24: Regarding issues that arise during the intermediate construction phase, such as problems related to funding, design, construction, and production preparation that affect the progress of the project, these should be reported promptly to the chemical industry departments (bureaus, companies) in various provinces, regions, and cities, as well as to the relevant departments of the Ministry of Chemical Industry. The chemical industry departments (bureaus, companies) in these regions and cities, along with the relevant departments of the Ministry of Chemical Industry, should coordinate promptly or report to higher-level authorities in order to assist enterprises in resolving these issues. For **key construction projects, the Ministry of Chemical Industry and relevant local departments should, in accordance with the needs of on-site construction, promptly supervise, inspect, and provide guidance, as well as coordinate the resolution of issues that arise during construction to ensure its smooth progress. Chapter 4: Late Stage of Project Construction and Comprehensive Management Article 25: The late stage work of project construction refers to the main tasks carried out from the completion of production assessments until the project is accepted, as well as other comprehensive management tasks. The completion acceptance process is an important construction procedure for comprehensively summarizing and evaluating the results of construction, as well as assessing the quality of design and construction. It plays a crucial role in ensuring that construction projects are delivered for use in a timely manner, maximizing the return on investment, and improving the management standards in chemical industry construction. The project owner is responsible for carrying out the completion acceptance of the project. After the production assessment is completed, it should promptly submit information on the production capacity to ** in order to proceed with the project completion acceptance and the handover of fixed assets. After the project is completed. If issues such as process technical and equipment defects arise during the trial operation with chemical feedstock, resulting in the production facility failing to meet the required standards or output levels, the project owner shall organize the design and construction units to conduct an assessment, and develop a plan for rectification and improvement. This plan must be approved by the relevant authorities before it can be implemented in order to enable the facility to meet the standards and achieve the desired output levels as soon as possible. Once the conditions are met, the procedures for completion acceptance and the transfer of fixed assets will be carried out. Production facilities, having passed trial operation assessments and being capable of producing qualified products as well as achieving their designed production capacity, still need to undergo regular inspection and acceptance even in cases where they fail to reach full production capacity after going into operation due to reasons such as raw materials, fuel, market demand, and economic profitability, or even in cases where losses occur. Units that, without any special reason, fail to carry out project acceptance and fixed asset handover procedures within one year after commissioning shall not commence new capital construction or technical renovation projects. The organization of completion acceptance is as follows: for key projects, the acceptance is organized by the Planning Commission, or by the industry authorities entrusted by the Planning Commission, as well as the provincial, regional, and municipal authorities. Generally, large and medium-sized projects are inspected and accepted by the competent departments at the provincial, regional, and municipal levels, as well as by the construction management department of the Ministry of Chemical Industry. The completion acceptance work is carried out in accordance with the **Planning Commission’s ‘Measures for the Completion Acceptance of Construction Projects (Works)’ and the Ministry of Chemical Industry’s ‘Implementation Measures for the Completion Acceptance of Chemical Construction Projects’. Article 26: Thoroughly carry out post-evaluation of construction projects. Through post-project evaluation, the experiences and lessons learned from project implementation are carefully summarized to inform future decision-making. Specific requirements shall be implemented in accordance with the **Regulations of the Planning Commission. Article 27: Earnestly carry out statistics on fixed asset investment in construction projects. Information on the completion of investments in construction projects and the availability of funds should be compiled promptly and accurately to support **macro-management of investments. The monthly progress of national chemical industry infrastructure construction projects and large-scale technical renovation projects is compiled and reported by the construction management department of the Ministry of Chemical Industry; the chemical industry departments (bureaus, companies) in various provinces, regions, and municipalities, as well as the project owners, are required to submit summaries on time. The specific details and requirements shall be in accordance with the **Statistics Bureau’s ‘Explanations of Professional Statistical Indicators’ and the Ministry of Chemical Industry’s ‘Explanations of Statistical Indicators for Fixed Asset Investment in the Chemical Industry’. Article 28: To strengthen the engineering management of construction projects, so as to promptly report the progress of construction to the relevant departments, coordinate and resolve issues that arise during construction, and improve the level of office automation management, construction projects must carry out effective information management. All construction projects included in the **plan must be connected to the Ministry of Chemical Industry via computer networks, with the ministry’s construction management department providing software and technical support. The project owner shall submit a report on the project status via email at the beginning of each month. The specific details and requirements shall be in accordance with the \"Information Submission System for Large and Medium-sized Chemical Infrastructure Projects and Technological Upgrade Projects Above a Certain Scale (including Dual-Addition Projects)\». Article 29: The High-Quality Project Award of the Ministry of Chemical Industry is applied for by the project’s legal entity, while the construction management department of the Ministry of Chemical Industry is responsible for organizing the evaluation process. Projects competing for the Department’s Quality Project Award must pass the **project completion inspection** ； The rate of high-quality projects per unit of work is over 80% ； The design of the main unit should generally receive an excellent design award at the ministerial or provincial level. The project owner, as well as the main construction and survey-design firms of the award-winning project, receive certificates and medals for high-quality projects from the ministry. The Ministry of Chemical Industry recommends some outstanding projects to participate in the **High-Quality Project Awards. The specific details and procedures shall be in accordance with the \"Rules for the Selection of High-Quality Projects by the Ministry of Chemical Industry\". Chapter 5 Supplementary Provisions Article 30 These administrative procedures shall be interpreted by the Ministry of Chemical Industry. Article 31 These administrative procedures shall come into effect as of the date of issuance.