CIRCULAR

PRESCRIBING RETURN ON EQUITY OF INVESTORS, STATE CONTRIBUTION TO PROJECTS AND FINANCIAL STATEMENT OF COMPLETED PPP WORK ITEMS OF PROJECTS ON CONSTRUCTION OF EASTERN SECTIONS OF THE NORTH – SOUTH EXPRESSWAY DURING 2017 – 2020

Pursuant to the Law on investment dated November 26, 2013;

Pursuant to the Law on public investment dated June 18, 2014;

Pursuant to the Law on construction dated June 18, 2014;

Pursuant to the Law on investment dated November 26, 2014;

Pursuant to the Law on state budget dated June 25, 2015;

Pursuant to the Resolution No. 52/2017/QH14 dated November 22, 2017 by the National Assembly on policies for investment in projects on construction of Eastern Sections of the North – South Expressway during 2017 - 2020;

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Pursuant to the Government’s Decree No. 63/2018/ND-CP dated May 04, 2018 on Investment in the form of Public-Private Partnerships;

Pursuant to the Government’s Decree No. 30/2015/ND-CP dated March 17, 2015 regarding guidelines for some articles on investor selection of the Law on bidding;

Pursuant to the Government’s Decree No. 32/2015/ND-CP dated March 25, 2015 on construction cost management;

Pursuant to the Government’s Decree No. 59/2015/ND-CP dated June 18, 2015 on construction project management;

Pursuant to the Government’s Decree No. 42/2017/ND-CP dated April 05, 2017 on amendments to the Government’s Decree No. 59/2015/ND-CP dated June 18, 2015 on construction project management;

Pursuant to the Government’s Decree No. 77/2015/ND-CP dated September 10, 2015 on annual and medium-term investment plans;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

In implementation of the Government's Resolution No. 20/NQ-CP dated March 28, 2018 on the Project on construction of Eastern Sections of the North – South Expressway during 2017 - 2020;

At the request of the Director of the Investment Department;

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Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides for the return on equity of investors, the state contribution to projects and financial statement of completed PPP work items of projects on construction of Eastern Sections of the North – South Expressway during 2017 – 2020 (hereinafter referred to as “PPP project”) prescribed in the Government’s Resolution No. 20/NQ-CP dated March 28, 2018 (hereinafter referred to as “Resolution No. 20/NQ-CP”).

Article 2. Regulated entities

This Circular applies to regulatory authorities, agencies assigned to manage the State funds contributed to PPP projects (hereinafter referred to as “State funding managing agencies”), investors, project enterprises, and other authorities, organizations and individuals involved in the execution of PPP projects of the Project on construction of Eastern sections of the North – South Expressway during 2017-2020 as regulated in the Resolution 20/NQ-CP.

Chapter II

SPECIFIC PROVISIONS

Article 3. Determining return on equity of investors

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2. The rate of return prescribed in Clause 1 of this Article is the average profit per equity of the investor (expressed as %) in accordance with regulations laid down in Clause 3 Article 1 of the Resolution No. 20/NQ-CP. An investor will earn profit from the time when a competent authority gives approval for the operation of the PPP project.

3. The investor’s return on equity specified in the project contract shall be determined through bidding for investor selection. In case only one investor is successful in the prequalification, the regulatory authority shall submit a report thereof to the Government for consideration and decision on the investor’s return on equity.

Article 4. State contribution to PPP projects

1. The State contribution to the PPP project must comply with regulations in Clause 1 Article 1 of the Resolution No. 20/NQ-CP.

2. The State contribution used to cover partial construction costs for ensuring the financial feasibility shall be determined according to the result of the bidding for selection of investors executing the PPP project.

3. The State contribution to PPP projects is included in the plan for medium-term public investment by funding derived from state budget for the period 2016 – 2020 allocated to nationally important projects according to the National Assembly’s Resolution No. 26/2016/QH14 dated November 10, 2016 and National Assembly’s Resolution No. 52/2017/QH14 dated November 22, 2017.

Article 5. Managing payment of state contributions to PPP projects

1. The State funding used for covering costs of works performed by regulatory authorities shall be managed and paid in accordance with regulations on management and payment of investment funds derived from state budget.

2. With regard to the State funding used for covering partial construction costs, the Government shall make payment for the completed workload after the investor has carried out procedures for disbursement of 50% of the equity and is eligible to apply for disbursement of the borrowed capital in accordance with Clause 1 Article 1 of the Resolution No. 20/NQ-CP according to the following principles:

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b) The payment of the State contribution must be conformable with the quantity or the value of the completed and recorded construction workload, and not exceed the funding prescribed in the plan for annual and medium-term public investment funding derived from state budget for executing PPP projects approved by a competent authority.

3. The allocation of public investment funding allocated for covering construction costs and the examination thereof shall conform to regulations on management and payment of investment funding derived from the state budget.

Article 6. Monitoring payment of State contribution

1. With regard to work items performed by regulatory authorities:

Documents submitted for advancing and payment of State contribution, contents of advanced funding and payment for completed workload, rules for controlling payments of the State Treasury, and the time limits for advancing and payment of State contribution shall be performed in accordance with regulations of the Ministry of Finance at the Circular No. 08/2016/TT-BTC dated January 18, 2016, the Circular No. 108/2016/TT-BTC dated June 30, 2016, and the Circular No. 52/2018/TT-BTC dated May 24, 2018.

2. With regard to State contribution used for covering partial construction costs:

a) The State funding managing agency shall provide the State Treasury where its account is opened with the following legal documents:

- The project contract and its appendixes (if any) (these documents shall be submitted once at the time of the initial submission of application for disbursement of the State funding);

- The public investment plan allocated for executing the PPP project by a competent authority;

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- The written request for payment of state contribution to the PPP project made by the State funding managing agency (Appendix No. 02);

- Remittance vouchers made according the Ministry of Finance’s regulations on accounting vouchers;

- The document made by the State funding managing agency to certify the full disbursement of the investor’s equity as regulated in Clause 1 Article 1 of the Resolution No. 20/NQ-CP and the investor’s eligibility to apply for disbursement of the borrowed capital under terms and conditions of the project contract.

b) Payment principles:

- The allocation of public investment funding for covering construction costs of a PPP project and the supervision thereof shall conform to regulations on investment funding derived from the state budget.

- Upon the receipt of detailed plans for allocation of public investment funding from ministries, regulatory authorities and local governments, the State Treasury shall monitor the disbursement of state funding in accordance with regulations hereof.

- The State Treasury shall monitor the payment of the State contribution to the PPP project according to the request for allocation of the State funding submitted by the State funding managing agency and the project contract.

- If an application for allocation of state funding to a PPP project needs to be modified, within 04 business days from the receipt of the application, the State Treasury shall give a document refusing to allocate the state funding or requesting the State funding managing agency to modify the submitted application.

- Total amount of state funding paid to the investor shall not exceed total amount of the State contribution to the PPP project as approved by a competent authority; total amount of state funding paid to the investor during a year shall not exceed the approved funding planned to be allocated to that PPP project in that year. The accrued amount of state funding allocated to a PPP project shall not exceed the one stated in the authorized medium-term public investment plan.

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- The agency requesting for payment of state contribution to the PPP project shall assume responsibility before the law soft and the competent officer for the certification of the full disbursement of the investor’s equity and the investor’s eligibility to apply for disbursement of borrowed capital under terms and conditions of the project contract; assume responsibility for the completed workload and the amount of state funding to be paid as requested; ensure the legality of figures and documents submitted to the State Treasury and relevant regulatory authorities.

Article 7. Financial statement of completed PPP projects

1. Principles:

After the PPP project has been completed, commissioned and transferred for operation, the statement of investment and construction funding must be made in accordance with the Ministry of Finance’s Circulars on financial statement of completed projects funded by state budget (including the Circular No. 09/2016/TT-BTC dated January 18, 2016 and the Circular No. 64/2018/TT-BTC dated July 30, 2018) and regulations herein.

2. Formulation, submission and approval for financial statement of a completed PPP project:

a) Agencies in charge of preparing statements of completed PPP projects:

- Agencies assigned by the Ministry of Transport to manage the State contribution to PPP projects shall take charge of preparing statements of the State contribution for covering costs of works performed by regulatory authorities.

- Investors shall prepare statements of construction works that they execute and complete as regulated.

b) Documents submitted for approving the financial statement of a completed PPP project (01 set of which shall be sent to the agency in charge of verifying and approving the financial statement) include the documents prescribed in the Ministry of Finance’s Circular on financial statements of completed projects funded by the state budget, project contracts and their appendixes (if any).

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d) Agency in charge of verifying financial statements of completed projects: The Ministry of Transport.

dd) Auditing of financial statement of a completed project: The Ministry of Transport and the investor shall reach an agreement on employment and principles for selection of a qualified and experienced independent auditing firm to perform the auditing of the project's investment capital.

e) Project statements shall be verified in accordance with regulations of the Ministry of Finance’s Circular on statements of completed projects funded by the state budget.

g) Time limit for completion of financial statement of a completed PPP project is prescribed in Clause 7 Article 24 of the Circular No. 88/2018/TT-BTC dated September 28, 2018 by the Ministry of Finance.

h) Upon the completion of the statement of completed project, the Ministry of Transport shall submit reports thereof to the Ministry of Finance for monitoring and consolidation.

Article 8. Implementation

1. This Circular comes into force from January 23, 2019.

2. During the implementation of this Circular, if any legislative documents that are referred to in this Circular are amended, supplemented or superseded, the new ones shall apply.

3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.

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PP. MINISTER
DEPUTY MINISTER




Tran Van Hieu