CIRCULAR No CIRCULAR No. 44/2003/TT-BTC OF MAY 15, 2003 GUIDING THE MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND NON-BUSINESS CAPITAL OF INVESTMENT AND CONSTRUCTION NATURE BELONGING TO THE STATE BUDGET CAPITAL SOURCE Pursuant to State Budget Law No. 01/2002/QH11 of December 16, 2002; Pursuant to the Government’s Decree No. 52/1999/ND-CP of July 8, 1999 promulgating the Regulation on Investment and Construction Management, the Government’s Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Regulation on Investment and Construction Management, promulgated together with Decree No. 52/1999/ND-CP of July 8, 1999 and the Government’s Decree No. 07/2003/ND-CP of January 30, 2003 amending and supplementing a number of articles of the Regulation on Investment and Construction Management, promulgated together with Decree No. 52/1999/ND-CP of July 8, 1999 and the Government’s Decree No. 12/2000/ND-CP of May 5, 2000; The Ministry of Finance hereby guides the management and payment of investment capital and non-business capital of investment and construction nature belonging to the State budget capital source as follows: Part I GENERAL PROVISIONS 1. This Circular shall apply to investment projects funded with development investment capital or non-business capital of investment nature belonging to the State budget capital source, which are managed by the ministries, the ministerial-level agencies, the agencies attached to the Government, political organizations, socio-political organizations, social organizations, socio-professional organizations, State corporations (hereinafter referred collectively to as ministries), the provinces and centrally-run cities (hereinafter referred collectively to as provinces), and rural or urban districts, provincial capitals and provincial cities (hereinafter referred collectively to as districts). This Circular shall not apply to projects funded with commune budgets; investment projects of foreign-based Vietnamese representation missions; security and defense projects with confidentiality requirements; and copyright ownership purchase projects. 2. The State budget capital (including domestic capital of different State budget levels, foreign capital borrowed by the Government and foreign aid capital to the Government, the administrations at all levels, and State agencies) shall be paid only for investment projects eligible for using the State budget capital under the provisions of the State Budget Law and the Regulation on investment and construction management. 3. Investment projects funded with development investment capital or non-business capital included in the State budget estimates, investment projects using capital of different sources of which the State budget capital invested in different items or works can be separated, or investment projects using capital of different sources of which the State budget capital accounting for the biggest proportion in the projects’ total investment capital cannot be separated, must complete all investment and construction procedures, be incorporated in the annual investment plans or non-business expenditure plans of the State (hereinafter referred collectively to as annual plans) and satisfy all the conditions for capital payment under the Regulation on investment and construction management and the provisions of this Circular. 4. Non-business capital within the State budget estimates (hereinafter referred to as non-business capital of investment nature for short) shall only be allocated to projects for repair, renovation, expansion or upgrading of existing material foundations in order to restore, or increase the value of, fixed assets (including also the building of new construction items in the existing establishments of administrative or non-business agencies and units). Non-business capital shall not be allocated to new investment projects. 5. The finance agencies at all levels shall perform the financial management of investment capital and non-business capital of investment nature belonging to the State budget capital source. The State treasuries shall have to control and pay capital in a prompt, timely and lawful manner for the projects which satisfy all conditions for capital payment. Commercial banks which play the role of service banks for projects using the official development assistance (abbreviated to ODA) capital must comply with the Finance Ministry’s guidance on the financial management of ODA projects, depending on their assigned functions and tasks. Part II SPECIFIC PROVISIONS A. ELABORATION AND NOTIFICATION OF PLANS ON PAYMENT OF INVESTMENT CAPITAL OR NON-BUSINESS CAPITAL OF INVESTMENT NATURE I. Projects shall be incorporated in the State’s annual capital construction investment capital plans only if they satisfy all the following requirements: 1. For planning projects: They must have outlines or tasks as well as cost estimates for the planning work, which have been approved by competent authorities. 2. For investment preparation projects: They must be included in the approved branch and territorial development plannings, have investment preparation permits and their cost estimates for the investment preparation work must be approved by competent authorities. 3. For project implementation preparation projects: They must have investment decisions issued by October of the year preceding the plan year, and the cost estimates for the project implementation preparation work. 4. For investment execution projects: They must have investment decisions issued by October of the year preceding the plan year and their technical designs and total cost estimates must be approved by competent authorities. Particularly for Group-A or Group-B projects, if their technical designs and total cost estimates have not yet been approved, their investment decisions must determine the capital level of each construction item, and the designs and cost estimates of their construction items to be built in a year must be approved by competent authorities. For Group-C projects, there must be sufficient capital for their implementation within no more than two years. 5. For projects invested with non-business capital: if capitalized at VND one billion or more, they must complete the investment procedures stated at Points 2, 3 and 4 above; if capitalized at under VND one billion, their designs and cost estimates must be approved. II. Elaboration of investment capital plans, examination and notification of annual plans on payment of capital construction investment capital: 1. For projects using investment capital: During the time when the annual State budget estimate is drafted, basing themselves on the project implementation schedule and objectives, investors shall make investment capital plans of their projects and submit them to the superior managing agencies for incorporation into the State budget estimate according to the provisions of the State Budget Law. For projects using non-business capital of investment nature: Basing themselves on the agencies’ and units’ needs to repair, renovate, expand and/or upgrade their existing material foundations, investors shall make plans on investment expenditure with the non-business capital source, then send them to the superior agencies for incorporation in the State budget estimates according to the provisions of the State Budget Law. 2. The ministries shall synthesize and make investment capital plans, then send them to the Ministry of Finance and the Ministry of Planning and Investment. The provincial People’s Committees shall estimate the local budgets for investment capital plans, submit them to the Standing Boards of the provincial People’s Councils for consideration and comments before sending them to the Ministry of Finance and the Ministry of Planning and Investment. 3. After the State budget estimates are decided by the National Assembly and allocated by the Prime Minister: 3.1. The ministries (for centrally managed investment capital) shall allocate and decide to assign investment capital plans to projects under their respective management, which have completed all investment procedures, ensuring their compatibility with the assigned norms on total investment level; domestic and foreign capital structure; economic branch structure; capital levels of the State’s important projects and compliance with the National Assembly’s resolutions, the Government’s direction on the materialization of annual socio-economic development plans and State budget estimates. 3.2. The People’s Committees at all levels (for locally managed investment capital) shall make plans on the allocation of locally managed investment capital and submit them to the People’s Councils of the same level for decision. Under the resolutions of the People’s Councils, the People’s Committees shall allocate and assign investment capital plans to projects under their respective management, which have completed all investment procedures, ensuring their compatibility with the assigned norms on total investment level; domestic and foreign capital structure; economic branch structure; capital levels of the State’s important projects and compliance with the National Assembly’s resolutions, the Government’s direction on the materialization of annual socio-economic development plans and State budget estimates. The provincial-level Finance and Pricing Services shall have to join the provincial-level Planning and Investment Services in planning the allocation of investment capital to each project under the provincial management before reporting it to the provincial-level People’s Committees for decision. The district-level Finance Sections shall assume the prime responsibility and coordinate with the districts’ functional bodies in advising the district-level People’s Committees on allocating investment capital to each project under the district management. Particularly for projects to be invested with the capital sources permitted to be left for the localities under the resolutions of the National Assembly and decisions of the Government, they must also abide by the provisions on investment objects and use purposes of each source of investment capital. After allocating investment capital to each project, the provincial-level People’s Committees shall send the investment capital plans to the Ministry of Finance; the district-level People’s Committees shall send the investment capital plans to the provincial-level Finance and Pricing Services. 3.3. The allocation of capital in the annual plans to projects must comply with the following provisions: - Projects must satisfy all conditions for being eligible for incorporation in the investment capital plans as prescribed in Section I, Clause A, Part II of this Circular. - Compliance with the provisions at Points 3.1 and 3.2 above. 4. Examination and notification of annual plans on payment of capital construction investment capital: 4.1. For centrally managed projects: After allocating investment capital to each project, the ministries shall send the investment capital plans to the Ministry of Finance for examination under the provisions at Point 3.3 above. After the examination, if the allocation plans fail to meet the above-mentioned requirements, the Finance Ministry shall request in writing the ministries to make readjustments thereof. Where the ministries fail to make readjustments or have made readjustments but their plans still fail to comply with the provisions, the Ministry of Finance shall send reports thereon to the Prime Minister for consideration and decision. 4.2. For projects under the management of the provincial-level People’s Committees or district-level People’s Committees: If the allocation plans fail to comply with the provisions at Point 3.3 above, the provincial-level Finance and Pricing Services or district-level Finance Sections shall send reports thereon to the provincial-level or district-level People’s Committees for consideration and readjustment. 4.3. After the investment capital plans are apportioned or comply with the provisions after being adjusted, the ministries, the provincial-level or district-level People’s Committees shall assign plan quotas to investors for implementation and concurrently send them to the State treasuries where the projects’ accounts are opened for monitoring and use as basis for capital control and payment. 4.4. Notification of investment capital payment plans to each project: Investment capital payment plans are those on allocating capital to each project which is funded with the investment capital source of the State budget and satisfies all the conditions stated at Point 3.3 above. The notification of investment capital payment plans shall be effected as follows: - 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 to the projects, and concurrently to the ministries for monitoring and coordinated management. - For projects managed by the provinces or districts, the provincial-level Finance and Pricing Services or district-level Finance Sections shall notify the investment capital payment plans to the State treasuries for use as basis for payment of capital to the projects and concurrently to the managing branches for monitoring and coordinated management. Pending the notification of the investment capital payment plans by the provincial-level Finance and Pricing Services or district-level Finance Sections, the State treasuries shall base themselves on the provincial-level or district-level People’s Committees’ plan-assigning decisions to make temporary payment of capital for the projects. 5. Investors must send the basic documents of their projects to the finance agencies of different levels for examination and notification of the plans on payment of investment capital for such projects, including: - The written approval of the outline or tasks of the planning project; written permission for the investment preparation; - The cost estimate for the planning work, the investment preparation or project implementation preparation; - The competent authority’s project investment decision; the decision on approving the technical design and total cost estimate. III. Readjustment of annual investment capital payment plans: 1. Principles: - The ministries and localities shall review the implementation progress and investment objectives of the projects in the year so as to readjust the investment capital plans according to their competence or submit them to the Prime Minister for adjustment, transfer the capital of unimplementable projects to projects implemented ahead of schedule, with uncompleted volumes or projects likely to be implemented ahead of plan in the year. - Before sending the plans on readjusting the investment capital of each project to the finance agencies, the ministries and localities shall work with the State treasuries to identify the capital amounts under the annual plans already paid to the projects and the unused amounts due to non-implementation. 2. The finance agencies at all levels shall scrutinize and notify the readjusted investment capital payment plans to each project as prescribed at Point 4, Section II, Clause A, Part II of this Circular. 3. The time limit for readjusting annual investment capital payment plans shall be December 31 at the latest. B. PAYMENT OF INVESTMENT CAPITAL AND NON-BUSINESS CAPITAL OF INVESTMENT NATURE I. Opening of accounts: 1. For domestic capital: - The investors (project management units) may open accounts at the State treasuries in the places convenient for payment control and investors’ transactions. - The State treasuries shall guide investors how to open accounts. 2. For foreign capital: The investors (project management units) may open accounts at service banks under the guidance of the Ministry of Finance and the banks. II. Basic documents of projects: To serve the management and control of investment capital payment, the investors (project management units) must send to the State treasuries where they open accounts for payment the basic documents of their projects (which need to be sent only once till the projects finish investment, except where supplementation and/or revision are required), including: 1. For planning projects: - The competent authority’s written approval of the outlines or tasks of the planning projects; - The cost estimate for the planning work, already approved by the competent authority; - The decision approving the bidding result (for cases of bidding), the decision designating the contractor or assigning tasks; - The economic contract between the investor and the contractor. 2. For investment preparation projects: - The competent authority’s written permission to make the investment preparation; - The cost estimate for the investment preparation work, already approved by the competent authority; - The decision approving the bidding result (for cases of bidding), the decision designating the contractor or assigning tasks; - The economic contract between the investor and the contractor. 3. For project implementation preparation projects - The feasibility study report or investment report and the competent authority’s investment decision. In addition: For jobs not subject to bidding: - The cost estimate for the project implementation preparation work, already approved by the competent authority; - The contractor-designating decision (for bidding packages valued at VND 100 million or more); - The economic contract between the investor and the contractor. For jobs subject to bidding : - The decision approving the bidding result; - The economic contract between the investor and the bid-winning contractor (including documents enclosed with the economic contract: the approved tentative bidding dossier; the anticipation of the bid price, enclosed with the contractor’s detailed price list and conditions for price changes (if any), general and specific terms of the contract). 4. For investment execution projects: - The feasibility study report or investment report and the competent authority’s investment decision (if not available at the project implementation preparation stage); - The total cost estimate enclosed with the decision approving the technical design and the total cost estimate; In addition: For jobs not subject to bidding: - The detailed cost estimate approved for each job or construction item; - The contractor-designating decision (for bidding packages valued at VND 100 million or more); - The advance guarantees for ODA projects (at the donor’s request stated in the agreement); for projects invested with domestic capital but implemented by foreign contractors, advance guarantees shall be required (for cases involving advance payment); - The economic contract between the investor and the bid-winning contractor. Particularly for imported equipment, the competent authority’s written approval of the contract shall be required according to current regulations. For jobs subject to bidding: - The decision approving the bidding result; - The advance guarantees for ODA projects (at the donor’s request stated in the agreement); for projects invested with domestic capital but implemented by foreign contractors, advance guarantees shall be required; - The economic contract between the investor and the bid-winning contractor (including documents enclosed with the economic contract: the approved tentative bidding dossier; the anticipation of the bid price, enclosed with the contractor’s detailed price list and conditions for price changes (if any), general and specific terms of the contract). Particularly for imported equipment, the competent authority’s written approval of the contract is required according to current regulations. For projects implemented in the form of self-implementation, the basic documents shall include t

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