THE MINISTRY OF FINANCE THE MINISTRY OF FINANCE CIRCULAR No. 96/2000/TT-BTC OF SEPTEMBER 28, 2000 GUIDING THE MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE BELONGING TO THE STATE BUDGET�S CAPITAL SOURCE Pursuant to the State Budget Law promulgated on March 20, 1996 and the Government�s Decree No. 87/CP of December 19, 1996 detailing the division of responsibilities for managing, drafting, implementing and settling the State budget; Pursuant to the Government�s Decree No. 52/1999/ND-CP of July 8, 1999 issuing the Investment and Construction Management Regulation and Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Investment and Construction Management Regulation issued together with the Government�s Decree No. 52/1999/ND-CP of July 8, 1999; The Finance Ministry hereby guides the management and payment of investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source as follows: Part I GENERAL PROVISIONS 1. The State budget capital (including domestic capital of all State budget levels, the Government�s foreign loans and foreign aid capital provided to the Government, local administrations and State bodies) shall be paid only for investment projects of subjects entitled to use the State budget capital in accordance with the State Budget Law and the Investment and Construction Management Regulation. 2. Investment projects using the State budget capital must complete all investment and construction procedures, be incorporated in the State�s annual investment plans and meet all conditions for capital payment according to the Investment and Construction Management Regulation and the provisions of this Circular. 3. The finance agencies of different levels shall manage investment capital and public-service capital of investment and construction nature belonging to the State budget�s capital source as well as investment projects using other capital sources of the State. The State treasuries shall have the responsibility to closely inspect and control all stages of the payment process, ensure full and timely capital payment according to the prescribed regime for projects qualified for capital payment; if detecting that investors have used capital for wrong purposes or at variance with the prescribed regime, thus causing waste and loss to the State�s capital, they must take measures to prevent and handle such cases in time. 4. This Circular applies to projects with investment from the State budget�s capital source and the source of public-service capital of investment and construction nature under the management of the ministries, agencies attached to the Government, political organizations, socio-political organizations, social organizations, socio-professional organizations, State corporations (herein after collectively referred to as ministries), the provinces and centrally-run cities (hereinafter collectively referred to as provinces) as well as urban districts, rural districts, towns and provincial cities (hereinafter collectively referred to as districts). The management, control and payment of investment capital belonging to the commune budgets; the management, control and payment of State budget capital for planning projects and investment projects of overseas Vietnamese representative missions, security and defense projects of confidential requirements, and projects on copyright purchase shall be regulated by separate documents. Part II SPECIFIC PROVISIONS I. INVESTMENT PROJECTS USING STATE BUDGET CAPITAL AND PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE 1. Socio-economic infrastructure projects where capital is irrecoverable in the following fields: - Communications, irrigation, education and training, healthcare; - Planting of headwater forests, protection forests, national gardens, nature conservation parks; - Farms and stations for veterinary care, fauna and flora, research into new breeds and varieties and improvement of breeds and varieties; - Construction of cultural, social, physical training and sport, public welfare works; - State management, science and technology; - Protection of the environment and ecology in different regions and territories. 2. Defense and security projects where capital is irrecoverable. 3. Support for enterprises� investment projects in those fields where the State�s involvement is required by law. 4. Projects allocated with public-service capital in the State budget estimate to repair, renovate, expand and upgrade existing material bases, which have a value of VND 100 million or more, for the purpose of recovering or increasing the value of fixed assets (including also the building of new construction items for existing bases of administrative and public-service agencies and units). Public-service capital shall not be allocated to investment projects on new construction, except for cases decided by the Prime Minister. 5. Other investment projects decided by the Government. II. MAKING AND NOTIFICATION OF PLANS ON INVESTMENT CAPITAL, PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE 1. Annual plans: 1.1. During the time when the annual State budget estimates are drafted, basing themselves on the project implementation tempo and the examination figures already notified, investors shall make plans on investment capital of their projects and submit them to the superior managing bodies for incorporation into the State budget estimates according to the State Budget Law. Basing themselves on the agencies� and units� needs to repair, renovate, expand and upgrade their existing material bases, investors shall make plans on investment expenditure with the public-service capital source, incorporate them in the State budget estimates to be sent to the superior bodies according to the State Budget Law. 1.2. The ministries and the provincial People�s Committees shall synthesize and make investment capital plans and send them to the Finance Ministry and the Ministry of Planning and Investment. 1.3. On the basis of the socio-economic development plans and the economy�s major balances, the Finance Ministry shall coordinate with the Ministry of Planning and Investment in allocating the investment capital plan to each ministry, provincial People�s Committee and to important projects of the State. The provincial/municipal Finance and Pricing Services shall join the provincial/municipal Planning and Investment Services in advising the provincial People�s Committees on the development investment policies for each period and each plan year and on the apportion of investment capital to each project under the provincial management. The district Finance Sections shall join the district�s functional bodies in advising the district People�s Committees on the development investment policies for each period and each plan year, on the apportion of investment capital to each project under the district management. 1.4. After being assigned the budgets by the Government, the ministries and the provincial People�s Committees shall allocate investment capital to each project under their respective management, ensuring compatibility with the assigned quotas on total investment amount; structure of domestic capital and foreign capital; structure of economic branches; capital amounts of the State�s important projects as well as compliance with the Government�s direction on the management of annual socio-economic development plans and State budget estimates. 1.5. After allocating investment capital to each project, the ministries and provincial People�s Committees shall send the investment capital plans to the Ministry of Finance for examination of the following aspects: - Assurance of conditions by the projects incorporated in the investment capital plan prescribed at Point 1, Clause III, Part II of this Circular. - Compatibility with the Government-assigned quotas on total investment level, structure of domestic capital and foreign capital, structure of economic branches, capital levels of the State�s important projects. - Adherence to the principles on plan allocation; investment projects must have investment decisions issued by October of the year preceding the plan year; Groups B and C projects must be allocated with sufficient capital for implementation according to the Government�s stipulations. After examination, if the deployed plans fail to meet the above-mentioned requirements, the Finance Ministry shall make written requests for the readjustment thereof. Where the ministries or provincial People�s Committees fail to make readjustments or have made readjustments but their plans still fail to comply with regulations, the Finance Ministry shall send written reports thereon to the Prime Minister for decision while the finance agencies shall refrain from transferring capital to the State treasuries for payment. The provincial/municipal Finance-Pricing Services (or the district Finance Sections) shall review the list of projects incorporated in the local capital construction investment plans according to the above provisions. Particularly for projects invested with capital sources left at the localities under the National Assembly�s resolutions and the Government�s decisions, they must also comply with the provisions on investment objects and the use of each investment capital source. Where the deployed plans fail to comply with regulations, the provincial/municipal Finance and Pricing Services (or the district Finance Sections) shall have to send reports thereon to the provincial (or district) People�s Committees for consideration and readjustment while refraining from transferring money to the State treasuries for payment. 1.6. On the basis of the allocated or readjusted plans which have complied with regulations: - The ministries and the provincial or district People�s Committees shall assign the plan quotas to investors for implementation, and concurrently send them to the State treasuries of the same level for monitoring and use as basis for capital control and payment. - For projects managed by the ministries, the Finance Ministry shall notify the investment capital payment plans to the State treasuries for use as basis for payment of capital therefor. - For projects managed by the provinces, the provincial/municipal Finance and Pricing Services shall notify the investment capital payment plans to the provincial State treasuries for use as basis for payment of capital therefor. - For projects managed by the districts, the district Finance Sections shall notify the investment capital payment plans to the district State treasuries for use as basis for payment of capital therefor. 2. Quarterly plans: The contents of the quarterly plans on investment capital, public-service capital of investment and construction nature must reflect the value of the volume already performed in the preceding quarter and in the whole period from the beginning of the year till the end of the preceding quarter; the capital amounts already advanced and recovered and paid in the preceding quarter and in the whole period from the beginning of the year till the end of the preceding quarter; anticipate the value of the volume to be performed in the quarter; demands for capital advance and payment in the quarter. 2.1. Basing themselves on the assigned investment capital plans and the project implementation tempo, investors shall make quarterly investment capital plans with the above contents and send them to the State treasuries where investors have direct transactions with and concurrently to the ministries or provincial People�s Committees on the 10 th of the last month of the preceding quarter (particularly for the first quarter, investors shall send such plans within 5 days after receiving the annual investment capital plans assigned by the ministries or the provincial People�s Committees). 2.2. Basing themselves on the annual investment capital plans and the budget capability, the finance agencies shall have to arrange quarterly spending levels and notify the State treasuries thereof; basing themselves on the payment capital demands they shall transfer capital in time to the State treasuries for payment for projects. 2.3. For projects managed by the districts, investors shall make quarterly capital allocation plans and send them to the district Finance Sections. Basing themselves on the whole year�s capital plan and the budget capability, the district Finance Sections shall allocate the quarterly spending amount to each project, notify investors as well as the district State treasuries thereof; basing themselves on the payment capital demands, they shall transfer capital in time to the State treasuries for payment for projects. 2.4. For public-service capital of investment and construction nature, basing themselves on the annual State budget estimates notified to them, investors shall make quarterly spending plans and send them to the State treasuries they have direct transactions with for use as basis for control and payment. III. CONDITIONS FOR HAVING INVESTMENT CAPITAL, PUBLIC-SERVICE CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE PAID Investment projects shall receive State budget capital payment when they meet all the following conditions: 1. Having completed all investment and construction procedures, specifically in the following stages: 1.1. Investment preparations: - The competent authority�s document permitting the making of investment preparations. - The cost estimate for the investment preparation work, which has been approved by the competent authority. 1.2. Project execution preparation - The feasibility study report (or investment report) and the competent authority�s investment decision. - The cost estimate for the project execution preparation work, which has been approved by the competent authority. 1.3. Investment execution: - The feasibility study report (or investment report) and the competent authority�s investment decision. - The technical design and total cost estimate, the decision approving the technical design and total cost estimate. For Groups A and B projects, if their technical design and total cost estimate have not yet been approved, their investment decisions must prescribe the capital level of each construction item and there must be the designs and cost estimates of different construction items to be constructed in the year, which have been approved by the competent authorities. 2. Having been incorporated in the investment capital plans as prescribed at Point 1, Clause II, Part II of this Circular. 3. Decisions on the assignment of tasks to the investor, on the establishment of the project management board (for cases where project management boards must be established), on the appointment of the board�s chairman, chief accountant or a person in charge of accounting. 4. Having organized bidding or designated bidders for the selection of consultants, procurement of equipment and construction and installation according to the Bidding Regulation. 5. Having satisfied all conditions for payment of advance capital and payment for the completed volumes according to the provisions in Clauses IV and V, Part II of this Circular. 6. For the source of public-service capital of investment and construction nature: - There must be the feasibility study report (or investment report) and the investment decision. - There must be the document approving the bidding result (for bidding package for which bidding is organized) or the decision approving the design and cost estimate (for bidding packages with designated bidders). - There must be the contract for work assignment or the economic contract signed between the investor and the contractor. - Being arranged in the annual State budget estimate. 7. Investors shall open accounts at the State treasury in the place convenient for payment control and for their transactions. IV. ADVANCE CAPITAL AND RECOVERY OF ADVANCE CAPITAL 1. Objects eligible for advance capital - Investment projects for which bidding is organized under turn-key contracts. - Construction and installation biding packages for which bidding is organized. - Procurement of equipment (including imported and locally-procured equipment). - Consultancy contracts. - The ground clearance and compensation work. - Several jobs covered with other expenses of the project, such as expenses for the project management apparatus, land rentals or land use right transfer tax. Investment projects or the work volumes belonging to investment projects other than the above-mentioned objects shall receive advance capital only when it is so permitted by the Prime Minister. 2. Conditions for receiving advance capital: 2.1. For investment projects for which bidding is organized under turn-key contracts (bidding for the entire work of designing, equipment supply, construction and installation to be performed by one contractor) and the construction and installation bidding packages for which bidding is organized. - There must be the competent authority�s written approval of the bidding results. - There must be the economic contract signed between the investor and contractor. - There must be a contract performance security paper made by the contractor. 2.2. For the procurement of equipment (including imported and home-made equipment): - There must be the competent authority�s written approval of the bidding result (for equipment for which bidding is organized) or the document designating bidders (for equipment for which no bidding is organized). - There must be the economic contract signed between the investor and the contractor for the supply, processing or manufacture of equipment. Particularly for imported equipment, there must be the competent authority�s written approval of the contract therefor according to current regulations. - There must be a contract performance security paper made by the contractor (for equipment for which bidding is organized). 2.3. For jobs in need of hired consultants: - There must be the competent authority�s written approval of the bidding result (for jobs for which bidding is organized) or the document designating bidders (for jobs for which no bidding is organized). - There must be the economic contract signed between the investor and consultancy contractor. 2.4. For some jobs covered by other expenses of the project: - For the ground clearance and compensation work, there must be approved compensation plan and cost estimate. - For expense for land allocation, land tax or land use right transfer tax, there must be the specialized bodies� notices requesting the investor to make payment thereof. - For expense for the operation of the project management apparatus, there must be the approved cost estimate. 3. The level of advance capital 3.1. For investment projects for which bidding is organized under turn-key contracts: - Advance for the procurement of equipment shall be made on the basis of the payment tempo (pursuant to Item 3.3 below). - The remaining advance amount equal to 15% of the bidding package�s value shall be paid, which, however, must not exceed the whole year�s capital plan already apportioned to these jobs. 3.2. For construction and installation: - For bidding packages valued at under VND 10 billion, the advance level shall be equal to 20% of the contract value but must not exceed the whole year�s capital plan of the bidding package. - For bidding packages valued at between VND 10 billion and under 50 billion, the advance level shall be equal to 15% of the contract value but must not exceed the whole year�s capital plan of the bidding package. - For bidding packages valued at VND 50 billion or more, the advance level shall be equal to 10% of the contract value but must not exceed the whole year�s capital plan of the bidding package. In cases where the whole year�s capital plan of a biddin

Circular 96/2000/TT-BTC