CIRCULAR

Guidelines on the management of payment and settlement of investment capital

 for land clearance and resettlement projects funded by state budget 

Pursuant to the State Budget Law No. 01/2002/QH11 dated December 16, 2002;

Pursuant to the Construction Law No. 16/2003/QH11 dated November 26, 2003;

Pursuant to the Government Decree No. 16/2005/NĐ-CP dated February 7, 2005 on Project Management for Investment Construction Projects and the Government Decree No. 112/2006/NĐ-CP dated September 29, 2006 on Amending and Supplementing Certain Provisions of the Government Decree No. 16/2005/NĐ-CP dated February 7, 2005;

Pursuant to the Government Decree No. 99/2007/NĐ-CP dated June 13, 2007 on the management of construction project costs;

Pursuant to the Government Decree No. 52/1999/NĐ-CP dated July 8, 1999 on the issuance of the Regulation on Investment Management and Construction, the Government Decree No. 12/2000/NĐ-CP dated May 5, 2000, and the Government Decree No. 07/2003/NĐ-CP dated January 30, 2003 on Amending and Supplementing Certain Provisions of the Regulation on Investment Management and Construction issued together with the Government Decree No. 52/1999/NĐ-CP dated July 8, 1999;

Pursuant to the Government Decree No. 77/2003/NĐ-CP dated July 1, 2003 on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

 The Ministry of Finance issues guidelines on the management of payment and settlement of investment capital for land clearance and resettlement projects funded by state budget as follows:

Part I

GENERAL PROVISIONS

 1. This Circular guides the management of payment and settlement of investment capital for cases where compensation, support, and resettlement work using state budget funds are carried out according to land clearance and resettlement projects; including:

- Land clearance and resettlement projects to implement local investment and socio-economic development plans.

- Land clearance and resettlement projects separated from construction project investments of ministries and central agencies, assigned to provincial People's Committees (hereinafter referred to collectively as provincial People's Committees) where the projects are implemented.

In cases where compensation, support, and resettlement work is a component of a construction project investment approved by competent authorities (not separated into a land clearance and resettlement project), the management of payment and settlement shall be carried out in accordance with the guidelines of the Ministry of Finance for projects invested with development capital and public service capital with investment characteristics from state budget funds.

This Circular does not apply to the resettlement project of the Son La Hydropower Project (to be implemented according to separate guidelines of the Ministry of Finance).

Land clearance and resettlement projects not using state budget funds may apply the provisions of this Circular.

2. The establishment, review, and approval of land clearance and resettlement projects shall be carried out in accordance with the guidelines of the Ministry of Planning and Investment. The project investor for land clearance and resettlement projects shall be determined by the competent authority in accordance with the law.

3. Sources of capital for land clearance and resettlement projects implemented by localities include:

- Local government budget capital for land clearance and resettlement projects to implement local investment and socio-economic development plans.

- Targeted supplementary capital from the central government budget for the local government budget for independent land clearance and resettlement projects separated from construction project investments of ministries and central agencies, assigned to provincial People's Committees where the projects are implemented.

- Central government budget capital allocated annually in the annual state budget estimates for land clearance and resettlement projects that are components separated from construction project investments of ministries and central agencies, assigned to provincial People's Committees where the projects are implemented.  

Part II

SPECIFIC PROVISIONS

I. Allocation of Capital and Transfer of Capital to Land Clearance and Resettlement Projects:

1. For land clearance and resettlement projects using local government budget capital:

Based on the annual investment capital budget index, People's Committees at all levels allocate and decide to assign the investment capital budget for each land clearance and resettlement project under their management; simultaneously send to the State Treasury at the location where the account of the land clearance and resettlement project investor is opened for monitoring and as the basis for controlling and settling capital.

2. For independent land clearance and resettlement projects separated from construction project investments of ministries and central agencies, assigned to provincial People's Committees where the projects are implemented:

Based on the annual investment capital budget index from targeted supplementary capital from the central government budget for the local government budget to implement independent land clearance and resettlement projects separated from construction project investments of ministries and central agencies, provincial People's Committees allocate and decide to assign the investment capital budget for each land clearance and resettlement project to implement construction project investments of ministries and central agencies in the locality; ensuring the objectives and total capital amount; simultaneously send to the State Treasury at the location where the account of the land clearance and resettlement project investor is opened as the basis for controlling capital settlement.

3. For component land clearance and resettlement projects separated from construction project investments of ministries and central agencies, assigned to provincial People's Committees where the projects are implemented:

Based on the annual investment capital budget index, ministries and central agencies have the responsibility to allocate and assign the investment capital budget for each land clearance and resettlement project in each locality; send to provincial People's Committees, simultaneously send to the State Treasury.

Based on the investment capital budget assignment documents of ministries and central agencies; provincial People's Committees notify the investment capital budget to the land clearance and resettlement project investors for implementation.

Based on the investment capital budget assignment documents of ministries and central agencies; the State Treasury notifies the budget and transfers the capital of ministries and central agencies to the State Treasury of the province for monitoring and as the basis for controlling and settling capital.

In case the State Treasury of the province decentralizes to the State Treasury of the district, town, city under the province (collectively referred to as the State Treasury of the district level) for supervision and payment, the State Treasury of the province shall notify the budget estimate and transfer funds to the State Treasury of the district level for supervision and payment.

4. The examination and allocation of investment capital for land clearance and resettlement projects by financial agencies at all levels shall be carried out in accordance with the guidelines of the Ministry of Finance on management and payment of investment capital and operational capital with investment characteristics from state budget funds.

II. Payment of Investment Capital for Land Clearance and Resettlement Projects:

1. Opening an account: The project owner of land clearance and resettlement projects may open an account at the State Treasury where it is convenient for the supervision and payment of funds and convenient for the transactions of the project owner of land clearance and resettlement projects.

2. Documentation to be submitted to the State Treasury:

To serve the work of managing and supervising the payment of investment capital, the project owner of land clearance and resettlement projects must submit to the State Treasury where the payment account is opened the basic documentation of the project (these documents are original or certified true copies, only sent once until the end of the investment project, except in cases requiring supplementation or adjustment), including:

2.1. For planning capital:

- The document of the competent authority approving the outline or task of planning; approved budget estimate for planning work.

- The document selecting the contractor in accordance with the law on bidding.

- Contract between the project owner and the contractor.

2.2. For preparatory investment capital:

- Approved budget estimate for preparatory work.

- The document selecting the contractor in accordance with the law on bidding.

- Contract between the project owner and the contractor.

2.3. For implementation investment capital:

- Land clearance and resettlement project and the approval document of the land clearance and resettlement project according to the guidance of the Ministry of Planning and Investment.

- Approved compensation, support, and resettlement plan; approved budget estimate for compensation, support, and resettlement (if not included in the approved compensation, support, and resettlement plan).

- Approved budget estimate for organizing the implementation of compensation, support, and resettlement.

For land clearance and resettlement projects that include construction of resettlement areas or purchase of resettlement houses, construction of infrastructure for non-agricultural production and business services, the following additional documents must be submitted:

+ Purchase contract for resettlement houses of the project owner.

+ Document selecting the contractor in accordance with the law on bidding.

+ Contract between the project owner and the contractor.

+ Approved detailed budget estimate of works, designated tender packages, and self-execution.

3. Advance payment of capital:

3.1. For compensation and support activities:

3.1.1. The advance payment application file includes the following documents:

- Basic project documentation, including:

+ Land clearance and resettlement project and the approval document of the land clearance and resettlement project according to the guidance of the Ministry of Planning and Investment.

+ Approved compensation, support, and resettlement plan; approved budget estimate for compensation, support, and resettlement (if not included in the approved compensation, support, and resettlement plan);

- The project owner's registration plan for land clearance implementation with the State Treasury (in the form issued by the State Treasury) as the basis for advance payment.

- Application for investment capital payment (in the form issued by the State Treasury).

- Withdrawal of investment capital (in the form issued by the State Treasury).

3.1.2. Amount of advance payment: According to the registered land clearance implementation plan with the State Treasury but not exceeding the annual capital plan already allocated. Advance payment can be made in one or multiple installments based on the need for advance payment.

3.1.3. Time limit and form of advance payment: Based on the advance payment application file submitted by the project owner, within five working days from the date of receipt of complete and valid files, the State Treasury will make the advance payment to the project owner, and at the request of the project owner, directly pay to the beneficiary (if applicable).

3.2. For the contract for purchasing houses for resettlement:

3.2.1. The advance payment application file includes the following documents:

- Basic project documentation, including:

+ Land clearance and resettlement project and the approval document of the land clearance and resettlement project according to the guidance of the Ministry of Planning and Investment.

+ Approved compensation, support, and resettlement plan; approved budget estimate for compensation, support, and resettlement (if not included in the approved compensation, support, and resettlement plan);

+ Purchase contract for resettlement houses of the project owner.

- Application for investment capital payment (in the form issued by the State Treasury).

- Withdrawal of investment capital (in the form issued by the State Treasury).

3.2.2. Amount of advance payment: Agreed upon by the contractor and the project owner based on the payment schedule in the contract, but at least 10% of the contract value and not exceeding the annual capital plan already allocated.

3.2.3. Time limit and form of advance payment: Based on the advance payment application file submitted by the project owner, within five working days from the date of receipt of complete and valid files, the State Treasury will make the advance payment to the project owner, and at the request of the project owner, directly pay to the beneficiary.

3.3. For construction contracts, equipment procurement contracts for resettlement areas, non-agricultural production and business service areas; consulting and planning contracts; tender packages and other works: Follow the guidelines of the Ministry of Finance on management and payment of investment capital and operational capital with investment characteristics from state budget funds.

3.4. In case of advance payment but unable to pay to the beneficiary due to force majeure, the project owner must deposit the money at the State Treasury.

4. Recovery of advance payment:

4.1. For compensation and support activities: After paying to the beneficiary, the project owner of land clearance and resettlement projects is responsible for collecting evidence, processing payment procedures, and refunding the advance payment at the State Treasury within the latest thirty working days from the date of payment to the beneficiary.

4.2. For the contract for purchasing houses for resettlement: The advance payment is recovered with each payment of completed volume.

4.3. For construction contracts, equipment procurement contracts for resettlement areas, non-agricultural production and business service areas; consulting and planning contracts; tender packages and other works: Follow the guidelines of the Ministry of Finance on management and payment of investment capital and operational capital with investment characteristics from state budget funds.

5. Payment of completed volume:

5.1. For compensation and support activities: The value of the completed volume to be paid is the value determined based on the confirmation record of the completed volume.

5.1.1. Payment documents include:

- Project basic documentation as stipulated in point 3.1.1, section II, part II of this Circular.

- The confirmation record of the quantity of compensation and support that has been implemented. This record is prepared by the project sponsor or the Compensation, Support, and Relocation Council, signed and stamped by its members including: the project sponsor; the Compensation, Support, and Relocation Council; the State Treasury (if making payments for compensation and support according to a contract with the project sponsor) and the beneficiary (if the beneficiary is households or individuals, only their signatures are required).

- Application for investment capital payment (in the form issued by the State Treasury).

- The application for advance payment of investment capital for interim payments (in accordance with the form issued by the State Treasury).

- Withdrawal of investment capital (in the form issued by the State Treasury).

5.1.2. Payment period and payment method: Based on the payment request documents submitted by the project sponsor, within seven working days from the date of receiving complete and valid documents, the State Treasury will provide investment capital for payment to the project sponsor, and at the same time, make direct payments to the beneficiaries upon the sponsor's request (if applicable); recover the advance payment capital in accordance with regulations.

5.2. For housing purchase contracts serving relocation: The value of completed work volume to be paid is based on the contract price and the handover record.

5.2.1. Payment documents include:

- Project basis documents as stipulated in Point 3.2.1, Section II, Part II of this Circular.

- Handover record.

- Application for investment capital payment (in the form issued by the State Treasury).

- The application for advance payment of investment capital for interim payments (in accordance with the form issued by the State Treasury).

- Withdrawal of investment capital (in the form issued by the State Treasury).

5.2.2. Payment period and payment method: Based on the payment request documents submitted by the project sponsor, within seven working days from the date of receiving complete and valid documents, the State Treasury will provide investment capital for payment to the project sponsor, and at the same time, make direct payments to the beneficiaries upon the sponsor's request; recover the advance payment capital in accordance with regulations.

5.3. For completed construction volumes, completed equipment volumes of the relocation area, non-agricultural production and service areas, and other completed works: Follow the guidelines of the Ministry of Finance regarding the management and payment of investment capital and public investment funds from state budget sources.

6. For organizational costs of compensation, support, and relocation, temporary advances, payments, and settlements shall be carried out in accordance with the provisions of the Ministry of Finance in the Circulars guiding the implementation of Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and relocation when the State requisitions land.

III. Settlement of Investment Capital According to Annual Budget Periods:

Follow the guidelines of the Ministry of Finance on preparing and reviewing reports on the settlement of basic construction investment capital from state budget sources according to annual budget periods.

For land clearance and relocation projects separated from construction project investment projects: The project sponsor of the land clearance and relocation project is responsible for preparing the settlement report, submitting it to the project sponsor of the construction project investment for consolidation into the annual investment capital settlement of the construction project investment project.

IV. Settlement of Investment Capital for Completed Projects:

Follow the guidelines of the Ministry of Finance on the settlement of completed projects from state budget sources.

For land clearance and relocation projects separated from construction project investment projects:

- The project sponsor of the land clearance and relocation project is responsible for settling the investment capital of the land clearance and relocation project, submitting it for approval by the competent authority; sending the approved settlement report to the project sponsor of the construction project investment.

- The project sponsor of the construction project investment is responsible for settling the investment capital of the construction project investment (excluding the portion of the investment capital of the land clearance and relocation project); consolidating the results of the settled investment capital of the land clearance and relocation project into the overall settlement of the construction project investment project.

V. Responsibilities and Relationships Among Agencies in Managing Payments and Settlements of Investment Capital for Land Clearance and Relocation Projects:

1. Project sponsor of the land clearance and relocation project:

- Fulfill the responsibilities of the project sponsor as prescribed in Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and relocation when the State requisitions land and Decree No. 84/2007/NĐ-CP dated May 25, 2007 of the Government detailing procedures for compensation, support, and relocation when the State requisitions land.

-  Prepare requirements and plans for the use of investment capital for the land clearance and relocation project, submit them to the project sponsor of the construction project investment (in cases where the funding for the land clearance and relocation project is allocated from the capital of the construction project investment) or prepare the investment capital plan for the land clearance and relocation project, report to the superior agency to ensure funding for the land clearance and relocation project (in cases where the funding for the land clearance and relocation project is independently allocated from the construction project investment).

- Directly manage, settle, and finalize the investment capital of the land clearance and relocation project.

- Report on the implementation of investment capital for the land clearance and relocation project as required by the project sponsor of the construction project investment; promptly report to the project sponsor of the construction project investment in cases where the land clearance and relocation costs exceed the planned costs during implementation.

- Finalize the investment capital and report the results of the finalized investment capital of the land clearance and relocation project, which have been approved by the competent authority, to the project sponsor of the construction project investment for consolidation into the overall settlement of the construction project investment.

- Perform other tasks of the project sponsor as prescribed by the Ministry of Finance regarding the management and settlement of investment capital for projects funded by development investment capital and public investment funds from state budget sources.

2. Project sponsor of the construction project investment:

- Prepare the capital investment plan for land clearance and resettlement projects based on the requirements and capital utilization plans of the land clearance and resettlement project investors; report to the superior authority to ensure sufficient funding for the implementation of land clearance and resettlement projects (in cases where the project's capital is allocated from the capital of construction investment projects).

- Monitor the implementation of capital investment for land clearance and resettlement projects separated from construction investment projects; report to the competent authority deciding on investment in construction investment projects to consider and handle cases where the costs of land clearance and resettlement exceed the costs determined in the construction investment project during implementation.

- Consolidate the results of final settlement of capital investment for land clearance and resettlement projects separated from construction investment projects in accordance with this Circular.

3. Provincial People's Committees, centrally-affiliated cities:

- Direct and implement land clearance work in accordance with the law for land clearance and resettlement projects to implement local investment plans and socio-economic development plans and for land clearance and resettlement projects separated from construction investment projects of central ministries and agencies, entrusting them to provincial people's committees where the projects are located.

- Ensure funding for the implementation of land clearance and resettlement projects within their management scope to implement local investment plans and socio-economic development plans.

- Allocate and use supplementary targeted funds from the central budget for the local budget correctly for the implementation of independent land clearance and resettlement projects separated from construction investment projects of central ministries and agencies.

- Approve or delegate approval of compensation, support, and resettlement schemes; approve or delegate approval of final settlement of capital investment for land clearance and resettlement projects separated from construction investment projects of central ministries and agencies.

- Guide, inspect, and urge project investors under their management to implement investment plans, receive and use investment capital for the correct purposes.

4. District People's Committees, city districts, provincial-level towns (collectively referred to as district-level People's Committees):

- Direct the Compensation, Support, and Resettlement Council to establish and organize the implementation of compensation, support, and resettlement schemes.

- Ensure funding for the implementation of land clearance and resettlement projects within their management scope.

- Guide, inspect, and urge project investors under their management to implement investment plans, receive and use investment capital for the correct purposes.

5. Central ministries and agencies with construction investment projects, where land clearance is separated into land clearance and resettlement projects, entrusted to provincial people's committees for implementation:

- Ensure sufficient funding for provincial people's committees to organize the implementation of land clearance and resettlement projects as components separated from construction investment projects of central ministries and agencies; entrust them to provincial people's committees where the projects are located.

- Direct construction project investors and subordinate agencies to cooperate with localities to promptly monitor and handle cases where land clearance and resettlement costs exceed the costs determined in the construction investment project during implementation; ensure funding or report to the competent authority to ensure funding in cases where land clearance and resettlement costs exceed the costs determined in the construction investment project during implementation to avoid affecting the progress and implementation plans of local land clearance and resettlement projects.

6. Financial authorities at all levels shall manage financial capital investment in land clearance and resettlement projects; State Treasury agencies shall perform the task of controlling payment of capital investment in land clearance and resettlement projects, ensuring timely, full, and accurate payment according to regulations.

VI. Reporting and Inspection System:

Implement in accordance with the provisions of the Ministry of Finance in Circulars guiding the management of payment and final settlement of capital investment for development investment projects and public service investment projects with investment characteristics from state budget capital and the provisions of this Circular.

Part III

IMPLEMENTING PROVISIONS

1. This Circular takes effect fifteen days after its publication in the Official Gazette.

2. During implementation, if there are difficulties, relevant agencies, units, and investors should promptly reflect these issues to the Ministry of Finance for appropriate amendments and supplements.