Decree No. 69/2019/ND-CP use of public property for making payment to investors in Build Transfer Contract

DECREE

Prescribing the use of public assets as payments to investors implementing work construction investment projects in the form of build-transfer contracts^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 26, 2013 Bidding Law;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the June 18, 2014 Construction Law;

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

Pursuant to the November 26, 2014 Investment Law;

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;

At the proposal of the Minister of Finance,

The Government promulgates the Decree prescribing the use of public assets as payments to investors implementing work construction investment projects in the form of build-transfer contracts.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

1. This Decree prescribes the use of public assets as payments to investors implementing work construction investment projects in the form of build-transfer contracts (below referred to as BT projects) as prescribed by law.

2. Public assets used as payments to investors implementing BT projects include:

a/ Land areas.

b/ Land, houses and land-attached assets (below referred to as working offices) of state agencies, public non-business units, people’s armed forces units, agencies of the Communist Party of Vietnam, socio-political organizations, socio-politico-professional organizations, social organizations, socio-professional organizations, and other organizations established in accordance with the law on associations (below referred to as agencies, organizations and units).

c/ Infrastructure assets serving national interests and public interests (below referred to as infrastructure assets);

d/ Other public assets as prescribed by the Law on Management and Use of Public Assets.

3. In case of auction of public assets to pay for build-transfer (BT) contracts, the use of proceeds from the auction as payments to investors implementing BT projects must comply with the Law on Public Investment and Law on the State Budget and relevant guiding documents.

Article 2.Subjects of application

1. Competent state agencies signing BT contracts.

2. Agencies, organizations and units authorized by competent state agencies to sign BT contracts or assigned the tasks of investment preparation, negotiation, and signing and implementation of BT contracts (below referred to as authorized agencies).

3. Investors implementing BT contracts (below referred to as investors).

4. Other agencies, organizations and individuals involved in the implementation of BT projects.

Article 3.Principles of use of public assets as payments for BT projects

1. The use of public assets as payments to investors implementing BT projects must adhere to the following principles:

a/ Such use complies with the laws on management and use of public assets, land, the state budget, investment, and construction.

b/ Investors implementing BT projects shall be selected through open bidding in accordance with the bidding law.

c/ Such use is permitted by competent state agencies in accordance with law.

2. The use of public assets as payments to investors implementing BT projects must adhere to the parity principle whereby the value of BT projects must be equivalent to that of public assets used as payments, specifically as follows:

a/ The value of public assets shall be determined in accordance with law based on market prices at the time of payment as prescribed in Clause 4 of this Article.

b/ The value of BT projects shall be determined based on bidding results.

3. The use of public assets as payments to investors implementing BT projects shall be shown in state budget accounts under the law on the state budget, specifically as follows:

a/ For centrally managed public assets, their use shall be shown in central budget accounts.

b/ For locally managed public assets, their use shall be shown in local budget accounts.

4. The time of payment for BT projects with the use of land or working offices is the time the People’s Committee of a province or centrally run city (below referred to as provincial-level People’s Committee) issues a decision to allocate or lease land to the investor. The time of payment for BT projects with the use of infrastructure assets or other public assets is the time a competent state agency issues a decision to transfer assets to the investor.

5. The loan interest shown in the financial plan of a BT contract on the value of the completed work of a BT project according to schedule no longer exists from the time a competent state agency issues a decision to allocate or lease land or transfer assets to the investor.

6. The transfer of public assets as payments to investors implementing BT projects shall be carried out after a BT project is completed or in correspondence with the completed construction volume of a BT project according to schedule as determined by a competent state agency under the investment law and construction law.

Article 4.Determination of value of BT projects for making payment

1. The value of a BT project stated in the BT contract used for making payment shall be determined based on bidding results and kept unchanged from the date the contract is signed, except the case specified in Clause 2 of this Article.

2. In case a competent state agency permits the adjustment of the scale, technical design or expenses for compensation and ground clearance of a BT project, or of the loan interest shown in the BT contract’s financial plan, leading to change in the value of the BT project:

a/ The adjusted value of the BT project shall be determined under the investment law, construction law and relevant laws at the time a competent state agency permits the adjustment.

b/ The adjusted value of the BT project stated in the BT contract’s annex shall be included in the value of the BT project to serve the payment and finalization of the contract in accordance with law.

3. The value of a BT project used for making payment is the project’s value finalized in accordance with law (below referred to as BT contract’s finalized value).

Chapter II

SPECIFIC PROVISIONS

Section 1

USE OF LAND AREAS AS PAYMENTS TO INVESTORS IMPLEMENTING BT PROJECTS

Article 5.Land areas used as payments to investors

1. Land areas used as payments to investors are subject to the form whereby the State allocates land with land use levy collection or leases land with one-off rental collection for the entire lease term in accordance with the land law.

2. Land areas used as payments to investors are uncleared land areas or cleared land areas which must satisfy the following criteria:

a/ The land areas are included in land use master plans or plans approved by competent state agencies.

b/ The recovery of land areas used as payments to investors implementing BT projects must comply with the land law.

c/ In case of use of cleared land areas as payments to investors implementing BT projects, provincial-level People’s Committees shall report such to the Prime Minister for consideration and decision before deciding on the project investment policy.

3. Competent state agencies shall select land areas used as payments to investors prescribed in Clause 2 of this Article, ensuring that the value of such land areas is equivalent to that of approved BT projects, specifically as follows:

a/ When signing a BT contract, if it is impossible to determine the value of an actual land area, the equivalent value of the land area to be used to make payment which is determined at the time of contract signing is equal to (=) the land area to be allocated multiplied by (x) the land price based on the new use purpose stated in the land price table issued by the provincial-level People’s Committee multiplied by (x) the land price adjustment coefficient for collection of land use levy or land rental issued by the provincial-level People’s Committee.

b/ When a competent state agency issues a land allocation or land lease decision, the value of land areas to be used to make payment shall be determined under Article 6 of this Decree.

Article 6.Determination of value of land areas used to make payment

1. The value of a land area used to make payment is land use levy or land rental paid on a one-off basis for the entire lease term. The determination of the value of a land area used to make payment must comply with the regulations on collection of land use levy, and land and water surface rentals. Land use levy or land rental exemption or reduction is not granted when determining the value of the land area used to make payment.

2. The value of a land area shall be determined according to the order and procedures for determining land prices prescribed in the land law, specifically as follows:

a/ The value of the land area used to make payment shall be determined at the time a competent state agency issues a land allocation or land lease decision in accordance with the land law.

b/ The provincial-level Department of Natural Resources and Environment shall organize the determination of the value of the land area used to make payment before reporting it to the land price appraisal council.

c/ Based on appraisal results given by the land price appraisal council, the provincial-level People’s Committee shall approve the value of the land area.

3. The value of a land area used to make payment is equivalent to that of the BT project and shall be kept unchanged from the date it is determined by a competent state agency, except the case specified in Clause 4 of this Article.

4. In case a competent state agency permits the adjustment of a land use master plan or construction master plan in accordance with law, leading to a change in the value of the land area used to make payment:

a/ The adjusted value of the land area used to make payment shall be determined in accordance with law at the time a competent state agency permits the adjustment. The adjusted value shall be shown in the annex to the BT contract signed between a competent state agency and the investor and included in the value of the land area used as payment to the investor.

b/ The order and procedures for determining the adjusted value of the land area used to make payment must comply with Clause 2 of this Article.

5. The actual value of a land area used to make payment is the value of the land area paid after the adjustment (if any) is made under the annexes to the BT contract as prescribed in Clause 4 of this Article while ensuring adherence to the principles prescribed in Clause 2, Article 3 of this Decree.

Article 7.Use of cleared land areas as payments for BT projects

1. The determination of the value of a land area used to make payment must comply with Article 6 of this Decree, specifically as follows:

a/ In case of land allocation with land use levy collection, the value of the land area used to make payment is land use levy determined under the regulations on collection of land use levy.

b/ In case of land lease, the value of the land area used to make payment is land rental paid on a one-off basis for the entire lease term which is determined under the regulations on collection of land and water surface rentals.

2. The use of a land area as payments for a BT project must adhere to the parity principle whereby the value of the land area is equivalent to the value of the project’s completed construction volume according to schedule set by a competent state agency in accordance with law, specifically as follows:

a/ Based on the completed construction volume of the BT project according to schedule, the competent state agency shall determine the equivalent value of the land area to make payment. The accounting of state budget revenues and expenditures must comply with Article 16 of this Decree.

b/ In case the value of the land area used to make payment is larger than the value of the BT project, the investor shall remit the difference in cash into the state budget. In case the value of the land area used to make payment is smaller than the value of the BT project, the State shall pay the difference to the investor in cash or a land area at the time of finalization of the completed BT project.

3. Competent state agencies shall grant certificates of land use rights and ownership of houses and land-attached assets (below referred to as certificates) to investors in accordance with the land law with regard to land areas used to make payment corresponding to the value of completed BT projects according to schedule set by a competent state agency in accordance with the investment law and construction law.

4. After the concerned provincial-level People’s Committee issues a land allocation or land lease decision, the parties to a BT contract shall state the loan interest in the contract’s financial plan on the value of the completed work of the BT project according to schedule corresponding to the value of the land area used to make payment, counted to the date of issuance of such decision, and sign a contract annex stating the adjusted value of the BT project.

5. When a BT project is completed and has its finalization approved under regulations, based on the value of the BT work volume under the BT contract and its annexes (if any), the contracting parties shall determine the value of the land area to make payment as follows:

a/ In case the total value of the land area used to make payment is larger than the total value of the BT project, the investor shall remit the difference in cash into the state budget or have the land area reduced correspondingly. The provincial-level People’s Committee shall make consideration and decision in accordance with law and take responsibility for its decision.

b/ In case the total value of the land area used to make payment is smaller than the total value of the BT project, the State shall pay the difference in cash or a land area to the investor; in case of using a land area to pay the difference to the investor, the parity principle shall be adhered to whereby the value of the increased land area must be equivalent to the difference between the total adjusted value of the land area used to make payment and the total adjusted value of the project.

c/ After completing payment under Point a or b of this Clause, the contracting parties shall sign a record certifying the completion of the payment in order to liquidate the contract in accordance with law.

Article 8.Use of uncleared land areas as payments for BT projects

1. Based on a 1:500-scale or 1:2,000-scale master plan approved in accordance with law, and proposals of the competent state agency signing the BT contract and the investor, the provincial-level People’s Committee shall make a written commitment with the investor on the use of land areas as payments for the BT project and, at the same time, assign:

a/ Local competent agencies and the investor to formulate a compensation and ground clearance plan and report it to a competent state agency for approval.

b/ The investor to make advance payment of an amount for compensation and ground clearance under the approved plan. Such amount shall be included in the value of the BT contract; no interest shall be charged on loans mobilized for BT projects.

c/ Local competent agencies and the investor to organize the compensation and ground clearance under the approved plan.

2. Based on compensation and ground clearance results and implementation progress of BT projects, provincial-level People’s Committees shall issue decisions to allocate or lease land to investors in accordance with law.

3. The determination of the value of land areas used to make payment and the payment for BT projects must comply with Articles 6 and 7 of this Decree.

Section 2

USE OF WORKING OFFICES AS PAYMENTS TO INVESTORS IMPLEMENTING BT PROJECTS

Article 9.Determination of value of working offices used as payments for BT projects

1. The value of a working office used as payments for BT projects is the value of land use rights and value of land-attached assets determined at the time the provincial-level People’s Committee issues a land allocation or land lease decision in accordance with the land law; land use levy or land rental exemption or reduction is not granted when determining the value of working offices for making payment, specifically as follows:

a/ Regarding the value of land use rights: In case of land allocation with land use levy collection, the value of the land area used to make payment is land use levy determined under the regulations on collection of land use levy. In case of land lease, the value of the land area used to make payment is land rental paid on a one-off basis for the entire lease term which is determined under the regulations on collection of land and water surface rentals.

b/ Regarding the value of land-attached assets: It is the value of assets determined based on results of the revaluation according to the market value.

2. The value of a working office used as payments for a BT project shall be determined at the time the concerned provincial-level People’s Committee issues a land allocation or land lease decision in accordance with the land law and kept unchanged from the date it is determined by a competent state agency at the time of signing the BT contract, except the case specified in Clause 3 of this Article.

3. In case a competent state agency permits the adjustment of a land use master plan or construction master plan in accordance with law, leading to a change in the value of a working office used to make payment:

a/ The adjusted value of the working office used to make payment shall be determined in accordance with law at the time the competent state agency permits the adjustment. The adjusted value shall be shown in the annex to the BT contract signed between the parties.

b/ The adjusted value of the working office used to make payment shown in the BT contract’s annex shall be included in the value of the working office used as payment to the investor.

4. The actually paid value of a working office is the value of such working office paid after the adjustment is made according to the BT contract’s annexes (if any) as prescribed in Clause 3 of this Article.

Article 10.Order and procedures for use of working offices as payments for BT projects

1. The use of a working office as payments for a BT project must comply with the law on management and use of public assets and may be realized after obtaining the Prime Minister’s written approval.

The Prime Minister’s written approval must have the following contents: working office used to make payment; agency, organization or unit assigned to sign and perform the BT contract; and agency, organization or unit assigned to carry out investment procedures and sign a project implementation contract in accordance with law.

2. Order and procedures

a/ For centrally managed working offices:

- The agency managing public assets of a ministry or central agency shall make a dossier of request for use of a working office as payments for a BT project under Point c of this Clause and submit it to the ministry or central agency for consideration, and send a written request to the Ministry of Finance for opinion on such use, and to the provincial-level People’s Committee of the locality where such working office is located for opinion on the relevant land use master plan and construction master plan.

- Based on opinions of the Ministry of Finance and provincial-level People’s Committee, the ministry or central agency shall summarize them and send a report to the Prime Minister for consideration and approval of the use of the working office as payments for the BT project.

b/ For locally managed working offices:

The provincial-level Department of Finance shall make a dossier of request for use of a working office as payments for a BT project under Point c of this Clause and report such to the provincial-level People’s Committee for the latter to send a report to the Prime Minister for consideration and approval of such use.

c/ A dossier of request for use of a working office as payments for a BT project (applicable to both centrally managed and locally managed working offices) must comprise:

- A report on the need for and necessity of implementation of the BT project and the use of the working office to make payment; temporarily calculated value of the project and value of the working office, inclusive of the value of land use rights and value of land-attached assets. Specifically, the value of land use rights shall be calculated under Point a, Clause 3, Article 5 of this Decree and the value of land-attached assets shall be temporarily calculated based on the booked residual value.

- A document stating opinions of the agency, organization or unit currently managing and using the working office and of its superior management agencies (if any).

- Other relevant papers (if any).

d/ Based on the Prime Minister’s written approval, related agencies shall select an investor through open bidding in accordance with the bidding law, sign a BT contract, and perform other tasks in accordance with the investment law, construction law and relevant laws. On that basis, a ministry or central agency (for centrally managed working offices) or provincial-level Department of Finance (for locally managed working offices) shall propose the provincial-level People’s Committee to issue a decision on land allocation or land lease with regard to the concerned working office according to the time prescribed in Clause 6, Article 3 of this Decree.

dd/ The agency managing public assets specified at Point a or b of this Clause shall organize the determination of the value of land-attached assets and value of land use rights, send the determined value to the provincial-level Department of Finance for reporting to the land price appraisal council for appraisal, and propose the provincial-level People’s Committee to approve the value of the working office used as payments to the investor.

3. The payment for BT projects, grant of certificates, and payment upon occurrence of adjustments must comply with Article 7 of this Decree.

Section 3

USE OF INFRASTRUCTURE ASSETS AS PAYMENTS TO INVESTORS IMPLEMENTING BT PROJECTS

Article 11.Determination of value of infrastructure assets used as payments for BT projects

1. The value of infrastructure assets used as payments for BT projects is the value of the right to operate infrastructure assets and shall be determined under the law on management and use of infrastructure assets and relevant laws.

2. The value of an infrastructure asset used as payments for a BT project shall be determined at the time a competent state agency issues a decision to transfer the asset to the investor and kept unchanged from the date it is determined by a competent state agency, unless the competent state agency permits the adjustment of such value in accordance with law.

Article 12.Order and procedures for use of infrastructure assets as payments for BT projects

1. The use of an infrastructure asset as payments for a BT project must comply with the law on management and use of public assets, law on management and use of infrastructure assets, and relevant laws, and may be realized after obtaining the Prime Minister’s written approval.

The Prime Minister’s written approval must have the following contents: infrastructure asset used to make payment; agency, organization or unit assigned to sign and perform the BT contract; and agency, organization or unit assigned to carry out investment procedures and sign a project implementation contract in accordance with law.

2. Order and procedures

a/ For centrally managed infrastructure assets:

- An agency, organization, unit or enterprise assigned to manage infrastructure assets shall make a dossier of request for use of an infrastructure asset as payments for a BT project under Point c of this Clause and submit it to the related ministry or central agency for consideration, and send a written request to the Ministry of Finance for opinion on such use, and to the provincial-level People’s Committee of the locality where such infrastructure asset is located for opinion on the relevant land use master plan and construction master plan.

- The ministry or central agency shall summarize opinions of the Ministry of Finance and provincial-level People’s Committee and send a report to the Prime Minister for consideration and approval of the use of the infrastructure asset as payments for the BT project.

b/ For locally managed infrastructure assets:

- An agency, organization, unit or enterprise assigned to manage infrastructure assets shall make a dossier of request for use of an infrastructure asset as payments for a BT project under Point c of this Clause and submit it to its superior management agency for consideration, and send a written request to the provincial-level Department of Finance for opinion on such use.

- The agency, organization, unit or enterprise assigned to manage infrastructure assets shall summarize opinions of the provincial-level Department of Finance and superior management agency and send a report to the provincial-level People’s Committee for the latter to submit a report to the Prime Minister for consideration and approval of the use of the infrastructure asset as payments for the BT project.

c/ A dossier of request for use of an infrastructure asset as payments for a BT project (applicable to both centrally managed and locally managed infrastructure assets) must comprise:

- A report on the need for and necessity of implementation of the BT project on construction of the work in the new location and use of the infrastructure asset to make payment; temporarily calculated value of the project and value of the infrastructure asset used as payments for the project which are determined under Clause 1, Article 12 of this Decree.

- Documents related to the BT project and infrastructure asset used as payments for the project.

d/ Based on the Prime Minister’s written approval, related agencies shall select an investor through open bidding in accordance with the bidding law, sign a BT contract, and perform other tasks under the investment law, construction law and relevant laws. On that basis, the ministry or central agency (for centrally managed infrastructure assets) or provincial-level People’s Committee (for locally managed infrastructure assets) shall issue a decision on allocation of infrastructure assets according to the time prescribed in Clause 6, Article 3 of this Decree.

dd/ An agency, organization, unit or enterprise managing an infrastructure asset shall organize the determination of the value of such asset used as payments for a BT projects and send a request to:

- The ministry or central agency for approval of the value of the infrastructure asset used as payments for the BT project (for centrally managed infrastructure assets);

- The provincial-level Department of Finance for the latter to assume the prime responsibility for, and coordinate with the superior management agency of the agency, organization, unit or enterprise managing the infrastructure asset and related agencies in, appraising and proposing the provincial-level People’s Committee to approve the value of the infrastructure asset used as payments for the BT project (for locally managed infrastructure assets).

3. The payment must comply with Article 7 of this Decree.

Section 4

USE OF OTHER PUBLIC ASSETS AS PAYMENTS TO INVESTORS IMPLEMENTING BT PROJECTS

Article 13.Determination of value of other public assets as payments for BT projects

The determination of value of other public assets as payments for BT projects must comply with the law on management and use of public assets, and relevant specialized laws and other laws, ensuring adherence to the principles prescribed in Article 3 of this Decree.

Article 14.Use of other public assets as payments for BT projects

1. The use of other public assets as payments for BT projects must comply with the law on management and use of public assets, and relevant specialized laws and other laws, and may be realized after obtaining the Prime Minister’s written approval at the request of ministries, sectors and localities managing public assets.

2. Dossiers, order and procedures for use of other public assets as payments to investors implementing BT projects must comply with Article 12 of this Decree.

Section 5

ESTIMATION, COST-ACCOUNTING AND FINALIZATION OF STATE BUDGET FUNDS FOR PUBLIC ASSETS USED AS PAYMENTS FOR BT PROJECTS

Article 15.Estimation of state budget funds

1. The value of public assets used as payments to investors implementing BT projects shall be included in annual state budget estimates submitted to competent authorities for decision and assignment of state budget estimates in accordance with the law on the state budget.

2. The value of public assets used as payments to investors implementing BT projects shall be accounted as a state budget revenue. The value of BT projects shall be accounted as a state budget expenditure for development investment according to the state budget index.

3. State budget revenue and expenditure estimates for centrally managed public assets shall be accounted in central budget funds; state budget revenue and expenditure estimates for locally managed public assets shall be accounted in local budget funds.

Article 16.Cost-accounting of state budget revenues and expenditures for the value of public assets used to make payment

1. The cost-accounting of state budget revenues and expenditures for the value of public assets used as payments to investors implementing BT projects shall be carried out in the form of recording of state budget revenues and expenditures.

2. In case the finalization of a BT project has been approved:

a/ If the actually paid value of public assets is larger than the finalized value of the BT project, revenue and expenditure recording shall be made based on the finalized value. When the BT investor remits into the state budget the difference between the value of public assets and the finalized value of the BT contract, the state budget revenue shall be recorded with regard to the value of public assets in accordance with the law on the state budget.

b/ If the actually paid value of public assets is smaller than the finalized value of the BT project, the state budget revenue in public assets shall be recorded with regard to the value of public assets used to make payment, and the state budget expenditure shall be recorded with regard to the project’s finalized value in accordance with the law on the state budget.

3. In case the finalization of a BT project has not been approved:

The state budget revenue in the value of public assets shall be recorded with regard to the value of public assets used to make payment, and the expenditure for advance payment of state budget funds shall be recorded in correspondence to the paid value of public assets for implementation of the BT project. When a competent state agency approves the finalization of the BT project, the project’s value shall be recorded as an expenditure based on the finalized value and the revenue and expenditure shall be recorded for the difference (if any) under Clause 2 of this Article.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 17.Transitional handling

1. For BT contracts for which payments are made with the use of land areas or working offices to investors implementing BT projects and which are signed in accordance with law before January 1, 2018, but the payments have not yet been completed by the time of contract signing, the payments shall be made under the signed contracts.

In case payment-related contents are not stated in a BT contract, the provisions of the 2013 Land Law, the 2014 Investment Law, the 2014 Construction Law, the 2015 Law on the State Budget, the 2017 Law on Management and Use of Public Assets, and relevant laws effective at the time of payment shall apply, specifically as follows:

a/ The determination of the value of a BT project must comply with the investment law, construction  law and relevant laws.

b/ The use of land areas and working offices as payments to the investor implementing a BT project must comply with the land law, specifically as follows:

- Land areas and working offices must comply with a land use master plan or plan approved by a competent state agency.

- For cleared land areas for which compensations have been paid, a report on working offices thereon shall be sent to the Prime Minister for consideration and decision.

c/ The value of land areas and working offices used as payments to the investor implementing a BT project must adhere to the parity principle whereby the to-be-paid value of land areas and working offices must be equivalent to the value of the BT project.

d/ The value of land areas and working offices used as payments to the investor implementing a BT project shall be accounted as state budget revenues and expenditures under the law on the state budget.

2. BT contracts signed between January 1, 2018, and before the effective date of this Decree which contain a term on the use of public assets to make payment must comply with the 2013 Land Law, the 2014 Investment Law, the 2014 Construction Law, the 2015 Law on the State Budget, the 2017 Law on Management and Use of Public Property, and relevant laws.

Article 18.Effect

1. This Decree takes effect on October 1, 2019.

2. To annul the Prime Minister’s Decision No. 23/2015/QD-TTg of June 26, 2015, providing the mechanism whereby the State uses land as payments to investors implementing construction investment projects in the form of build-transfer.

Article 19.Implementation responsibility

1. The Ministry of Finance shall guide the use of public assets as payments to investors implementing BT projects.

2. The Ministry of Planning and Investment shall guide the implementation of Clause 3, Article 1 of this Decree.

3. Ministries, central agencies and provincial-level People’s Committees shall organize the use of public assets as payments to investors implementing BT projects in accordance with law.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC