Administration of Railway Construction Measures

Article 3: These Measures shall apply to railway construction activities in the People's Republic of China.

Article 4: In railway construction, relevant state guiding principles and policies must be thoroughly implemented and state laws and regulations, the rules and regulations of the State Council department in charge of railways, mandatory construction standards and the construction Measures prescribed by the state must be strictly implemented.

Article 5: In railway construction, scientific and technological innovation shall be espoused, modern management methods shall be actively adopted, the use of advanced technologies, advanced equipment, advanced processes and new construction materials shall be promoted and the construction level shall be continuously improved.

Article 6: In railway construction, stress shall be placed on environmental protection, preservation of water and soil, the prevention and mitigation of disasters, conservation of energy and land and the due protection of cultural relics.

Article 7: In railway construction, the systems of invitation and submission of bids, project supervision, contract administration and supervision of quality shall be implemented.

Article 8: In railway construction, the administration of quality and safety must be strengthened, project quality ensured and the safety of the person and property of the public protected.

Article 9: Enterprises and the principal personnel engaged in such railway construction activities as project management, surveying, design, construction, supervision, consulting, etc. must have obtained the appropriate professional qualifications and individual practice qualifications in accordance with provisions, engage in their trades within the scope of their qualifications and subject themselves to the lawful supervision and inspection of the State Council department in charge of railways.

Article 10: The State Council department in charge of railways shall be in charge of the supervision and administration of railway construction nationwide.

PART TWO: CONSTRUCTION PROCEDURE

Article 11: Railway construction procedure includes deciding on approval of the project proposal, design, execution of the project and acceptance upon completion.

Article 12: Stage of deciding on approval of the project proposal: based on the railway construction plan, a preliminary feasibility study shall be carried out and a project proposal prepared for the proposed project; based on the approved medium to long-term railway plan or project proposal and on the basis of the preliminary survey, a feasibility study shall be carried out and a feasibility study report prepared. The project proposal and the feasibility study report shall be submitted for approval in accordance with state provisions.

For simple construction projects, the feasibility study may be carried out and the feasibility study report prepared directly.

Article 13: Design stage: the preliminary design work shall commence based on the approved feasibility study report and on the basis of the finalized survey. Design of the working drawings shall commence after examination and approval of the preliminary designs.

For simple construction projects, the design of the working drawings may be carried out directly based on the approved feasibility study report.

Article 14: Project execution stage: after the examination and approval of the preliminary design documents, arrangements shall be made for the invitation and submission of bids for the project and a work commencement report prepared. After the work commencement report is approved, construction shall be arranged based on the approved scale of construction, technical standards, construction schedule and investment and in accordance with the working drawings and the construction organization design documents.

Article 15: Acceptance upon completion stage: after the railway construction project is fully completed or after the completion of a stage or section thereof in accordance with the approved design documents, arrangements shall be made for acceptance upon completion and the Measures for the transfer of the assets shall be carried out in accordance with provisions.

PART THREE: PROJECT MANAGEMENT ORGANIZATION AND ITS RESPONSIBILITIES

Article 16: The construction management work unit for a railway construction project shall be the organization that arranges the execution of the construction project and such work unit shall be directly responsible for realizing the construction objectives. The construction management work unit shall be selected or established by the investors in the construction project. The investors in the construction project shall specify the responsibilities and authority of the construction management work unit in accordance with the principle of unified authority and responsibility and shall supervise its completion of the construction work.

Article 17: For railway construction projects directly invested in by the central government, the State Council department in charge of railways shall select the construction management work unit based on the peculiarities of the construction project.

For railway construction projects that implement a project legal person responsibility system, the construction management work unit shall be selected or established by the project legal person.

For other railway construction projects, the construction management work unit shall be selected or established in accordance with state provisions and with reference to these Measures.

Article 18: The construction management work unit must be a legally established enterprise, or a legally established institution with independent legal person status, that is engaged in railway construction and must satisfy the following conditions:

(1) it has a track record in managing similar construction projects and the projects that it has been responsible for constructing met project quality standards, investment therein was well controlled and they were found to be free of latent quality problems after transport inspection;

(2) it has a full range of technical and financial management personnel suited to the construction project; among them, the person in charge of the work unit, the person in charge of technology and the person in charge of finance must have a tertiary education, be familiar with the railway construction guiding principles, policies, laws and regulations of the state and the State Council department in charge of railways and have a relatively high level of policy knowledge;

the person in charge of the work unit must have relatively strong organizational skills, have experience in construction project management or have served as a member of the senior management personnel on the site of a similar construction project, and have established his competence as a member of the senior management personnel of a project through practice;

the main person in charge of technology must be familiar with railway construction rules and standards, have practical experience in construction project technology management or have served as the person in charge of technology for a similar construction project, and have established his competence through practice;

the main person in charge of finance must be familiar with railway construction finance provisions, have practical experience in construction project investment control and financial management or have served as the person in charge of finance for a similar construction project, and have established his competence through practice;

(3) it has technical, quality and financial management organizations suited to the management of construction projects that can ensure that the quality, safety, etc. of the construction project comply with state provisions, duly control project investment and carry out financial management and accounting in accordance with the law.

Article 19: The main responsibilities of the construction management work unit are set forth below:

(1) implementing the project construction guiding principles, policies, laws and regulations of the state and the State Council department in charge of railways, arranging for the construction of the railway project in accordance with the approved scale of construction, technical standards, construction schedule and investment and being accountable to the owner of the project for the entire process including project quality, safety, scheduling, investment, etc.;

(2) arranging for the invitation for bids for surveying and design and arranging for the carrying out of the surveying, design, project geological surveying, supervision and design consulting;

(3) arranging for the invitation for bids for construction, supervision and the procurement of materials and equipment, and executing contracts with the winning bidders;

(4) carrying out the Measures for project quality supervision;

(5) being responsible for the requisitioning of land and the demolition of premises and the relocation of the occupants thereof for the project and being responsible for examining and approving the reports on the commencement (resumption) of work on individual works of the construction project;

(6) arranging for the preparation of the project construction organization design;

(7) being responsible for examining the working drawings, supplying the design documents and organizing the giving of onsite instructions on the technical aspects of the project design;

(8) preparing and submitting proposed annual construction plans and construction fund budgets for the project;

(9) making arrangements for and coordinating the problems that arise during project construction and being responsible for the preparation of statistics and reporting the progress of the project;

(10) carrying out the Measures for design variations in accordance with provisions;

(11) arranging or participating in the investigation and handling of accidents involving project quality, personal injury or death, train operation safety, etc. in accordance with provisions;

(12) being responsible for the financial management of the project, using the construction funds in accordance with provisions and carrying out the account settlements relating to the project;

(13) being responsible for inspecting the work and calculating prices and allocating and settling payment of such funds as the project payments, etc. in a timely manner; and

(14) being responsible for the preliminary work for acceptance of the project upon completion, arranging for the preparation of the project completion documents and final accounts and arranging for the preparation of the project summary.

PART FOUR: ADMINISTRATION OF THE INVITATION AND SUBMISSION OF BIDS AND CONTRACTS

Article 20: A unified, open and orderly railway construction market must be established in accordance with the requirements of the socialist market economy.

Article 21: Invitations and submissions of bids shall be carried out for the surveying, design, construction and supervision of, and the procurement of important project materials, equipment, etc. for, railway construction projects in accordance with the law.

Article 22: Railway construction-related invitations and submissions of bids shall comply with the principles of openness, fairness, impartiality and good faith.

Article 23: Railway construction-related invitations and submissions of bids shall not be restricted by region or authority. No work unit or individual may illegally restrict or prevent a qualified enterprise or other organization from outside its or his own region or organization from submitting a bid or use any method to illegally interfere in the invitation or submission of bids.

No work unit or individual may break a railway construction project legally requiring an invitation for bids into several parts or use other grounds to avoid an invitation for bids.

Article 24: Railway construction-related invitations and submissions of bids shall be protected by state laws. Invitations and submissions of bids and the concerned parties shall be subject to the supervision of the State Council department in charge of railways and the authorities authorized by it.

Article 25: The construction management work unit may not require the winning bidder to divide the bid into sections; the surveying, design and construction enterprises may not assign the contract for or illegally subcontract the railway construction works for which they have contracted; and the supervision enterprise may not assign the railway construction project supervision that it has contracted for.

Article 26: After the winning bidder has been determined, the construction management work unit and the winning bidder must execute a written contract conforming to the contractual provisions specified in the bid invitation and submission documents within the prescribed period of time. Such contract shall specify the rights and obligations of the parties. The parties shall strictly perform the provisions of the contract. In the event of a breach, the party in breach must bear the corresponding financial and legal liability.

Article 27: A performance bond system shall be implemented and an insurance system shall be actively promoted in the contracting of railway construction surveying, design, construction and supervision.

Article 28: The contract record filing system shall be implemented for railway construction. The construction management work unit shall submit the contract to the State Council department in charge of railways or the work unit designated by it within 15 days after the execution of the same.

PART FIVE: ADMINISTRATION OF SURVEYING AND DESIGN

Article 29: Railway construction project surveying and design shall be compatible with the levels of social and economic development and the railway development objectives and shall conform with the principle of unified economic, social and environmental benefits.

Article 30: The technical policies and mandatory project construction standards promulgated by the state and the State Council department in charge of railways and the opinions of the relevant state authorities expressed in their official replies upon examination of the project proposal, the feasibility study report and the preliminary design shall be conscientiously and thoroughly implemented in railway construction project surveying and design.

Article 31: The systems of invitation and submission of bids, of project geological surveying supervision, of design consulting and of design document examination shall be implemented for railway construction project surveying and design in accordance with relevant provisions.

Article 32: The enterprises undertaking railway construction project surveying and design must strengthen technical management and quality management. Project geological surveying information must be true and accurate. For the design work, economic and social surveys must be conscientiously and duly conducted, systems engineering theory conscientiously and duly employed, transport capacity, transport quality, scale of construction and investment comprehensively considered, and advanced and appropriate technical standards recommended. The best design plan shall be recommended on the basis of a full evaluation of the plan and of economic and technical comparisons.

Article 33: Railway construction project design documents must achieve the specified level of detail, and the difference between the static investment budgeted in the initial design and the static investment stated in the approved feasibility study report in general, may not be greater than 10% of the static investment stated in the approved feasibility study report.

Article 34: The technical norms of the materials and equipment selected in the railway construction project designs, such as specifications, model numbers, performance, etc. shall be specified and the quality requirements of such materials and equipment must comply with the standards specified by the state.

The design work unit may not designate producers or suppliers except for those construction materials, specialized equipment and production lines for which there are special requirements.

Article 35: Prior to the commencement of construction on a railway construction project, the surveying and design enterprises must explain the design concept and design documents to the construction and supervision enterprises in accordance with the provisions of the surveying and design contracts and second an organization and personnel representing the designer to the site to resolve surveying and design problems in a timely manner that arise in the course of construction, improve and optimize the surveying and design and effect design variations in accordance with provisions.

Article 36: Top quality surveying and design services for railway construction projects shall be billed at top rates, in accordance with relevant provisions of the state and the State Council department in charge of railways.

PART SIX: ADMINISTRATION OF CONSTRUCTION

Article 37: Contractors that undertake the construction of railway construction projects must implement relevant state laws and regulations on quality, safety, environmental protection, etc. and subject themselves to the lawful supervision and inspection of the relevant authority.

Article 38: The construction contractor must perform the contract, establish an onsite management organization and have the appropriate engineering and technical personnel, construction capabilities and machinery and equipment in accordance with the provisions of the contract.

Article 39: The construction contractor must carefully verify the design documents and carry out construction in accordance with the working drawings and the construction organization design. The construction contractor must give timely written notice to the design, supervision and construction management work units of problems in the design documents and of surveying and design problems discovered in the course of construction.

Article 40: The construction contractor must establish a quality responsibility system, strengthen the management of quality and safety, establish a sound quality and safety warranty system, carry out construction in an enlightened manner and promote standardized site construction.

Article 41: The construction contractor must strictly implement the system in which persons are given training before assuming key positions or commencing key jobs in the construction of the project.

Article 42: The construction contractor must examine and inspect the construction materials, concrete, structural members, fittings, equipment, etc. in accordance with provisions and is strictly prohibited from using substandard materials, products or equipment.

Article 43: The construction contractor may not assign the contract for, or illegally subcontract, the project. Works that truly need to be subcontracted shall be specified in the bid documents and provided for in the executed contract. The construction contractor shall be liable for the quality and safety of the subcontracted works.

Article 44: During the construction, the construction contractor shall accurately complete the various inspection forms and prepare the completion documents in accordance with provisions.

PART SEVEN: ADMINISTRATION OF SUPERVISION

Article 45: For railway construction project supervision, a system of responsibility by the chief supervising engineer and a system whereby practising supervision personnel are required to be certified before assuming their positions shall be implemented.

Article 46: In project supervision, relevant railway construction rules and standards must be implemented, and supervision shall be effected in accordance with the design documents and the project quality inspection and evaluation standards.

Article 47: The supervision enterprise must establish an onsite supervision organization and deploy a chief supervising engineer, specialized supervising engineers and the necessary testing equipment, in accordance with its undertakings in the supervision contract and the bid.

Article 48: A system in which the chief supervising engineer, the supervising engineers and supervision personnel each have their respective responsibilities shall be established on the construction site. The deployment of supervision personnel on site must satisfy the supervision requirements. On-the-spot supervision must be implemented for key work Measures involving the structural safety of the project and for hidden works.

Article 49: Supervision personnel must conscientiously review and examine the design documents, carry out supervision in accordance with the design documents and the construction organization design and notify the design and construction management work units in writing in a timely manner of any surveying or design problem that they discover.

Article 50: Construction materials, structural members, fittings and equipment may only be used or installed after a supervising engineer has signed after inspecting the same. The work procedure following a key work procedure involving the structural safety of the project or following hidden works may only be carried out after the signature of a supervising engineer.

Article 51: Before the construction management work unit pays project monies, the work inspection and price calculation documents shall be signed in confirmation by the chief supervising engineer.

PART EIGHT: ADMINISTRATION OF QUALITY

Article 52: The Administration of the Quality of Construction Works Regulations shall be strictly observed in railway construction. The construction management work unit and the surveying, design, construction and supervision enterprises shall bear their respective liability for quality.

Article 53: The project quality supervision system shall be implemented for railway construction. The railway project quality supervision organization and its agencies shall supervise railway construction project safety in accordance with the law. Prior to the commencement of construction, the construction management work unit must carry out the quality supervision Measures in accordance with provisions.

Article 54: The relevant provisions of the state and the State Council department in charge of railways shall be implemented for the reporting, investigation and handling of railway construction project quality-related accidents. When a project quality-related accident occurs, the construction management work unit and the construction and supervision enterprises must make a report in a timely manner in accordance with provisions and arrange for or assist in the investigation and handling thereof. It is strictly forbidden to delay the reporting of, or to cover up and fail to report, an accident.

Information on the handling of project quality-related accidents shall form part of the completion information and be handed over to the work unit that assumes control of the project.

Article 55: The project quality warranty system shall be implemented for railway construction. The construction contractor shall perform its warranty obligations in respect of, and be liable for compensation for the losses arising as a result of, quality problems that occur within the scope and term of the warranty, in accordance with provisions.

PART NINE: ADMINISTRATION OF SAFETY

Article 56: The PRC Work Safety Law, other laws and regulations on work safety, state standards for the assurance of work safety and the relevant safety provisions formulated by the State Council department in charge of railways must be strictly implemented in railway construction.

Article 57: The construction management, surveying, design, construction and supervision enterprises in railway construction shall establish a sound labour safety education and training system and strengthen the education and training of staff and workers in work safety. Persons who have not received training in work safety may not assume their positions and work.

Article 58: A safety responsibility system and a system for the pursuit of accident liability shall be implemented for railway construction. The legal liability of persons responsible for accidents shall be pursued in accordance with the law.

Article 59: The safety facilities for a railway construction project shall be designed, constructed and completed simultaneously with the main structure of the project and may only enter formal operation after passing the acceptance check.

Article 60: The system for the reporting, investigation and handling of safety-related accidents shall be strictly implemented. A construction contractor, construction management work unit or supervision enterprise that is responsible for the occurrence of a safety-related accident must report the same in a timely manner in accordance with provisions and assist in the investigation and handling thereof. It is strictly forbidden to delay the reporting of, or to cover up and fail to report, such accidents.

Article 61: The construction management work unit and the surveying, design, construction and supervision enterprises that undertake the alteration of an existing line must strictly implement the rules and regulations for work on existing lines of the state and the State Council department in charge of railways, subject themselves to the guidance and supervision of the operating work unit and ensure transport and construction safety.

Transitional works for the renovation of existing lines may only be opened to traffic and operated after passing the acceptance check.

PART TEN: ADMINISTRATION OF CONSTRUCTION FUNDS

Article 62: A reasonable investment shall be determined for railway construction projects. The portion of the static investment approved in the initial design for a construction project that exceeds the static investment stated in the approved feasibility study report may not be greater than 10% of the static investment stated in the approved feasibility study report. If, in special circumstances, the 10% is to be exceeded, it must be reported to the work unit that approved the original feasibility study report for its approval.

Article 63: In railway construction, project investment must be strictly controlled so as to avoid loss and waste and improve investment returns. Except for policy or special reasons, the construction project budget approved in the initial design may not be increased.

Article 64: The relevant state financial management system must be strictly implemented, and fund management strengthened, in railway construction.

Article 65: For investments in railway construction from public finances, a construction fund budget must be prepared in accordance with provisions and the approved budget strictly implemented.

Article 66: In railway construction, relevant construction fund spending provisions must be strictly implemented. Project monies must be paid strictly in accordance with the contract and no such monies may be overpaid or become overdue. It is strictly forbidden to seize, retain or divert construction funds.

Article 67: The use and administration of railway construction funds shall be subject to audits, supervision and inspection in accordance with the law.

PART ELEVEN: ACCEPTANCE UPON COMPLETION

Article 68: Once a railway construction project has been completed in accordance with the approved design documents, it must undergo an acceptance check in accordance with state provisions. Possession of a project may not be delivered if it has not undergone an acceptance check or has failed the acceptance check.

Article 69: The acceptance of a railway construction project shall be arranged by an acceptance organization, which shall be established in accordance with state provisions. Acceptance shall include a preliminary examination, formal acceptance and the transfer of the fixed assets. Projects falling under the limit and small projects may be accepted in one step.

Article 70: Once the construction management work unit has confirmed that the construction project has satisfied the conditions for the preliminary examination, it shall submit an application for the preliminary examination. If the acceptance organization is of the opinion that the project has satisfied the criteria for the preliminary examination, it shall arrange for the preliminary examination of the project. The project may only be delivered for provisional management and operation after it has passed the preliminary examination.

Article 71: In principle, the formal acceptance shall be conducted one year after the preliminary examination. If the acceptance organization is of the opinion that the construction project has satisfied the criteria for formal acceptance, it shall arrange for the acceptance check. The project shall be delivered for formal operation after passing the acceptance check.

Article 72: After a construction project has been formally accepted, the procedure for the transfer of the fixed assets shall be carried out in accordance with provisions.

PART TWELVE: PENAL PROVISIONS

Article 73: If work unit or individuals that participate in railway construction activities violate laws or regulations in the course of railway construction, they shall bear the attendant administrative, economic and legal liability in accordance with the law.

The State Council department in charge of railways and the authorities authorized thereby shall impose administrative punishments for violations hereof.

Article 74: If the railway construction management work unit violates these Measures by committing any of the acts set forth below, it shall be ordered to rectify the matter; if the circumstances are serious, its qualification grade shall be reduced; the persons directly responsible shall be subjected to administrative punishment in accordance with the law; and if a criminal offence is constituted, criminal liability shall be pursued in accordance with the law:

(1) it fails to carry an invitation for bids for a construction project requiring the same, carries out the invitation for bids in violation of laws or regulations or it contracts the project out to a contractor without the appropriate qualifications;

(2) it fails to perform its responsibilities as a construction management work unit, resulting in a delay in the schedule, poor project quality or the occurrence of a major quality or safety related accident;

(3) it commences construction without carrying out the Measures for project quality supervision in accordance with provisions;

(4) it delivers possession of the construction project without the same having undergone an acceptance check or having failed the acceptance check;

(5) it increases the scale of the construction project or raises or lowers the construction standards without authorization;

(6) it seizes, retains or diverts construction funds;

(7) it fails to arrange for the construction in accordance with the schedule or unreasonably compresses the schedule, resulting in poor project quality or the occurrence of a major quality or safety related accident; or

(8) it commits another violation of laws or regulations.

Article 75: If the surveying or design enterprise undertaking surveying or design for a railway project violates these Measures by committing any of the acts set forth below, it shall be ordered to rectify the matter; if the circumstances are serious, its qualification for submitting bids shall be suspended and it shall be subjected to punishment by the qualification examination and approval authority ranging from the reduction of its railway work qualification grade to revocation of its qualifications; the persons directly responsible shall be subjected to administrative punishment in accordance with the law; and if a criminal offence is constituted, criminal liability shall be pursued in accordance with the law:

(1) it undertakes railway project surveying or design work exceeding the scope permitted by its qualification grade, it permits another work unit or individual to undertake railway surveying or design work in its name or it transfers the contract for or illegally subcontracts the railway surveying or design work it has undertaken;

(2) it prepares designs that do not comply with mandatory construction project standards or prepares project designs that are not in accordance with the data resulting from the survey;

(3) a fault in its design results in serious financial losses;

(4) it fails to comply with provisions in effecting design variations; or

(5) it commits another violation of laws or regulations.

Article 76: If the contractor undertaking the construction of a railway construction project violates these Measures by committing any of the acts set forth below, it shall be ordered to rectify the matter; if the circumstances are serious, its qualification for submitting bids shall be suspended and it shall be subjected to punishment by the qualification examination and approval authority ranging from the reduction of its railway work qualification grade to revocation of its qualifications; and if a criminal offence is constituted, criminal liability shall be pursued in accordance with the law:

(1) it submits a bid for a project in violation of laws or regulations or uses unlawful means to win the contract; it permits another work unit or individual to undertake railway project construction in its name or it transfers the contract for or illegally subcontracts the project;

(2) it carries out construction in violation of the design documents or the construction technical standards; during construction it cheats on labour and materials or uses substandard construction materials, structural members, fittings or equipment; or its onsite management is disordered, resulting in poor project quality or latent safety problems;

(3) it fails to perform its contractual or bid undertakings or fails to perform its warranty obligations;

(4) it refuses to subject itself to the supervision of the project quality supervision organization or refuses inspection by the supervision work unit;

(5) it covers up, falsifies a report on or delays reporting a major project quality or safety-related accident;

(6) it discovers mistakes in the design documents but fails to report the same, resulting in poor project quality or latent safety problems; or

(7) it commits another violation of laws or regulations.

Article 77: If the project supervision enterprise undertaking railway project supervision violates these Measures by committing any of the acts set forth below, it shall be ordered to rectify the matter; if the circumstances are serious, its qualification for submitting bids shall be suspended and it shall be subjected to punishment by the qualification examination and approval authority ranging from the reduction of its railway work qualification grade to revocation of its qualifications; and if a criminal offence is constituted, criminal liability shall be pursued in accordance with the law:

(1) it submits a bid for project supervision in violation of laws or regulations, uses unlawful means to win the contract, or transfers the supervision work;

(2) it colludes with the construction management, design or construction enterprise or practises fraud;

(3) it fails to conscientiously perform its undertakings in the supervision contract or its bid or a quality-related accident occurs due to negligence or dereliction of duty on the part of supervision personnel;

(4) supervision personnel accept bribes or gifts or solicit money or goods;

(5) it discovers errors in the design documents but fails to report the same, or it receives a report on errors in the design documents from the construction work unit but fails to report the same to the construction management work unit in a timely manner, resulting in poor project quality or latent safety problems; or

(6) it commits another violation of laws or regulations.

Article 78: If a member of the working personnel of the railway construction administration authority practises favouritism, commits irregularities, abuses his authority or is derelict in his duties, he shall be subjected to disciplinary sanctions or administrative punishment in accordance with the law; if a criminal offence is constituted, his criminal liability shall be pursued in accordance with the law.

PART THIRTEEN: SUPPLEMENTARY PROVISIONS

Article 79: For railway construction projects that use foreign funds (including foreign loans), if the state has other provisions, such state provisions shall be implemented.

Article 80: In the event of a conflict between these Measures and previously issued provisions and Measures for the administration of railway construction, these Measures shall prevail.

Article 81: The State Council department in charge of railways shall be in charge of interpreting these Measures.

Article 82: These Measures shall be implemented as of October 1 2003. The Administration of Railway-related Capital Construction Tentative Measures (Tie Jian [1990] No.191) issued by the Ministry of Railways are repealed as of the same date.