Chỉ thị 18/CT-TTg 2019 tăng cường quản lý nâng cao hiệu quả sử dụng vốn vay ODA

• Số hiệu: 18/CT-TTg
• Loại văn bản: Chỉ thị
• Nơi ban hành: Thủ tướng Chính phủ
• Người ký: Nguyễn Xuân Phúc
• Ngày ban hành: 29/06/2019

THE PRIME MINISTER -------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 18/CT-TTg	Hanoi, June 29, 2019

DIRECTIVE

REGARDING IMPROVEMENT IN MANAGEMENT AND USE OF OFFICIAL DEVELOPMENT ASSISTANCE AND FOREIGN CONCESSIONAL LOANS FOR DEVELOPMENT INSTEAD OF REGULAR EXPENSES

In recent times, the mobilization, management and use of ODA and foreign concessional loans are primarily used for investment in socio-economic projects and infrastructure, contributing positively to the country's development. This contribution is most notable in the development of traffic infrastructure, electricity generation, wastewater treatment, agriculture, rural areas, climate change adaptation and in the construction of a number of schools, central and tertiary hospitals. In addition, the implementation of programs and projects funded by ODA and foreign concessional loans helps with policy formulation, modern technology application and human resources training. Policies and legal provisions regarding the mobilization, management and use of ODA and foreign concessional loans are being improved.

Beside the accomplishments, there are also limitations and issues. A number of negotiated and contracted projects have yet to be proposed by ministries and thus yet to be added to the medium-term public investment plans by competent authorities. This affects the implementation and disbursement schedule agreed with the sponsors. Project preparation quality fails to meet standards, and slow implementation increases the total amount of investment and expenditure for land clearance. Reciprocal capital provision is neither sufficient nor timely. A number of on-lending projects have difficulties in repayment, resulting in debt restructuring or borrowing provisional imprest fund from the Government’s Accumulated Fund for repayment. Some programs and projects do not receive sufficient funding, disbursement is slow, etc.

Vietnam has become a middle-income country, the sources of ODA loans are diminishing, and the Government's current sources of foreign loans are mostly concessional loans with interest rate close to that of the market. With this background, improvement in the management and use of ODA and foreign concessional loans are of utmost necessity in order to overcome the aforementioned limitations and issues and to further utilize foreign concessional loans for socio-economic development. Implementing Resolution No. 07-NQ/TW dated November 18, 2016 issued by the Political Bureau on policies, resolutions regarding state budget restructuring, public debt management to ensure safe and stable national finance, Law on Public debt management in 2017, Resolution No. 582/NQ-UBTVQH14 dated October 5, 2018 issued by the Standing Committee of the National Assembly on missions, resolutions to further implement policies regarding management and use of foreign loans, the Prime Minister directs that ministries, regulatory bodies, local governments, project owners and relevant organizations, individuals carry out the policies and resolutions as follows:

I. MAIN POLICIES REGARDING MOBILIZATION, MANAGEMENT AND USE OF ODA AND FOREIGN CONCESSIONAL LOANS, FOCUSING ON DEVELOPMENT INSTEAD OF REGULAR EXPENSES

1. The mobilization, management and use of ODA and foreign concessional loans must be connected with public investment restructuring and the orientation for mobilization and use of these loans in each period of time, especially the implementation of the public investment restructuring in 2017 - 2020 and towards 2025 project approved in the Prime Minister’s Decision No. 63/QD-TTg dated January 12, 2018.

Programs/projects funded by ODA and foreign concessional loans must synchronize with the medium-term public investment plans and the 5-year borrowing and public debt repayment plan in order to be approved by a competent authority. When seeking approval for a program/project from the Prime Minister, ministries, regulatory bodies, local governments need to identify the financing mechanism of each program, project (allocation, on-lending or combination of both), clarify the necessity of the project, total investment, socio-economic efficiency and repayment responsibility; eliminate programs/projects with low or unclear socio-economic efficiency.

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3. ODA and foreign concessional loans can only be used for development, not for regular expenses. The responsibility of management agencies, investors, project owners, fund users shall be increased. Based on the agreement with the sponsor, the responsibilities of ministries, regulatory bodies, local governments shall be as follows: review programs/projects that are concluded and effective, and/or being implemented; reduce administrative expenses such as purchase of automobiles, office equipment, overseas business trips, refresher training, project management; ensure effectiveness and prevent wastage. The time limit of the regular expense section in on-going ODA-funded programs/projects shall not be extended.

The agreements and international treaties related to ODA and concessional loans that are concluded and effective shall be followed in accordance with the provisions in the National Assembly’s Resolution No. 49/2017/QH14 dated November 13, 2017 on the 2018 state budget estimate. Pursuant to the provisions on investment cost, ministries, regulatory bodies, local governments shall proactively assess, identify the project's nature and propose necessary revisions to the investment decision (if any), which serves as the basis for the project’s fund allocation.

For new borrowing projects, projects preparing to enter loan agreement negotiation, ministries, regulatory bodies, local governments shall not use the loans for regular expenses and only propose the use of the loans for the following purposes: (i) cover expenses in foreign currencies (importing/purchasing foreign goods, services, consultancy); (ii) construction expenses included in the total investment amount; (iii) expenses related to technology transfer; explain in detail the need for loans from sponsors with conditions related to the origin of goods, contractors. The loans shall not be spent on automobiles, office equipment, spare equipment and materials for operation after project completion, training, seminars. The reciprocal capital shall be used for project preparation, tax payment, payment for loan interest, fees, land clearance expenses, project management expenses in accordance with the law.

4. The fund is managed and used in two ways: allocation from the central state budget for programs/projects that are included in the central state budget plan or on-lending for programs/projects with possible recoupment. For local programs/projects whose budgets are partially state-funded and partially on-lent based on a Government-regulated ratio, gradually decrease the ratio of state-funded proportion to on-lent proportion. Local governments need to ensure that the on-lending amount of the ODA and concessional loans is within the total debt limit allowed in the Law on Annual state budget and the ratio of borrowing to repayment approved by the National Assembly.

It is the foremost priority that loans be taken to make up for budget deficit; on-lending must be evaluated and appraised to ensure efficiency and should only be done if there is unused borrowing capacity. The Government shall not on-lend the foreign loans to industries and fields that have access to commercial loans, which are backed by the Government.

5. After the loan agreement conclusion, programs/projects must be reported to a competent authority for inclusion in the medium-term public investment plans and the annual budget allocation plan, which allows timely fund disbursement. The expense management agency shall manage expenses and ensure that disbursement is within the estimated amount.

6. Ministries, regulatory bodies, local governments, project owners must receive adequate reciprocal capital for project implementation. Land clearance shall be well prepared. Difficulties and problems during implementation shall be resolved in cooperation with the sponsor. The cases that exceed their competence shall be reported to the Prime Minister for further consideration and decision.

7. Ministries, regulatory bodies, local governments need to evaluate the loan cost, thus prioritizing using ODA and concessional loans with low cost for the state budget. Only on-lend concessional loans whose interest rate is close to that of the market to projects that are highly efficient and solvent. Limit the use of the concessional loans for expenses covered by central government budget, with the exception of highly urgent projects that are listed in the medium-term public investment plan approved by the authority.

8. Agencies authorized to on-lend these loans shall strictly appraise the on-lent programs/projects and be responsible for the appraisal results. In the case that a project is not efficient or solvent, another funding source shall be allocated instead of on-lending a foreign loan.

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10. Increase the modernization of the information system regarding ODA and foreign concessional loan management via upgrading the information technological system, ensuring regular, timely updates on negotiation, conclusion, implementation, disbursement, etc.; identify issues early on in order to produce timely solutions.

II. APPOINTMENT OF IMPLEMENTATION ORGANIZATIONS

1. The Ministry of Finance shall:

a) Disseminate and organize the implementation of the Law on Public debt management and the Decrees elaborating the Law on Public debt management.

b) Publish information regarding the condition framework for ODA, concessional loans from main sponsors. This information provides a basis for ministries, regulatory bodies, local governments, project owners, organizations, agencies, enterprises to calculate before deciding to propose projects funded by ODA and/or foreign concessional loans in accordance with the Law on Public debt management.

c) Formulate the 5-year borrowing and public debt repayment plan, the 3-year medium-term public debt management program and the annual borrowing and public debt repaying plan, seek approval from a competent authority and supervise the implementation.

d) Take charge, cooperate with the Ministry of Planning and Investment and relevant agencies in developing and proposing a fund-raising framework or an agreement on the framework for ODA, concessional loans with foreign sponsors in each period of time, suitable with the new conditions, circumstances, ensuring that the commitments are conformable with Vietnamese law; gradually reducing the ratio of foreign concessional loans to total public debt and improving the efficiency of foreign concessional loans, focusing ODA loans, concessional loans on major, wide-scale projects that stimulate socio-economic development, avoiding allocating ODA, concessional loans across too many projects and/or fields.

dd) Take charge in evaluating the grant element, identifying the domestic financial mechanism and evaluating the impact that public debt has on the loan proposal.

e) Cooperate with the Ministry of Planning and Investment in consolidating the medium-term public investment program and the annual state budget estimate.

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h) Promulgate the guideline on the determination of development expenses covered by the state budget in programs/projects funded by ODA, concessional loans.

i) Disburse, ensure that the expenses do not exceed the approved estimate. Reach an agreement with the sponsor on the mechanism for application of exchange rate to ODA/foreign concessional loans.

k) Cooperate with ministries, regulatory bodies, local governments, authorized on-lending agencies in appraisal, disbursement and recovery of the principal and interest to repay foreign loans.

l) Periodically report, evaluate the mobilization, management and disbursement of ODA/foreign concessional loans in public debt, request and implement solutions for difficulties, problems, accelerate implementation, disbursement processes and improve fund efficiency.

m) Develop and complete the database about ODA/foreign concessional loans in public debt to support the management process under the new circumstances.

2. The Ministry of Planning and Investment shall:

a) Take charge, cooperate with the Ministry of Finance and relevant agencies in drafting a Decree to replace Government’s Decree No. 16/2016/ND-CP and Government’s Decree No. 132/2018/ND-CP to better suit the Law on Public investment (amended) approved by the National Assembly and submit it to the Government for promulgation.

b) Take charge, cooperate with the Ministry of Finance and ministries, regulatory bodies, local governments in choosing programs/projects suitable with the principles, orientations of attraction of ODA and concessional loans in the 2018 – 2020 period and the 2021 - 2025 vision approved by the Prime Minister in Decision No. 1489/QD-TTg dated November 6, 2018. The chosen programs/projects shall be proposed to the Prime Minister for approval.

c) Compile a list of projects whose aim is to promote socio-economic development sorted in order of priority. This list serves as the basis for selecting projects to be funded by ODA/foreign concessional loans. Appraise projects strictly. Do not use the loans for investment objectives and/or projects with low or obscure socio-economic efficiency.

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dd) Take charge, cooperate with the Ministry of Finance, ministries, regulatory bodies, local governments in distributing development expenses, among which are expenses for projects funded by ODA and foreign concessional loans, ensuring that the plan is balanced out to suit the committed disbursement process and be within the approved foreign loan limit.

e) Take charge, cooperate with ministries, regulatory bodies in adequately providing reciprocal capital within the state budget.

g) Cooperate with the Ministry of Finance in resolving difficulties during the disbursement process of programs/projects funded by ODA and foreign concessional loans.

h) Take charge, cooperate with the Ministry of Construction and relevant agencies in reviewing current provisions on development projects, clarifying categories of development expenses of construction projects and of non-construction projects, proposing to a competent authority to issue guidelines. Regarding some specific expenses of development projects (expenses for international consultancy, domestic consultancy, project management, foreign investment survey, medical and educational training, indirect expenses of construction projects), there shall be provisions on limits or expense limit rate in the total investment amount, ensuring thriftiness, efficiency.

i) Evaluate the implementation and efficiency of foreign-funded projects following the assignment stated in the Prime Minister’s Directive No. 03/CT-TTg dated January 30, 2019 elaborating the Standing Committee of the National Assembly’s Resolution No. 582/NQ-UBTVQH14. Research and submit a consolidated report to a competent authority to promulgate the assessment criteria for projects/programs based on priority level, necessity, urgency, efficiency, risk of each type of socio-economic projects and foreign-funded programs/projects. These criteria are the basis for selecting projects to be funded by ODA/foreign concessional loans in the most effective manner. Submit a research to a competent authority to promulgate provisions on assessment criteria for post-investment efficiency of projects/programs, among which are projects funded by ODA/foreign concessional loans.

3. Other ministries, regulatory bodies, local governments shall:

a) Compile a list of prioritized development projects, focus on infrastructure investment, among which, project efficiency and investment shall be considered thoroughly when proposing use of concessional loans. Grant loans on conditions that suppliers, contractors appointed by foreign sponsors are only allowed when the foreign sponsor’s goods, equipment are more technologically advanced. Review programs/projects funded by ODA/foreign concessional loans, evaluate the capacity of principle payment and reciprocal capital provision, project’s socio-economic efficiency, solvency of province and project owner. If any project is considered ineffective, it will not be proposed for implementation. Prioritize the ODA loans for major, wide-scale constructions and/or projects that solve national, regional and interregional development problems. <0}

Foreign loans shall not be used for tax, fee or loan interest payment; loans shall not be used for purchase of automobiles, spare materials and equipment for operation after project completion. Land clearance fee, project management fee, taxes, interest expenses, fees collected by the foreign party during the construction period must be covered by the reciprocal capital in accordance with the law instead of the loans.

For on-going programs/projects, review and send an offical dispatch detailing items that are not yet urgent or imperative to the Ministry of Finance, Ministry of Planning and Investment in order to proceed with project adjustment and fund cutback from the sponsor.

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b) Cooperate with the Ministry of Planning and Investment in allocating adequate fund for programs/projects funded by ODA/foreign concessional loans in the medium-term public investment plan and the annual state budget estimate.

c) Cooperate with the Ministry of Planning and Investment in providing adequate reciprocal capital for programs/projects funded by ODA/foreign concessional loans (including reciprocal capital from state budget for targeted assistance; fund to balance local budget and other legal fund sources).

d) Direct the land clearance process, direct project owners to implement their programs/projects in a timely manner, ensuring quality, efficiency.

dd) Governing agencies shall urgently classify, evaluate the detailed expenses of programs/projects, and reach a consensus with the sponsor on cutting expenses covered by ODA/foreign concessional loans, submit a report and an assessment regarding the cutback’s impact to the Ministry of Finance with the principles as follows:

- Review the purchases of equipment to ensure thriftiness and efficiency, the loans shall not be used for purchase of automobiles, office equipment.

- Training following Programs and Projects approved by the Government and the Prime Minister may continue until their completion. Project owners need to review the curriculum and remove unnecessary content.

- Ministries, regulatory bodies, local governments shall proactively review, reduce expenses for research, survey, policy formulation, refresher training, operation of project management board; calculate the cost of the remaining activities necessary for project operation and allocate the fund using regular expenses from the state budget. The loans shall not be used for these activities.

e) Annually, submit a consolidated report on implementation of the policies and duties assigned in this Directive to the Ministry of Finance in accordance with Government’s Decree No. 94/2018/ND-CP dated June 30, 2018 on public debt management.

III. IMPLEMENTATION ORGANIZATION

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THE PRIME MINISTER




Nguyen Xuan Phuc