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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.
08/2008/TT-BTC
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Hanoi,
January 29, 2008
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CIRCULAR
AMENDING
AND SUPPLEMENTING THE FINANCE MINISTRYS CIRCULAR NO. 108/2003/TT-BTC OF
NOVEMBER 7, 2003, WHICH GUIDES FINANCIAL MECHANISMS APPLICABLE TO
OFFICLVLASSISTANCE DEVELOPMENT (ODA)-FUNDED PROJECTS ON TREATMENT OF URBAN
DAILY-LIFE GARBAGE AND SOLID WASTE
Pursuant to the Governments
Decree No. 60/2003/ND-CP of June 6, 2003. detailing and guiding the
implementation of the State Budget Law;
Pursuant to the Governments Decree No. 134/2005/ND-CP of November 1, 2005,
promulgating the Regulation on management of foreign loans and payment of foreign
debts;
Pursuant to the Governments Decree No. 131/2006/ND-CP of November 9, 2006,
promulgating the Regulation on management and use of official development
assistance (ODA);
Pursuant to the Governments Decree No. 77/2003/ND-CP of July 1, 2003. defining
the junctions, tasks, powers and organizational structure of the Ministry of
Finance;
In furtherance of the Prime Ministers Official Letter No. 253/TTg-QHQT of
February 22, 2007. additionally approving financial mechanisms applicable to
ODA loan-funded projects on treatment of urban daily-life garbage and solid
waste;
The Ministry of Finance guides amendments and supplements to financial
mechanisms applicable to projects on treatment of urban daily-life garbage and
solid waste specified in the Finance Ministrys Circular No. 108/2003/TT-BTC of
November 7, 2003 (CircularNo. 108), as follows:
1. To amend and supplement
Point 2. Section B, Part I of Circular No. 108 as follows:
2. Financial mechanisms
applicable to ODA loan-funded projects on treatment of urban daily-life garbage
and solid waste:
2.1. Proportions of
allocated/re-lent ODA loans:
a/ The proportion of central
budget allocations (to the total ODA loan for each project or project component
on treatment of urban-daily-life garbage and solid waste) shall be determined
according to urban center grades of localities and scales of investment
(capacity of treatment factories) in the Table below:
Urban center grade
Scale of investment (ton/day)
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Proportion of re-lent ODA loan
(remaining %)
Special grade or grade I
On demand
50
50
Grade II
Up to 200
60
40
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Up to 150
70
30
Grade IV
Up to 100
80
20
Grade V
Up to 70
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10
b/ Principles of determining and
applying the aforesaid proportions:
- Scale of investment mentioned
in the Table above is ihe maximum scale of investment determined suitable to
each urban center grade as a basis for determination of the proportion of allocated/re-lent
ODA loan for each program or project.
For provincial/municipal Peoples
Committees that wish to make in vestment with a scale larger than the maximum
scale of investment suitable to the corresponding urban grade mentioned in the
Table above. in order to comply with local future urban development plannings
and pians, the proportions of central budget allocations shall also be applied
according to urban center grades with similar scales of investment.
Example: Town A of province X is
a grade-IV urban center but wishes to invest in a daily -life garbage treatment
factory with a capacity of 150 tons/day (equivalent to the maximum scale of
investment for a grade-Ill urban center). In this case, the central budget
covers only 70% of allocations, while the project owner must re-borrow 30% from
ODA loans for investment in the factory under the re-lending conditions
specified at Point 2.2 below.
The proportions of
allocated/re-lent ODA loan mentioned in the Table above do not apply to
investment projects in inter-urban center, inter-regional or inter-provincial
daily-life garbage and solid waste treatment zones. The Ministry of Finance
shall coordinate with concerned agencies in considering the proportions of
aliocated/re-lent ODA loan for each of those projects and submit it to the
Prime Minister for decision.
2.2. Re-lending conditions or
re-len: ODA loans:
a/ Re-lending conditions
strictly comply with general principles of the Governments Regulation on
re-lending foreign loans and aid and are specified as follows:
- Currency used in re-lending is
Vietnam dong. The re-lent value in Vietnam dong shall be determined according
to the foreign currency value upon each time of capital withdrawal and
converted into Vietnam dong at the foreign exchange rate publicized monthly by
the Ministry of Finance on its website (http://www.mof.gov.vn).
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- The re-lending term (including
the grace period) shall be determined by the Ministry of Finance suitable to
the capital recovery term indicated in the investment report of an approved
project or according to the re-lenders revaluation results, which, however,
must not exceed 20 years.
The grace period shall be
determined by the Ministry of Finance based on the period from the time of
construction to the time a project is completed and put into operation
indicated in the investment report of the approved project, or according to the
re-lenders revaluation results, which, however, must not exceed five years.
The grace period and the capital
recovery term are counted from the first date the project/project components
capital is withdrawn (unless otherwise agreed with a foreign donor).
- Interest incurred in the grace
period may be paid according to annual debt payment periods or incorporated
into the principal and paid in the principal-debt payment term (to be agreed
and decided by the re-lender and project owner).
- (Principal and interest) debt
payment period: six months.
b/ For projects serving urban
centers located in mountainous, highland, deep-lying, remote areas and islands,
if these urban centers are classified according to urban-center classification
criteria applicable in special cases as specified at Point 1, Article 14 of the
Governments Decree No. 72/2001/ND-CP of October 5, 2001, they are also entitled
to the following re-lending conditions:
- The maximum re-lendinn term is
20 vears. including a five-year grace period.
- Re-lending interest in the
grace period: Interest in the first two years may be paid later together with
interest of three subsequent years.
- Other re-lending conditions
comply with the provisions of Point 2.2.a above.
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3. Organization of
implementation:
The provisions on domestic
financial mechanisms in Sections 1 and 2 of this Circular apply from the
effective date of this Circular to new projects which are being or have
officially been registered into the list of ODA-calling projects but their
applicable financial mechanisms have not yet been approved by the Prime
Minister. For projects with financial mechanisms already approved before the
date this Circular takes effect, the approved financial mechanisms still apply.
This Circular takes effect 15
days after its publication in CONG BAO. Other provisions of the Finance
Ministrys Circular No. 108/2003/TT-BTC of November 7, 2003. guiding financial
mechanisms applicable to ODA-funded environmental sanitation projects, remain
effective.
Problems arising in the course
of implementation of this Circular should be promptly) reported to the Ministry
of Finance for study and appropriate amendment or supplementation.
FOR
THE MINISTER OF FINANCE
VICE MINISTER
Tran Xuan Ha