Circular No. 88/2018/TT-BTC dated September 28, 2018 of the Ministry of Finance on prescribing the financial management of investment projects in the form of public-private partnership and expenses for investor selection

THE MINISTRY OF FINANCE

Circular No. 88/2018/TT-BTC dated September 28, 2018 of the Ministry of Finance on prescribing the financial management of investment projects in the form of public-private partnership and expenses for investor selection^[1]

Pursuant to the November 26, 2013 Bidding Law;

Pursuant to the June 18, 2014 Law on Public Investment;

Pursuant to the June 18, 2014 Construction Law;

Pursuant to the November 26, 2014 Law on Investment;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the June 21, 2017 Law on Management and Use of Public Assets;

Pursuant to the Government’s Decree No. 16/2015/ND-CP of February 14, 2015, prescribing the autonomy mechanism applicable to public non-business units;

Pursuant to the Government’s Decree No. 30/2015/ND-CP of March 17, 2015, detailing a number of articles of the Law on Bidding concerning investor selection;

Pursuant to the Government’s Decree No. 32/2015/ND-CP of March 25, 2015, on management of construction investment costs;

Pursuant to the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on management of construction investment projects;

Pursuant to the Government’s Decree No. 77/2015/ND-CP of September 10, 2015, on medium-term and annual public investment plans;

Pursuant to the Government’s Decree No. 141/2016/ND-CP of October 10, 2016, prescribing the autonomy mechanism applicable to public non-business units engaged in economic non-business and other non-business activities;

Pursuant to the Government’s Decree No. 163/2016/ND-CP of December 21, 2016, detailing and guiding the implementation of the Law on the State Budget;

Pursuant to the Government’s Decree No. 42/2017/ND-CP of April 5, 2017, amending and supplementing a number of articles of the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on management of construction investment projects; 

Pursuant to the Government’s Decree No. 151/2017/ND-CP of December 26, 2017, detailing the implementation of the Law on Management and Use of Public Assets;

Pursuant to the Government’s Decree No. 63/2018/ND-CP of May 4, 2018, on investment in the form of public-private partnership;

Pursuant to the Government’s Decree No. 120/2018/ND-CP of September 13, 2018, amending and supplementing a number of articles of the Government’s Decree No. 77/2015/ND-CP of September 10, 2015, on medium-term and annual public investment plans, Decree No. 136/2015/ND-CP of December 31, 2015, guiding the implementation of a number of articles of the Law on Public Investment, and Decree No. 161/2016/ND-CP of December 2, 2016, prescribing a special mechanism for construction investment management of a number of projects under national target programs in the 2016-2020 period;

Pursuant to the Government’s Decree No. 87/2017/ND-CP of July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Investment Department;

The Minister of Finance promulgates the Circular prescribing the financial management of investment projects in the form of public-private partnership and expenses for investor selection.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes:

1. Financial management of investment projects in the form of public-private partnership (below referred to as PPP projects), covering:

a/ Management and use of investment preparation expenses and PPP project implementation expenses of ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees (below referred to as ministries, sectors and provincial-level People’s Committees) under the Government’s Decree No. 63/2018/ND-CP of May 4, 2015, on investment in the form of public-private partnership (below referred to as Decree No. 63/2018/ND-CP);

b/ A mechanism for management and use of support funds for investment preparation specified in Article 6 of Decree No. 63/2018/ND-CP;

c/ Financial plans of PPP projects;

d/ Making of plans for the funds to be paid to investors as regular expenditures and revenues from the provision of public services;

dd/ Payment of the State-contributed fund in PPP projects;

e/ Valuation of public assets used in PPP projects;

g/ Valuation of the public investment fund invested in a public investment project which is converted into investment in the form of PPP contract;

h/ Finalization of value of completed PPP projects;

2. Expenses for investor selection prescribed in Article 7 of the Government’s Decree No. 30/2015/ND-CP of March 17, 2015, detailing a number of articles of the Bidding Law regarding investor selection (below referred to as Decree No. 30/2015/ND-CP).

Article 2. Subjects of application

1. Ministries, sectors, provincial-level People’s Committees, investors, project enterprises, agencies, units, organizations and individuals involved in the investment preparation, PPP project implementation, finalization of completed PPP projects, or operation of PPP projects.

2. Organizations, units and individuals involved in or related to investor selection prescribed in Article 7 of Decree No. 30/2015/ND-CP.

3. Financial plans of PPP projects using official development assistance or concessional loans of foreign donors must comply with this Circular. In case a donor sets out regulations different from the provisions of this Circular, a financial plan may comply with such regulations or this Circular if the donor so agrees.

Article 3. Agencies responsible for paying the State-contributed fund in PPP projects and opening accounts

1. State treasury offices are tasked to control the payment of funds for investment preparation and the State-contributed fund in PPP projects of ministries, sectors and provincial-level People’s Committees specified in Articles 5 and 11 of Decree No. 63/2018/ND-CP.

2. Agencies and units assigned to manage funds for investment preparation and the State-contributed fund in PPP projects of ministries, sectors and provincial-level People’s Committees may open accounts at state treasury offices convenient for their transactions in conformity with the control of fund payment by state treasury offices.

3. The State Treasury shall guide the procedures for account opening in accordance with current regulations.

Chapter II

MANAGEMENT AND USE OF EXPENSES FOR INVESTMENT PREPERATION AND PPP PROJECT IMPLEMENTATION OF MINISTRIES, SECTORS AND PROVINCIAL-LEVEL PEOPLE’S COMMITTEES

Article 4. Sources for payment and specific expenses for investment preparation and project implementation of ministries, sectors and provincial-level People’s Committees specified in Article 5 of Decree No. 63/2018/ND-CP

1. State budget funds included in development investment and regular expenditure plans of ministries, sectors and provincial-level People’s Committees for payment of expenses for investment preparation prescribed at Points c, d, dd, e, g and h, Clause 1, Article 5 of Decree No. 63/2018/ND-CP.

2. State budget funds included in development investment expenditure plans of ministries, sectors and provincial-level People’s Committees; support funds for investment preparation specified in Article 6 of Decree No. 63/2018/ND-CP; proceeds from the sale of bidding dossiers for investor selection; amounts refunded by investors selected to implement PPP projects; and other lawful sources to cover the expenses specified at Points a and b, Clause 1, Article 5 of Decree No. 63/2018/ND-CP.

3. The sources set aside from the total construction investment amount under the Ministry of Construction’s regulations (the Ministry of Construction’s Decision No. 1191/QD-BXD of November 17, 2017, announcing norms of expenses for operation of project management units under state agencies competent to implement PPP projects) may be additionally used to cover expenses for operation of project management units under state agencies competent to implement PPP projects.

4. For specific expenses specified at Points c, d, e, g and h, Clause 1, Article 5 of Decree No. 63/2018/ND-CP:

a/ Direct expenses for PPP projects shall be allocated from development investment funds of ministries, sectors and provincial-level People’s Committees and/or set aside from total investment amounts of PPP projects under the Ministry of Construction’s regulations;

b/ Expenses for operation of coordinating units in charge of PPP activities to serve general activities (not associated with a separate PPP project) shall be allocated as regular expenditures of ministries, sectors and provincial-level People’s Committees.

Article 5. Making, approval and observance of expense estimates

1. Bases for estimation

a/ Ministries’ or sectors’ documents assigning their attached organizations or units; provincial-level People’s Committees’ documents assigning their specialized or attached agencies or district-level People’s Committees to perform the tasks specified in Clause 3, Article 8 of Decree No. 63/2018/ND-CP (if any);

b/ List of projects approved by competent authorities regarding investment policy in the PPP form specified in Decree No. 63/2018/ND-CP;

c/ Plan on implementation of PPP projects approved by competent authorities (if any);

d/ Plans on prequalification for investor selection approved by competent authorities (if any); investor selection plans approved by competent authorities (if any);

dd/ Policies, regimes, criteria and norms under relevant current regulations;

e/ Expenses for investment preparation refunded by investors with successful bids (if any); proceeds from the sale of bidding dossiers and other lawful sources (if any).

2. Principles of estimation

a/ Expenses allocated as regular expenditures of ministries, sectors and provincial-level People’s Committees must comply with the current regulations on estimation of regular expenditures from the state budget;

b/ Expenses allocated as development investment expenditures of ministries, sectors and provincial-level People’s Committees must comply with the current regulations on estimation of development investment expenditures from the state budget;

c/ Investors with successful bids shall refund paid the investment preparation expenses of PPP projects to the ministries, sectors and provincial-level People’s Committees. In case competent state agencies do not request investors to refund the paid investment preparation expenses, such expenses shall not be included in financial plans for recovery of investment funds and profits of the investors;

d/ The remainder of investment preparation expenses refunded by selected investors and proceeds from the sale of bidding dossiers (after paying expenses for the organization of bidding under regulations) shall be remitted into the state budget in accordance with the law on the state budget.

3. Making, approval and observance of expense estimates

a/ Ministries, sectors, provincial-level People’s Committees and units tasked to prepare investment and supervise the performance of project contracts and quality of works shall, pursuant to the Law on the State Budget, Law on Public Investment, and Clauses 1 and 2 of this Article, make expense estimates by every expense and according to funding sources specified in Article 4 of this Circular and include such estimates in annual budget estimates of their agencies and units by every funding source, then submit them to competent authorities for approval under current regulations;

b/ After having their annual budget estimates approved by competent authorities, ministries, sectors and provincial-level People’s Committees shall allocate such estimates to related units for compliance under regulations;

c/ If an additional PPP project is approved in a year, the related competent state agency shall make additional expense estimates and submit them to a competent authority for approval under current regulations;

d/ Competent state agencies shall properly and strictly manage and use the allocated expense estimates.

Article 6.Support funds for investment preparation specified in Article 6 of Decree No. 63/2018/ND-CP

1. Ministries, sectors and provincial-level People’s Committees shall take the initiative in mobilizing lawful funding sources to support the investment preparation of PPP projects in accordance with the laws on the state budget and public debt management and other relevant regulations.

2. Expenses for investment preparation of PPP projects paid by ministries, sectors or provincial-level People’s Committees shall be stated in bidding dossiers as a basis for refund by investors under Clause 2, Article 6 of Decree No. 63/2018/ND-CP.

3. Within 15 days after a project contract is signed between a competent state agency and the investor with successful bid (or between the investor with successful bid and a project enterprise), the investor with successful bid shall refund the paid expenses for PPP project investment preparation to the ministry, sector or provincial-level People’s Committees under the bidding dossier.

4. Ministries, sectors and provincial-level People’s Committees shall prioritize the allocation of refunded expenses for investment preparation included in annual state budget estimates to create sources for investment preparation for other potential PPP projects. The management and use of support funds for investment preparation must comply with the laws on the state budget and public debt management and relevant regulations.

5. For mobilized funding sources other than state budget funds or a funding provider sets out regulations on the management and use of support funding sources for investment preparation different from the provisions of the law on the state budget, ministries, sectors and provincial-level People’s Committees shall take responsibility for the mobilization, management and use of the funding sources in accordance with the provisions on such funding sources and relevant regulations. In case of necessity to promulgate separate regulations, ministries, sectors and provincial-level People’s Committees shall propose and coordinate with the Ministry of Finance in promulgating them.

Article 7. Management of expenses for investor selection

1. Expenses in the course of investor selection include:

a/ Expense for making dossiers of invitation for prequalification, bidding dossiers and dossiers of requirements;

b/ Expense for appraising dossiers of invitation for prequalification, bidding dossiers and dossiers of requirements;

c/ Expense for evaluating dossiers of prequalification participation, bid dossiers and dossiers of proposals;

d/ Expense for appraising prequalification results and investor selection results;

e/ Payment for the Advisory Council to settle investors’ complaints about investor selection results.

2.Norms of investor selection expenses must comply with Article 7 of Decree No. 30/2015/ND-CP.

3. Management and use of expenses for investor selection

a/ The management and use of expenses for investor selection must comply with the Ministry of Finance’s regulations on management and use of expenses in the course of selection of contractors for projects using state budget funds or government bonds (Circular No. 190/2015/TT-BTC of November 17, 2015).

b/ Expenses for appraisal of dossiers of invitation to prequalification, evaluation of dossiers for participation in prequalification, appraisal of prequalification results; appraisal of bidding dossiers or dossiers of requirements; evaluation of bid dossiers or dossiers of proposals; appraisal of investor selection results, and payment for the Advisory Council to settle investors’ complaints about investor selection results in the course of selection of investors, including cases in which the appraisal is carried out by specialized agencies of ministries, sectors or provincial-level People’s Committees or hired consultants shall be included in such specialized agencies’ cost estimates.

Chapter III

VALUATION OF PUBLIC ASSETS USED IN PPP PROJECTS

Article 8.Value of the public investment fund invested in a public investment project which is converted into a PPP project

1. For public investment projects approved by competent authorities for conversion into PPP projects specified in Article 26 of Decree No. 63/2018/ND-CP, the financial finalization of the invested public investment fund shall be made under the Finance Ministry’s regulations on financial finalization of completed projects funded by the state budget (Circular No. 09/2016/TT-BTC of January 18, 2016, and Circular No. 64/2018/TT-BTC of July 30, 2018) and this Circular.

2. The valuation of the public investment fund as the State-contributed fund in PPP projects specified in Article 26 of Decree No. 63/2018/ND-CP must comply with the current regulations on the valuation of public assets.

Article 9.Valuation of public assets used in PPP projects

1. The competence, order and procedures for deciding on the use of public assets in PPP projects must comply with the law on management and use of public assets.

2. The valuation of public assets to pay to investors performing build-transfer (BT) contracts must comply with the Government’s regulations on the use of public assets to pay to investors implementing construction investment projects in the form of BT contracts.

3. The valuation of public assets used in PPP projects not falling in the case prescribed in Clause 2 of this Article is provided as follows:

a/ Public assets used in a PPP project is valued according to the value of public assets recorded in account books at the time of deciding on the use of public assets in the PPP project by a competent agency or person.

b/ In case the public asset has not been recorded in account books, the agency, organization or unit assigned to manage and use such public asset shall revalue the public asset at the time of deciding on the use of public asset in the PPP project by a competent agency or person in accordance with the law on management and use of public assets.

c/ The valuation of the land use rights in the historical cost price of assets must comply with Chapter XI of the Government’s Decree No. 151/2017/ND-CP of December 26, 2017, detailing a number of articles of the Law on Management and Use of Public Assets.

Chapter IV

FINANCIAL PLANS OF PPP PROJECTS

Article 10. Principles of making a PPP project’s financial plan

1. All lawful expenses and revenues in the stages of investment preparation, implementation and operation of a PPP project shall be denominated in Vietnam dong and shown in the project’s financial plan.

2. Financial criteria of a PPP project specified in Clause 8, Article 11 of this Circular shall be calculated based on cash flows discounted at the weighted average rate of funding sources to be mobilized.

3. For PPP projects in the form of build-transfer-lease (BTL) contracts or build-lease-transfer contracts (BLT) contracts the use of regular expenditures to maintain the provision of public services and revenues from the provision of public services for paying to investors must ensure the following principles:

a/ The use of regular expenditures to pay to investors must be compatible with the state budget’s capability to allocate annual expenditure estimates to ministries, sectors, localities and units implementing PPP projects. This source may not be used for payment of investment costs in the stage of implementation of PPP projects;

b/ The use of revenues from the provision of public services to pay to investors must be feasible and conformable with the roadmap for adjusting prices and public service charges. Particularly, public non-business units that can self-finance their regular and investment expenditures may use their non-business operation development funds (if any) to pay investment expenses in the stage of implementation of investment in PPP projects.

Article 11. Contents of a financial plan

1. Total investment amount.

2. Structure of investment sources:

a/ The state-contributed fund (including public investment funds or public assets as prescribed by the law on public investment) used to support the construction of works in order to ensure the feasibility of projects; support the construction of auxiliary works,  compensation, ground clearance and resettlement under Clause 1, Article 11 of Decree No. 63/2018/ND-CP;

b/ Equity;

c/ Funds mobilized by investors.

3. Fund mobilization plan:

a/ The state-contributed fund as support (if any) and support funds for the construction of auxiliary works, compensation, ground clearance and resettlement (if any) under Clause 1, Article 11 of Decree No. 63/2018/ND-CP:

- Total amount;

- Public investment funds and public assets (if any) under the law on management and use of public assets;

- Contents of support;

 - Disbursement schedule for public investment funds or the time of capital contribution with public assets.

b/ Equity:

- Total amount;

- Disbursement schedule.

c/ Mobilized funds (commercial loans, concessional credit, foreign loans, and other funding sources):

- Total raised funds (by type of funding source);

- Time of loan borrowing and repayment and grace period (by type of loan);

- Expenses for the fund mobilization: interest rate for each type of loan and average interest rate and necessary expenses for the fund mobilization as prescribed by law (guarantee fee, commitment fee, credit insurance and brokerage);

- Currency of loans and payment exchange rate;

- Conditions for fund mobilization;

- Disbursement schedule (by type of fund);

- Plan on repayment of mobilized funds (by type of fund).

4. Proposals on incentives (if any) to ensure the implementation of the project’s financial plan.

5. The investor’s return on equity.

6. Estimated expenses for the project in the stage of operation.

7. Plan on recovery of investment capital and investor’s profits:

a/ Estimated lawful revenues;

b/ Estimated prices and service charges;

c/ Estimated turnover from every lawful revenue;

d/ Implementation duration, operation, capital recovery and profit of the PPP project;

dd/ For PPP projects in the form of BTL or BLT contracts, a plan on the State’s payment to the investor by year and type of fund source is required:

- Public investment fund;

- Regular expenditures to maintain the provision of public services;

- Revenues from the provision of public services (including the assessment of the implementation in two preceding years by the time of making prefeasibility study reports and feasibility study reports).

e/ For PPP projects in the form of BT contracts, it is required to estimate land areas, working offices, infrastructure assets as payment to investors, or the right to commercially operate facilities or provide services franchised to BT investors under the Government’s regulations on the use of public assets to pay to investors in projects in the form of BT contracts.

8. Criteria for assessing feasibility of a financial plan:

a/ The competent authority shall decide to select an investment project based on the following criteria:

- Net present value (NPV);

- Internal rate of return (IRR);

- Benefit-cost (B/C) ratio;

- Return on equity (ROE) rate;

- Project contract term;

- Sensitivity of the (above-mentioned) financial criteria as a result of a change in the total investment amount, operation expenses, turnover or project contract term.

b/ Based on specific characteristics of a project, the related state management agency may set additional financial criteria such as debt to equity ratio, debt service coverage ratio, rapid conversion rate for property, solvency ratio, and capital preservation measures under current regulations in order to select an efficient investment project.

Article 12. Equity

1. Equity of investors:

a/ The equity of an investor implementing a project is equity of the investor that has been actually contributed by one or more than one investor according to the charter of the project enterprise (excluding amounts on lent by the project owner);

b/ The investor shall ensure the ratio of equity of the project enterprise to the total investment amount under Article 10 of Decree No. 63/2018/ND-CP which shall be stated in the project contract.

2. Bases for determination of an investor’s equity:

a/ An investor’s equity shall be determined based on its/his/her latest annual financial statement audited by an independent audit firm and report on the use of equity at the time of participating in the PPP project implementation.

For an institutional investor established in the year, its equity shall be determined based on its financial statement audited by an independent audit firm for the period from the time of its establishment to the time of its participation in the project; at the same time, the owner’s representative, owner or parent company shall make a written commitment and financial statement to prove sufficient equity under the project’s financial plan;

b/ If the investor concurrently participates in different projects and makes other long-term investments, it/he/she shall make a list of such projects and long-term investments and ensure that the total equity is enough to contribute all amounts of equity it/he/she commits to all these projects and make long-term investments under regulations;

c/ The investor shall send to a competent state agency a plan to ensure the equity as committed, including a schedule for increasing the charter capital of the project enterprise in conformity with the PPP project implementation schedule prescribed in Clause 4, Article 38 of Decree No. 63/2018/ND-CP.

The investor shall take responsibility before law for the accuracy and lawfulness of provided data and documents related to the equity, list of ongoing projects, and allocation of the equity to ongoing projects and other long-term investments by the time of project contract negotiation;

d/ State agencies competent to sign and perform project contracts shall assess the financial capacity of investors and supervise the implementation of their commitments to the mobilization of equity.

Article 13. Mobilized funds

1. The fund amount mobilized by the time of project contract negotiation shall be determined based on a written commitment or agreement between the fund provider and investor. The total fund amount committed by the provider must be at least equal to the fund amount which the investor has to mobilize.

2. The mobilized fund amount must conform to the project implementation schedule stated in the project contract.

3. The investor or project enterprise shall report to a competent state agency on the fund mobilization progress as stated in the project contract.

Article 14. Loan interests for mobilizing investment capital

1. Loan interests for mobilizing investment capital:

a/ Loan interests for mobilizing investment capital is included in the project’s financial plan based on the committed loan amount and loan mobilization progress stated in the project contract; the interest on loans borrowed during the construction is included in the PPP project’s total investment amount;

b/ Loan interests for mobilizing investment capital shall only be calculated on the capital amount which the investor has to borrow but not on the investor’s equity committed in the project contract;

c/ Loan interests shall be calculated from the time of disbursement of the first loan to the time of expiration of the project implementation duration stated in the project contract.

2. Agencies competent to approve prefeasibility study reports or feasibility study reports shall decide on, and take responsibility for, loan interest rates, principles and conditions for adjusting the loan interest rates in the financial plans of the PPP projects on the basis of reference to, but not exceeding:

a/ The average interest rate for medium- and long-term loans applied by the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Bank for Investment and Development of Vietnam (BIDV) and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank);

b/ The common interest rate for medium- and long-term loans of commercial banks as announced by the State Bank of Vietnam on its portal (if any);

c/ The loan interest rate of similar projects (if any);

d/ The loan interest rates prescribed at Points a and b of this Clause shall be determined at the latest time within 3 months before the approval of prefeasibility study reports or feasibility study reports.

3. In case of investor appointment, a competent state agency shall propose the person competent to permit the appointment to decide on loan interest rate in the financial plan of the PPP project which must not exceed the lowest loan interest rate specified in Clause 2 of this Article.

Article 15. Profits of investors

1. Ministries and sectors shall promulgate profit limits for PPP projects under their management as mentioned in Clause 2, Article 73 of Decree No. 63/2018/ND-CP.

2. An investor’s return on equity in the stage of formulation and approval of prefeasibility study reports or feasibility study reports shall be determined according to profit limits for PPP projects promulgated by ministries and sectors and profits of other similar PPP projects (if any).

3. An investor’s return on equity shall be calculated from the time of the project commissioning as permitted by a competent authority.

4. In case of investor appointment: A competent state agency shall propose the person competent to permit the investor appointment to decide on the investor’s profit which must not exceed the minimum profit level promulgated by ministries or sectors.

Chapter V

PAYMENT OF THE STATE-CONTRIBUTED FUND IN PPP PROJECTS AND PAYMENT FOR INVESTORS PROVIDING SERVICES UNDER BTL OR BLT CONTRACTS FROM PUBLIC INVESTMENT FUNDS

Article 16.The State-contributed fund

1. The State-contributed fund and its use in PPP projects must comply with Article 11 of Decree No. 63/2018/ND-CP.

2. The State-contributed fund in projects shall be specified in project contracts in terms of ratio, value, progress and conditions for payment.

3. The State-contributed fund shall be paid only after the completed construction investment volume has been tested for acceptance, which must correspond to the ratio of investment capital sources stated in the project contract and conform to medium-term and annual public investment plans approved by competent authorities and stated in the project contract.

Article 17.Payment of State-contributed fund in PPP projects under Point a, Clause 1, Article 11 of Decree No. 63/2018/ND-CP

1. Payment principles:

a/ The allocation and inspection of allocation of public investment funds for partially covering construction costs of PPP projects must comply with the regulations applicable to investment funds from the state budget;

b/ After receiving documents on detailed allocation of public investment capital plans of ministries, sectors and localities, the State Treasury shall control the payment in accordance with this Circular;

c/ The State Treasury shall base itself on dossiers of request for payment submitted by agencies and units assigned to manage the State-contributed fund in PPP projects and project contracts to control the payment under regulations;

d/ In case a dossier of request for payment is required to be supplemented, the State Treasury shall, within 4 working days after receiving such dossier, issue a notification on payment refusal or notification to agencies and units assigned to manage the State-contributed fund in PPP projects so that they may complete the dossier under regulations;

dd/ The total fund to be paid to investors must not exceed the State-contributed fund in PPP projects approved by competent authorities. The total fund to be paid to investors in a year must not exceed the fund plan allocated to assigned PPP projects in that year. The accumulated funds to be paid for PPP projects must not exceed assigned medium-term public investment plans;

e/ Agencies and units requesting the payment of the State-contributed fund in PPP projects shall take responsibility before law and competent persons for the identification of investors that have guaranteed the full disbursement of the equity amount and satisfy loan disbursement conditions in accordance with project contracts; take responsibility for the accuracy of constructed volume and requested payment value; and ensure the validity of statistics and documents in dossiers provided to the State Treasury and competent state agencies.

2. Payment dossiers:

Agencies and units assigned to manage the State-contributed fund shall send the PPP project’s legal dossier for use as a basis for payment control to the State Treasury where it opens its account before or at the time of request for initial payment of the State-contributed fund in the PPP project. A dossier must comprise:

a/ The project contract and payment-related contract annexes (if any) (for single submission);

b/ A table calculating the value of completed construction volume requested for payment under the project contract, made by the investor and certified by the agency or unit assigned to manage the State-contributed fund in the PPP project (Appendix 1);

c/ A written request for payment of investment capital, made by the agency or unit assigned to manage the State-contributed fund in the PPP project (Appendix 2);

d/ A money transfer document in accordance with the Ministry of Finance’s regulations on the accounting document system;

e/ A document on the investor’s assurance of disbursement of the equity amount under the project contract, made by the agency or unit assigned to manage the State-contributed fund in the PPP project.

3. Time limit for payment of the State-contributed fund in PPP projects:

An annual plan on allocation of funds as the State-contributed fund in PPP projects only covers payment for the completed volumes tested for acceptance under the regulations (by December 31 of the plan year); the time limit for payment for the completed volume must comply with the law on public investment.

4. Advance payment and payment of the State’s support funds for the construction of auxiliary works and compensation for ground clearance and resettlement prescribed at Point d, Clause 1, Article 11 of Decree No. 63/2018/ND-CP:

a/ In case the State’s support funds are for performing all jobs of constructing auxiliary works and organizing payment of compensation for ground clearance and resettlement:

The dossier and documents for advance payment and payment of capital for a PPP project to serve the paying agency’s capital control and payment; contents of advance payment and payment for completed volumes; the State Treasury’s payment control principles; and the time limits for advance payment and payment must comply with the Ministry of Finance’s regulations on management and payment of state budget-funded investment capital and amending or supplementing documents (if any).

b/ In case the State’s support funds are for performing several jobs of constructing auxiliary works and organizing payment of compensation of ground clearance and resettlement: The order, procedures, dossier and time limit for payment must comply with Articles 16 and 17 of this Circular.

Article 18.Payment for investors providing services under BTL or BLT contracts and other similar contracts from public investment funds

1. Payment principles:

a/ The payment of the State-contributed fund for investors providing services under BTL or BLT contracts and other similar contracts in accordance with Clause 3, Article 11 of Decree No. 63/2018/ND-CP must comply with the project contract signed between the competent state agency and investor and regulations on management and use of public investment funds;

b/ Payment conditions, to-be-paid capital amount, time of payment, payment time limit, and payment dossier shall be prescribed in the project contract;

c/ The State-contributed fund shall be paid from the time services are provided as agreed in the project contract. The payment shall be made periodically on the basis of volume and quality of services as agreed in the project contract.

2. Dossier for payment:

a/ Legal dossier for single submission: The agency or unit assigned to manage the State-contributed fund in a PPP project shall send to the State Treasury where it opens its account a legal dossier for use as a basis for payment control. Such dossier must comprise the project contract, contract annexes and legal documents enclosed with the project contract;

b/ Dossier for payment:

- Table calculating the volume and quality of services, made by the investor or project enterprise;

- Written request for payment of investment capital, made by the agency or unit assigned to manage the State-contributed fund in a PPP project;

- Money transfer document, issued under the Ministry of Finance’s regulations in the accounting document system.

c/ The time limit for annual payment of the State-contributed fund in a PPP project must comply with the law on public investment.

Chapter VI

PLANNING OF FUNDS AND PAYMENT TO INVESTORS PERFORMING BTL OR BLT CONTRACTS FROM REGULAR EXPENDITURES AND REVENUES FROM THE PROVISION OF PUBLIC SERVICES

Article 19.Planning of funds and estimation, allocation and assignment of payment estimation to investors from regular expenditures

1. The planning of funds and estimation, allocation and assignment of estimation of regular expenditures to pay to investors must comply with the Law on the State Budget and guiding documents.

2. Fund plans on payment to investors from regular expenditures shall be incorporated in the three-year finance-state budget plans of ministries, sectors and localities as prescribed by law.

3. Based on project contracts signed between competent state agencies and investors/ project enterprises, project implementation schedule and scheduled time of operation and provision of public services of the project, ministries, sectors and localities shall plan funds and expenditure estimation to pay to investors from regular expenditures.

Article 20.Planning of funds and estimation of payment to investors from revenues from the provision of public services

The formulation, appraisal, approval and assignment of plans on medium-term fund investment from revenues from the provision of public services to pay to investors must comply with the Government’s regulations on medium-term and annual public investment plans (the Government’s Decree No. 77/2015/ND-CP of September 10, 2015, on medium-term and annual public investment plans, and Decree No. 120/2018/ND-CP of September 13, 2018) and autonomy mechanisms of public non-business units (the Government’s Decree No. 16/2015/ND-CP of February 14, 2015, prescribing the autonomy mechanism of public non-business units).

Article 21.Payment of regular expenditures and revenues from the provision of public services for investors

1. Payment principles:

a/ The payment of regular expenditures and revenues from the provision of public services to investors performing projects under BLT or BTL contracts must comply with the regulations on management and use of regular expenditures and revenues from retained public service charges and prices;

b/ Payment conditions, to-be-paid capital amount, time of payment, payment time limit, and payment dossier shall be prescribed in the BLT or BTL contract;

c/ The time for payment to investors shall be calculated from the time of provision of services as agreed in project contracts. Payments shall be made periodically based on the volume and quality of services as agreed in project contracts.

2. Dossier for payment:

a/ Legal dossier for single submission

The agency or unit assigned by the competent state agency to manage the State’s investment from regular expenditures and revenues from the provision of public services as payments to investors for BTL or BLT contract shall send to the State Treasury where it opens its account a legal dossier for use as a basis for payment control. Such dossier must comprise the project contract, contract annexes (if any) and legal documents enclosed with the project contract.

b/ Dossier for payment:

- Table calculating the volume and quality of services requested for payment, made by the investor and certified by the agency or unit assigned to manage the State’s investment from regular expenditures and revenues from the provision of public services and service-providing investor;

- Written request for payment made by the agency or unit assigned to manage the State’s investment as prescribed at Point a of this Clause, clearly stating the project name; project contract number; total capital amount to be paid to service-providing investors (by capital source); accumulated quantity of provided services and accumulation of paid funds (by capital source); capital amounts requested for payment (by capital source); name and account of beneficiary;

- Money transfer document, issued under the Ministry of Finance’s regulations in the accounting document system.

c/ The time limit for payment of regular expenditures and revenues from the provision of public services must comply with the regulations on the state budget and charges and relevant laws.

Chapter VII

INSPECTION, REPORTING AND FINALIZATION

Article 22.Inspection and reporting

1. Annually on a periodical or extraordinary basis, ministries, sectors, provincial-level People’s Committees and finance agencies at all levels shall inspect the management and use of investment preparation and project implementation expenses and the State-contributed fund in PPP projects by same-level competent state agencies or agencies assigned to manage such expenses and fund.

2. Annually, units using investment preparation and project implementation expenses and the State-contributed fund in projects of ministries, sectors, provincial-level People’s Committees shall report on the use of such expenses and fund to same-level finance agencies of ministries, sectors and localities.

3. Quarterly, investors and project enterprises shall report on the use of the State-contributed fund in projects to agencies and units assigned to manage public investment funds.

Article 23.Budget-yearfinalization

Annually, agencies and units assigned to manage expenses for investment preparation and project implementation and the State’s fund in PPP projects shall make finalization reports for each capital source and submit them to competent authorities for approval in accordance with the Ministry of Finance’s regulations on finalization of the use of state budget funds on a budget-year basis (Circular No. 85/2017/TT-BTC of August 15, 2017, prescribing the finalization of the use of state budget-funded investment capital on a budget-year basis; and Circular No. 137/2017/TT-BTC of December 25, 2017, prescribing the approval, appraisal, notification and summarization of annual finalization reports).

Article 24.Making, submission and approval of finalization reports of completed projects

1. Agency making finalization reports: project owner, or investor in case no project enterprise is established.

2. The finalization of investment capital of works of completed PPP projects must comply with the Ministry of Finance’s circulars on finalization of state-funded completed projects (Circular No. 09/2016/TT-BTC of January 18, 2016, and Circular No. 64/2018/TT-BTC of July 30, 2018). Particularly for dossiers to be submitted for finalization approval, agencies making finalization reports shall add project contracts and contract annexes (if any).

3. Competence to approve finalization reports: ministers, heads of ministerial-level agencies, chairpersons of provincial-level People’s Committees or chairpersons of district-level People’s Committees in case they are authorized by provincial-level People’s Committees to sign and perform project contracts and approve finalization reports.

4. Agencies verifying finalization reports:

a/ Competent units under ministries or sectors shall verify finalization reports of projects managed by ministries or sectors;

b/ Provincial-level Finance Departments shall verify finalization reports of projects managed by provincial-level People’s Committees;

c/ District-level Finance and Planning Divisions shall verify finalization reports of projects of which district-level People’s Committees are authorized to approve finalization reports.

5. Audit of finalization reports: Competent state agencies shall agree in project contracts with investors on the hiring and principles for selecting capable and experienced independent audit firms to audit the value of investment capital for construction of project works.

6. Contents of verification of finalization reports must comply with the Ministry of Finance’s Circular on finalization of state-funded completed projects.

7. Time limit for finalization:

The time limit for submitting finalization reports of completed projects to competent persons for approval shall be calculated from the date of signing the written record of handover and commissioning of project works. The time limit for verification and approval of a finalization report shall be calculated from the time of receiving a complete finalization dossier. Such time limit is prescribed as follows:

8. Ministries, sectors and provincial-level People’s Committees shall, after making the finalization of project works, send finalization reports to the Ministry of Finance for summarization and monitoring.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 25.Effect

1. This Circular takes effect on November 12, 2018, and replaces the Ministry of Finance’s Circular No. 55/2016/TT-BTC of March 23, 2016, prescribing the financial management of investment projects in the form of public-private partnership and investor selection expenses, Circular No. 75/2017/TT-BTC of July 21, 2017, amending and supplementing a number of articles of Circular No. 55/2016/TT-BTC, and Circular No. 30/2018/TT-BTC of March 28, 2018, amending and supplementing a number of articles of Circular No. 75/2017/TT-BTC.

2. In the course of implementation, should relevant legal documents referred to in this Circular be amended, supplemented or replaced, the amending, supplementing or replacing documents shall be complied with.

Article 26.Transitional provisions

1. For prefeasibility study reports and feasibility study reports approved before the effective date of this Circular, competent state agencies shall, pursuant to this Circular, review and adjust their financial plans for carrying out subsequent steps.

2. For project contracts under negotiation and not yet signed by the effective date of this Circular, competent state agencies shall, pursuant to this Circular, review, adjust and update relevant terms of project contracts.

3. Project contracts signed before the effective date of this Circular shall continue to be performed. In case a project is permitted for adjustment by the Government, competent state agencies may consider and decide on the application of this Circular, ensuring such project’s investment effectiveness.

4. Ministries, sectors and provincial-level People’s Committees shall report other cases in writing to the Ministry of Finance for study and guidance.-

For the Minister of Finance
Deputy Minister
TRAN VAN HIEU