Resolution No. 26/2016/QH14 dated November 10, 2016 of the National Assembly on medium-term public investment plan of 2016 - 2020 period

RESOLUTION

On the 2016-2020 medium-term public investment plan[1]

Pursuant to the Constitution of the Socialist Republic of Vietnam;

Pursuant to Law No. 49/2014/QH13 on Public Investment;

Pursuant to Laws No. 01/2002/QH11 and No. 83/2015/QH13 on the State Budget;

After considering the Government’s Report No. 471/TTr-CP and Report No. 472/BC-CP of October 19, 2016; the National Assembly’s Finance and Budget Committee’s Verification Report No. 176/BC-UBTCNS14 of October 19, 2016; the National Assembly Standing Committee’s Explanatory Report No. 50/BC-UBTVQH14 of November 9, 2016, and opinions of National Assembly deputies on the 2016-2020 medium-term public investment plan,

RESOLVES:

Article 1. Objectives and orientations of medium-term public investment in the 2016-2020 period

1. Objectives:

To restructure and improve the efficiency of the use of public investment funds, attract to the utmost and effectively use development investment funding sources, basically complete the essential socio-economic infrastructure system to serve the achievement of the objectives set out in the 2016-2020 five-year socio-economic development plan and the economic restructuring in the 2016-2020 period.

2. Orientations:

a/ To allocate funds for accelerating and completing the implementation of national target programs, national important projects, and key, essential and urgent projects to boost socio-economic development in the whole country, create connection and have spill-over effects among regions and areas; and to tap to the utmost and effectively use funding sources of other economic sectors. Not to allocate development investment funds from the state budget for sectors and projects which can attract investment from non-state economic sectors;

b/ To prioritize state budget investment funds for mountainous and border areas, islands, ethnic minority areas, deep-lying and remote areas, areas frequently affected by natural disasters, typhoons and floods, and areas with extremely difficult socio-economic conditions; for provision of housing support for people with meritorious services to the revolution; and for performance of the tasks of responding to climate change, preventing and overcoming drought in the Central Highlands and southern central provinces, seawater intrusion in the Mekong River delta provinces, and the marine environmental pollution incident in the four central provinces;

c/ The use of state budget funds for investment in industries, sectors and programs during 2016-2020 must comply with the National Assembly Standing Committee’s Resolution No. 1023/NQ-UBTVQH13 on the principles, criteria and norms for allocation of development investment funds from the state budget in the 2016-2020 period;

d/ To prioritize the use of proceeds from the sale of state capital in a number of enterprises for investment in key projects that bring about high socio-economic efficiency.

Article 2. Total state budget fund for medium-term investment in the 2016-2020 period

1. The maximum total state budget fund for medium-term investment in the 2016-2020 period is VND 2,000,000 billion, including:

a/ VND 1,120,000 billion from the central budget, including VND 300,000 billion from foreign sources and VND 820,000 billion from domestic sources in which VND 260,000 billion will be raised through the issuance of government bonds (including also VND 60,000 billion through issuance of government bonds in the 2014-2016 period) and VND 250,000 billion will come from the sale of state capital in a number of enterprises;

b/ VND 880,000 billion balanced from local budgets.

2. Contingencies for the plan on medium-term investment with state budget funds in the 2016-2020 period, which will be used to address issues that may arise during the implementation of the plan, will be as follows:

a/ To set aside as contingency 10% of each funding source;

b/ Each ministry, central sector or locality will set aside as contingency 10% of the fund level allocated under the plan of each funding source.

Article 3. National target programs and national important projects

1. To arrange VND 72,817 billion of development investment funds from the state budget in the 2016-2020 period to implement 2 national target programs, including:

a/ VND 43,119 billion for the national target program on building a new countryside;

b/ VND 29,698 billion for the national target program on sustainable poverty reduction.

2. To arrange VND 5,000 billion for ground clearance work for the Long Thanh international airport project.

3. To allocate VND 80,000 billion for national important projects. The National Assembly shall consider and decide on the investment policy and specific funding levels under the 2016-2020 public investment plan for each national important project after the Government completes and submits dossiers of these projects to the National Assembly for decision on their investment policy in accordance with the Law on Public Investment.

Article 4. Principles for allocation of the 2016-2020 state budget fund plan

1. The allocation of funds must serve the achievement of the development objectives and orientations set forth in the 2011-2020 ten-year socio-economic development strategy, national, sectoral and local 2016-2020 socio-economic development plans, socio-economic development master plans, and sectoral and regional master plans already approved by competent authorities.

2. The allocation of funds must comply with the Law on Public Investment, the Law on the State Budget, the National Assembly Standing Committee’s Resolution No. 1023/NQ-UBTVQH13 on the principles, criteria and norms for allocation of development investment funds from the state budget during 2016-2020, and relevant documents.

3. State budget funds shall be allocated in a concentrated manner in order to avoid scattered and thinned-out investments leading to the prolonged implementation of projects and to ensure efficient use of these funds; to arrange sufficient counterpart funds for ODA-funded projects. At the same time, to implement solutions to raise funds from other lawful sources to complete and accelerate the implementation of the two national target programs, national important projects, key, essential and urgent projects, and target programs which create a basis for boosting socio-economic development in the whole country and connect and have spill-over effects among regions and areas.

4. Localities entitled to funds from the central budget in the 2016-2020 period shall commit to arranging additional funds from their local budgets and other lawful sources for completing projects on schedule. In case of increasing the total investment of a project under the medium-term investment plan assigned by competent authorities, a locality shall itself balance additional funds from other lawful sources so as to complete the project on schedule, ensuring its quality.

5. With regard to foreign funding sources, it is a must to consider and balance between borrowing demand and repayment capacity of ongoing and new projects.

Article 5. Order of priority in the allocation of state budget funds in the 2016-2020 period

1. Funds from domestic sources, excluding government bonds, shall be allocated in the following order of priority:

a/ To allocate sufficient funds to repay outstanding capital construction debts; to recover advanced amounts; not to arrange funds of the state budget to pay capital construction debts that arise after December 31, 2014;

b/ To allocate counterpart funds for projects funded with ODA or concessional loans of foreign donors; and state investment funds for public-private partnership (PPP) projects;

c/ To allocate funds for ongoing projects due to be completed in the 2016-2020 period;

d/ To allocate funds for new projects, in case there remain funds after allocations are fully made in the above order of priority.

2. Funds from the issuance of government bonds shall be allocated in the following order of priority:

a/ To allocate sufficient funds raised through the issuance of government bonds in the total investments of important projects and works in the transport and irrigation sectors specified in Appendix 3 to the National Assembly Standing Committee’s Resolution No. 726/NQ-UBTVQH13, and of the Son La hydropower plant resettlement project;

b/ After allocating sufficient funds raised through the issuance of government bonds for the above projects, to consider allocating funds for new urgent projects in the health, transport and irrigation sectors and for the program on solidification of pre-school and primary education classrooms and schools in ethnic minority, deep-lying and remote areas.

3. With regard to foreign funding sources, to allocate sufficient funds for feasible projects as planned and disburse funds for each project based on the central budget funds stated in the agreement signed for the project in the 2016-2020 period. The level of funds to be allocated to each project under the medium-term plan must not exceed the level of foreign funds of the central budget as approved by competent authorities.

Article 6. Solutions for implementation of the 2016-2020 medium-term public investment plan

1. To accelerate the restructuring of state budget expenditures in the direction of economically and effectively using funds and reducing current expenditures in order to increase the proportion of development investment expenditures. Ministries, sectors and localities shall practice thrift in each project under the Government’s regulations.

2. To restrict to the utmost the advance payment of medium-term public investment funds. Advance payments, when necessary, shall be strictly controlled in accordance with the Law on Public Investment and the Law on the State Budget. The advance amount for each project must not exceed the amount of funds to be allocated under the medium-term public investment plan and funding sources for repayment of advance amounts must be available.

3. To strictly manage the use of contingent funds under the medium-term public investment plan. Unallocated general contingent funds may be  used only in force majeure events for necessary and urgent objectives in accordance with the Law on the State Budget and the Law on Public Investment, and when state budget revenues can be ensured as planned. The use of general contingent funds shall be reported to the National Assembly Standing Committee for consideration and decision before it is effected.

4. To allocate state budget funds and raise more funds from other sources for investment in infrastructure in the form of public-private partnership (PPP). To boost the implementation of the policy on mobilization of social resources for public services in the fields of health care, education and training, culture, and sports, and of infrastructure works and projects serving production and daily-life activities of rural residents.

5. Heads of the Government, ministries, central sectors and localities shall take responsibility before law for their investment policy decisions, and ensure the quality of reports proposing, appraising or approving investment policy and investment decisions, putting an end to the uncareful and improper preparation of projects, decision on scattered and ineffective investment, and approval of inaccurate total investment levels. They shall make investment policy decisions only for projects which are truly necessary after they have been appraised to clarify their effectiveness and funding sources and the capacity to balance and allocate funds, ensuring that there are sufficient financial resources for implementation of the projects once they are approved.

6. To increase inspection, examination, audit and supervision of the observance of discipline in public investment management; to strictly control the objectives and use efficiency of investment fund; to ensure publicity and transparency in the borrowing, management and use of loans; to strictly handle individuals and collectives that violate the public investment law and regulations of the National Assembly, the Government and competent authorities.

Article 7. To assign the Government

1. To quickly complete dossiers and draft resolutions on investment policy for national important projects and submit them to the National Assembly for consideration and decision in accordance with the Law on Public Investment.

2. Before assigning the 2016-2020 medium-term public investment plan, to review and quickly finalize the list of projects and their expected allocated funds for reporting to the National Assembly Standing Committee for consideration and opinion before January 31, 2017. Projects included in the list of projects under the medium-term public investment plan must meet all the conditions prescribed in the Law on Public Investment. The fund allocated for each project must conform with the investment fund balancing capacity and comply with the objectives, orientations, principles and order of priority in the allocation of medium-term public investment funds in the 2016-2020 period.

3. To organize, and direct ministries, sectors and localities to synchronously and determinedly implement solutions for, implementation of the 2016-2020 medium-term public investment plan, and inspect and strictly handle violations.

Article 8. Organization of implementation

1. The Government, ministries, central sectors and localities shall implement this Resolution according to their respective functions.

2. The Standing Committee, the Finance-Budget Committee, the Ethnic Council and other committees of the National Assembly, the State Audit Office of Vietnam, National Assembly deputies’ delegations and National Assembly deputies shall oversee the implementation of this Resolution.

3. The Central Committee and member organizations of the Vietnam Fatherland Front and lawfully established social organizations shall supervise and urge people of all strata to implement this Resolution.-

This Resolution was passed on November 10, 2016, by the XIV^th National Assembly of the Socialist Republic of Vietnam at its 2^nd session.

Chairperson of the National Assembly
NGUYEN THI KIM NGAN