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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
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No.
130/2007/TT-BTC
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Hanoi,
November 2, 2007
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CIRCULAR
AMENDING AND SUPPLEMENTING A NUMBER OF POINTS IN THE
MINISTRY OF FINANCES CIRCULAR No. 27/2007/TT-BTC OF APRIL 3, 2007, GUIDING THE
MANAGEMENT AND PAYMENT OF INVESTMENT CAPITAL AND NON-BUSINESS CAPITAL OF
INVESTMENT NATURE BELONGING TO THE STATE BUDGET CAPITAL SOURCE
Pursuant to State Budget Law
No. 01/2002/QH11 of December 16, 2002;
Pursuant to the November 26, 2003 Construction Law and the Government s Decree
No. 16/2005/ND-CP of February 7, 2005, on the management of investment projects
on the construction of works, and Decree No. 112/2006/ND-CP of September 29,
2006, amending and supplementing a number of articles of Decree No.
16/2005/ND-CP of February 7, 2005;
Pursuant to the Governments Decree No. 52/1999/ND-CP of July 8, 1999.
promulgating the Regulation on construction and investment management. Decree
No. 12/2000/ND-CP of May5, 2000, and Decree No. 07/2003/ND-CP of January 30,
2003. amending and supplementing a number or articles of the Regulation on
construction and investment management, promulgated together with the
Governments Decree No. 52/1999/ND-CP of July 8, 1999;
Pursuant to the Governments Decree No. 71/2005/ND-CP of June 6, 2005, on the
management of investment in the construction of peculiar works;
Pursuant to the Governments Decree No. 99/2007/ND-CP of June 13, 2007, on
management of expenditures for investment in construction of works;
The Finance Ministry amends and supplements a number of points in the Ministry
of Finances Circular No. 27/2007/TT-BTC of April 3, 2007. guiding the
management and payment of investment capital and non-business capital of
investment nature belonging to the state budget capital source, as follows:
1. Clause I,
Section A, Part II, is amended as follows:
1. For planning projects: They
have planning outlines or tasks, which have been duly approved.
2. For investment preparation
projects: They are in line with duly approved branch or territorial development
plannings.
3. For investment execution
projects: They have investment decisions which are issued prior to October 31
of the year preceding the plan year.
4. The duration for allocation
of capital for execution of group-B projects must not exceed four years, or two
years for group-C projects.
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5. Verification of allocation of
investment capital:
5.1. For projects managed by
ministries:
The Ministry of Finance shall
verify investment capital allocation plans, give its opinions on projects with
uncompleted investment procedures and failing to satisfy the conditions for
capital allocation, and concurrently notify these opinions to the State
Treasury. Ministries shall reallocate capital according to current regulations,
and submit reallocation plans to the Ministry of Finance and the State Treasury
for allocation and payment. Ministries plans on investment capital allocation
and reallocation in strict compliance with regulations serve as a basis for
capital allocation and payment.
5.2. For projects managed by
provinces or districts:
Based on investment capital
plans decided by Peoples Committees, provincial-level Finance Services or
district-level Finance and Planning Sections shall examine the planned capital
allocation (if any) by branches and units and report on cases of allocation in
contravention of regulations to provincial-or district-level Peoples Committees
and concurrently to the State Treasury.
5.3. Investors shall send to
finance agencies at various levels their investment capital allocation plans
enclosed with the following documents:
- For planning projects:
document approving the outline or tasks of the planning project and the cost
estimates for planning work.
- For investment preparation
projects: document approving the cost estimates for investment preparation
work.
- For investment execution
projects: document on the investment project on the construction of works (or
the techno-economic report, for projects for which only the techno-economic
report is required) and investment decision of a competent authority.
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2. Based on the above adjustment
principles, ministries, branches and localities shall adjust plans and send
adjusted plans to finance agencies at the same level and the State Treasury for
use as a basis for capital allocation and payment.
4. Point
3(3.1), Clause II, Section B, Part II, is amended as follows:
3.1. For projects funded with
domestic capital:
- The investment project on the
construction of works (or the techno-economic report, for projects for which
only the techno-economic report is required) enclosed with the investment
decision of a competent authority and decisions on readjustment to the project
(if any);
- The written decision on the
selection of the contractor according to the Bidding Law (including bidding,
designation of contractors, direct procurement, competitive offers, self-implementation,
and selection of contractors in special cases);
- The contract between the
investor and the contractor (with attached documents specified by the Ministry
of Construction);
- Cost estimates of each job,
work item or work, and cost estimate approval decisions, for the case of
contractor designation or self-implementation, and works performed not under
contracts.
5. Points
1,2 and 3, Clause III, Section B, Part II, are amended as follows:
1. Objects eligible for capital
advance and advance capital levels:
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- For contracts valued at under
VND 10 billion, the advance capital level is at least equal to 20% of the
contract value.
- For contracts valued at between
VND 10 billion and 50 billion, the advance capital level is at least equal to
15% of the contract value.
- For contracts valued at VND 50
billion or more, the advance capital level at least is equal to 10% of the
contract value.
1.2. For contracts for
procurement of equipment, the advance capital level is agreed upon by the
investor and the contractor on the basis of the payment schedule specified in
the contract but must not be lower than 10% of the contract value.
1.3. For EPC contracts:
- Capital for the procurement of
equipment is advanced according to the equipment supply schedule specified in
the contract.
- For other jobs, the advance
capital level is at least equal to 15% of the contract value.
1.4. For consultancy contracts:
The advance capital level is
agreed upon in the contract between the investor and the contractor and at
least equal to 25% of the contract value.
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The advance capital level
depends on the implementation schedule slated in the ground clearance plan.
1.6. For urgent projects such as
dike building and reinforcement, flood control and drainage works, seedling
projects, projects for immediately overcoming flood or natural disaster
consequences: The advance capital level is at least equal to 50% of the
contract value.
1.7. For some structures and
semi-finished products used in construction which are of great value and need
to be prefabricated in order to ensure construction progress schedule and some
special supplies which need to be reserved on a seasonal basis, the advance
capital level depends on practical needs and is agreed upon by the investor and
the contractor.
1.8. The advance of capital for
the above types of contract rests with investors and must be clearly stated in
construction contracts. Advance capital may be disbursed after contracts become
effective. If the investor and the contractor agree in the contract on a
guarantee for advance capital, the contractor shall provide such guarantee. The
advance capital level must not exceed the annual capital plan already approved
for the bidding package. Particularly for an ODA project, if its annual capital
allocation plan is lower than the foreign capital source, the advance capital
level must not exceed the foreign capital source.
2. Recovery of advance capital:
2.1. Advance capital for jobs
specified in Section 1 above shall be recovered upon payment for completed
volumes of contracts, with the recovery starting from the first payment and
completing when the payment for completed volumes reaches 80% of the contract
value. The recovery level at a specific time shall be determined by the
investor after reaching agreement with the contractor.
For ground clearance work:
- For ground clearance
compensation and support work: After making payment to beneficiaries, the
investor shall gather documents and carry out procedures for payment and
recovery of advance capital within 30 working days from the date of payment.
- For the purchase of
resettlement houses and other ground clearance works: Advance capital shall be
recovered upon each payment for completed volumes and fully recovered when
ground clearance work is completed.
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If the amount of advance capital
not recovered yet is left unused or used for other purposes, the investor shall
fully recover and refund it to the state budget. It is prohibited to use
advance capital for improper purposes or leave it unused.
2.3. If the plan year has
expired but advance capital has not yet been fully recovered because the
contract has not yet been paid up to the prescribed percentage, the amount not
recovered yet shall be further recovered under the subsequent years plan and
not be deducted from the subsequent years investment capital payment plan.
3. Documents on advance capital:
Apart from the specified basic
documents, the investor, when advancing capital, shall send to the State
Treasury the following documents:
- A written request for payment
of investment capital:
- Money transfer vouchers.
- Guarantee for the advance
amount to the contractor (if the investor and the contractor agree in the
contract on an advance guarantee).
6. Points 1,
2, 3, 4, 5, 6, 7 and 8, Clause IV, Section B, Part II, are amended as follows:
1. For jobs performed under
construction contracts, the payment for contracts must suit each type of
contract, contract prices and conditions specified in contracts. The number of
times of payment, payment period and conditions must be clearly stated in
contracts.
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Payment shall be made according
to percentage (%) of the contract price or completed work or work item price
corresponding to payment periods stated in the contract. After the contract is completed
and the takeover test is made, the principal shall pay to the contractor the
whole value of the signed contract and sums of money due to adjusted prices (if
any).
1.2. For payment based on fixed
unit prices:
Payment shall be made on the
basis of completed work volumes (including newly arising volumes, if any, which
are duly approved), which pass the takeover test in the payment period, and
such works unit prices stated in the contract or contract annexes. After the
contract is completed or the takeover test is conducted, the principal shall
pay to the contract the whole value of the signed contract and sums of money
due to adjusted prices (if any).
1.3. For payment based on
adjusted prices:
Payment shall be made on the
basis of completed work volumes (including newly arising volumes, if any, which
are duly approved), which pass the takeover test in the payment period, and
unit prices adjusted according to the contract. Upon the payment deadline, if
the conditions for adjustment of unit prices are still insufficient, payment
can be made based on the unit prices temporarily calculated upon signing of the
contract. The payment value shall be adjusted as soon as adjusted unit prices
are available according to the contract. After the contract is completed or the
takeover test is conducted, the principal shall pay to the contract the whole
value of the signed contract and sums of money due to adjusted prices (if any).
1.4. For payment based on
combined prices:
Payment shall be made according
to the provisions of Items 1.1, 1.2 and 1.3 above.
1.5. For work volumes arising
outside contracts:
- For any arising work volume
which is equal to 20% or less of the relevant work volume stated in the
contract and subject to a unit price stated in the contract, payment shall be
made according to that unit price.
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- For any additional work volume
which is beyond the scope of work stated in the contract and subject to the
payment mode based on package price, the additional value shall be included in
a cost estimate and the principal and the contractor shall sign a contract on
addition of that arising value.
1.6. Payment dossiers:
When a completed work volume is
tested before takeover according to the payment period and conditions stated in
the contract, the investor shall make and send a dossier of payment request to
the State Treasury, which comprises:
- A table of values of completed
work volumes under the contract (made according to a form set in Appendix 2 to
the Ministry of Constructions Circular No. 06/2007/TT-BXD of July 25, 2007,
guiding contracts in construction, or any document supplementing or replacing
it);
- A written request for
investment capital payment;
- Money transfer vouchers.
When a work volume arises
outside the contract, the investor shall send the Table of values of work
volumes arising outside the contract (made according to a form in Appendix 4 to
the Ministry of Constructions Circular No. 06/2007/TT-BXD of July 25, 2007,
guiding contracts in construction, or any document supplementing or replacing
it);
For jobs performed not under
construction contracts (for self-construction of works, project management jobs
directly performed by investors), payment shall be made to suit each type of
job, and based on the report on completed work volume and approved cost
estimate for each job.
3. The principle for payment
control by the State Treasury:
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4. The time limit and mode of
payment:
4.1. Within 7 working days after
receiving the investors complete payment dossier as specified, based on the
contract (or the approved cost estimate, for jobs performed not under
contracts) and the payable amount requested by the investor, the State Treasury
shall control and allocate capital to the project and concurrently pay, as
requested by the investor, directly to contractors and recover the advance
capital under regulations on the investors behalf.
The State Treasury shall control
payment on the principle that payment is made first and approval is given later
for each time of payment or control comes first and payment is made later for
the last time of payment for the bidding package and the contract. Based on
this principle, the State Treasury shall guide In detail the mode of payment
control, ensuring favorable conditions for investors and contractors and strict
compliance with the States regulations.
4.2. The annual capital amount
planned to be allocated to a project shall only be paid tor completed volumes
which have been tested for takeover by the end of December 31. The deadline for
payment (including advance and payment for completed volumes) is the end of
January 31 of the following year (except for projects with the implementation
and payment durations allowed by a competent authority to be prolonged).
5. For investment projects
funded with official development assistance (ODA), if treaties which have been
signed by competent agencies or organizations of the Socialist Republic of
Vietnam contain capital payment and settlement management provisions different
from those of this Circular, the provisions of those treaties prevail.
6. Investors shall arrange
sufficient funds under annual plans to purchase insurance for construction
works according to regulations. The State shall not pay to investors amounts
used to offset losses and risks falling within the scope of insurance if
investors do not purchase insurance for construction works under current
regulations.
7. The amount to be paid for
each job, work item or work must not exceed the approved cost estimate or
bidding package price. The total amount to be paid for a project must not
exceed its approved total investment capital.
The amount to be paid for a
project in a year (including advance and payment for completed volumes) must
not exceed the capital level planned to be allocated to the project for the
whole year. Particularly for ODA projects, if the capital planned to be
allocated is lower than the foreign capital amount, the capital level for
payment must accord to the foreign capital amount.
7. Point 2,
Clause II, Section C, Part II, is amended as follows:
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2.1. Advance of capital:
a/ A dossier for advance of
capital comprises:
+ The decision on the construction
of an urgent work, issued by a competent person;
+ The written request for
payment of investment capital;
+ The money transfer voucher.
+ The contractors guarantee for
the advance (if the investor and the contractor agree on advance guarantee in
the contract).
b/ Advance level and recovery of
advance capital:
+ The level of advance capital
is at least equal to 50% of the contract value or the approved cost estimate
for the work or work item.
+The advance capital shall be
gradually recovered upon each payment for completed volumes and fully recovered
when 80% of the contract value or the cost estimate value is paid.
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2.2. Capital payment:
The control and payment of
capital comply with the provisions of Section 6 above.
8. Point 2,
Clause III, Section C, Part II, is amended as follows:
2. Advance and payment of
capital:
The management, advance and
payment of capital for makeshift works shall be performed under the provisions
of Sections 5 and 6 above and the following additional provisions:
- For cases of package payment
specified in the Construction Ministrys
Circular No. 04/2005/TT-BXD of April 1, 2005, capital for makeshift works may
be accounted as payment for the completed work volume of the project. Apart
from the projects documents, the payment dossier also comprises a written
request for payment of investment capital and the money transfer voucher.
- For large and complicated
works with cost estimates for the building of makeshift houses at construction
sites for accommodation and construction administration, payment shall be
controlled based on the approved cost estimates. Apart from the projects
documents, the payment dossier also comprises the decision approving the cost
estimate, the approved cost estimate, a table of values of completed work
volumes, a written request for payment of investment capital, and the money
transfer voucher.
9. Point 3
(3.2 and 3.3), Section D, Part II, is amended as follows:
3.2. Advance payment of capital:
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- For projects capitalized at
under VND 1 billion, the advance capital is at least equal to 30% of the
contract value or the approved cost estimate. Advance capital shall be
gradually recovered upon each payment for completed work volumes and fully
recovered when 80% of the contract value or the cost estimate value is paid.
- A dossier of advance payment
of capital comprises: a written request for advance payment of investment
capital, the money transfer voucher, the contractors guarantee for the advance
(if the investor and the contractor agree on advance guarantee in the
contract).
- The management of advance
capital complies with the provisions of Section 5 above.
3.3. Capital payment:
- Non-business capital of
investment nature shall be transferred from the state budget to the State
Treasury for payment according to regulations on management and allocation of
non-business capital.
The control and payment of
capital comply with the regulations applicable to investment projects funded
with the state budget.
10. Clause
I, Section E, Part II, is amended as follows:
I. Reporting:
1. For investors, ministries and
provinces: Reports shall be made under the provisions of the Prime Ministers Decision
No. 52/2007/QD-TTg of April 16, 2007, on regulations on reports on
implementation of state investment capital, the Ministry of Planning and
Investments Circular No. 05/2007/TT-BKH of August 9, 2007, promulgating report
forms and guiding the implementation of the Prime Ministers Decisions No.
52/2007/QD-TTg of April 16, 2007 and the Ministry of Planning and Investments
Decision No. 803/2007/QD-BKH of July 30, 2007, promulgating regulations on
reporting on implementation of ODA programs and projects.
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- To comply with the information
and reporting regulations of the Finance Ministry.
- At the end of a plan year,
state treasuries shall settle the used investment capital with finance agencies
of the same level in accordance with regulations on state budget settlement.
- At the end of a plan year,
state treasuries shall certify the amounts paid in the year and the total
amounts paid from the construction commencement to the end of the state budget
year to each of projects formulated by investors.
11. Clauses
I and TV, Section F. Part II, are amended as follows:
I. INVESTORS:
- To perform their assigned
functions and tasks according to regulations. To receive and use capital for
proper purposes and proper objects in an economical and efficient manner. To
strictly abide by the provisions of law on the financial management of
development investment.
- To conduct takeover tests of
work volumes, make payment dossiers and file payment written requests for
contractors within time limits stated in contracts.
- To be answerable for the
accuracy and lawfulness of completed work volumes, norms, unit prices and cost
estimates of various kinds of jobs, quality of works and the value requested to
be paid: to assure the accuracy, truthfulness and lawfulness of data and
documents in dossiers supplied to the State Treasury and concerned state
agencies.
To send reports in time and
fully as prescribed to investment-deciding agencies and concerned state
agencies; to supply full dossiers, documents and facts according to regulations
to the State Treasury and finance agencies in service of capital management and
payment; to submit to the inspection by finance agencies and
investment-deciding agencies regarding the use of investment capital and
observance of the States development investment financial policies and regimes.
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- To request capital payment
when all conditions are satisfied and request the State Treasury to reply and
explain on matters they find unsatisfactory in capital payment.
IV. THE STATE TREASURY:
- To promulgate a process of
investment capital payment for application nationwide.
- To guide investors to open
accounts for advance and payment of capital.
- To control and pay capital in
time and fully for eligible projects.
- To clearly explain in writing
to investors any reduced or rejected payment amounts, to reply to investors
inquiries about capital payment.
- To control payment only on the
basis of documents supplied by investors and on the set payment principles,
take no responsibility for the accuracy of work volumes, norms, unit prices and
quality. When detecting that decisions of competent authorities are contrary to
current regulations, to make written proposals for re-consideration and
recommendations. Past the prescribed time limit, if no reply is given, to
settle the case according to their recommendations. If the given reply is
unsatisfactory, to settle the case according to competent authorities opinions
and, at the same time, to report such to the competent authorities of higher
level and finance agencies for consideration and handling.
- To urge investors to pay all
debts after the projects have been settled and their accounts liquidated.
- To comply with information and
reporting regulations and settle investment capital and non-business capital of
investment nature belonging to the state budget capital source according to the
State Budget Law and the Ministry of Finances guidance.
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- To conduct regular and
irregular inspections of investors execution of projects, observance of
development investment financial regulations and policies; and management and
use of investment capital. To suspend capital payment or recover capital
amounts which are used by investors for improper purposes, improper
beneficiaries or in contravention of the States financial management
regulations and, at the same time, report such to the Ministry of Finance for
handling.
- Not to join in takeover test
councils of works and projects.
- To organize capital control
and payment according to uniform professional processes, to simplify administrative
procedures while ensuring strict capital management and timely, adequate and
convenient payment to investors.
- At the end of a plan year, to
certify amounts paid in the year and total amounts paid from the construction
commencement to the end of the state budget year for each project, give
comments on the observance of management regulations, unit price norms and
other policies and regulations as prescribed.
- To be answerable to the
Minister of Finance and law for the receipt and use of state budget capital and
payment in construction investment.
12.
Implementation effect: This Circular takes effect 15 days after its publication
in CONG BAO.
FOR
THE MINISTER OF FINANCE
VICE MINISTER
Nguyen Cong Nghiep