Circular No. 136/2007/TT-BTC guides financial management, plan allocation, and settlement of economic public service funds for state-owned companies performing public welfare tasks in the national railway management and maintenance sector funded by the State.

CIRCULAR

Guidelines for financial management, plan allocation, and settlement of funds for state-owned companies performing public service tasks in the national railway management and maintenance sector funded by the State.

____________________________

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

Pursuant to Decree No. 109/2006/NĐ-CP dated September 22, 2006 of the Government detailing and guiding the implementation of certain provisions of the Railway Law;

Pursuant to Decision No. 216/2003/QĐ-TTg dated October 27, 2003 of the Prime Minister approving the Charter of Organization and Operation of Vietnam Railway Corporation;

Pursuant to Decision No. 256/2006/QĐ-TTg dated November 9, 2006 of the Prime Minister promulgating the Procurement Regulations for ordering, allocating plans for production and supply of public goods and services;

Pursuant to Decision No. 84/2007/QĐ-TTg dated June 11, 2007 of the Prime Minister regarding the method and level of collecting fees and rental prices for the use of national railways invested by the State;

After receiving comments from the Ministry of Planning and Investment (document No. 347 BKH/KCHT&ĐT dated January 16, 2007) and the Ministry of Transport (document No. 460/BGTVT-TC dated January 25, 2007), the Ministry of Finance hereby issues guidelines for financial management, plan allocation, and settlement of funds for state-owned companies performing public service tasks in the national railway management and maintenance sector funded by the State as follows:

I. GENERAL PROVISIONS

1. Scope of application:

Vietnam Railway Corporation and railway management companies, railway signaling information companies (referred to as railway infrastructure management companies) were established pursuant to Decision No. 34/2003/QĐ-TTg dated March 4, 2003 of the Prime Minister.

2. The annual management and maintenance objects are assets belonging to the national railway infrastructure system funded by the State and entrusted to Vietnam Railway Corporation for management and operation, including:

2.1. Bridge, culvert, tunnel systems of various types.

2.2. Railways: mainline railways, station railways, freight yard railways, cargo handling railways, road sections leading to stations, road sections leading to freight yards, retaining walls, drainage systems, retaining walls, marker post systems, locomotive and car operation facilities, and other necessary auxiliary facilities for train operations.

2.3. Information and signal equipment systems: Entry and exit signals at stations, signal cable systems, communication cable systems, train control devices, centralized control and command systems, transmission line systems, power supply systems, switchboard stations, signal and communication duty houses, power supply systems.

2.4. Architectural systems: Passenger waiting rooms, ticket sales houses, luggage and cargo storage houses, station squares, platforms, station area fences, wing walls, freight yards, guard posts, barrier guard posts, bridge guard posts, tunnel guard posts, road sections leading to stations, road sections leading to freight yards, crossing barriers.

These assets are not subject to basic depreciation but are monitored for wear and tear according to Clause 2 of Article 9 of the Fixed Asset Management, Usage, and Depreciation Regulations issued together with Decision No. 206/2003/QĐ-BTC dated December 12, 2003 of the Minister of Finance.

3. Tasks of managing and maintaining the national railway infrastructure funded by the State include:

3.1. Regular maintenance and minor repair tasks.

3.2. Major repair tasks.

3.3. Tasks of restoring damages caused by accidents, natural disasters, and traffic accidents.

4. Vietnam Railway Corporation and railway infrastructure management companies are provided by the State with capital, assets (including assets for management and maintenance tasks, national railway infrastructure assets), and necessary human resources to perform management and maintenance tasks ensuring safe and uninterrupted railway transportation according to technological processes and economic-technical norms for managing and maintaining the national railway infrastructure funded by the State as stipulated by the Minister of Transport.

5. Vietnam Railway Corporation and railway infrastructure management companies are exempted from land rental fees for areas used for constructing railway lines, including railbeds, bridges, culverts, retaining walls, drainage systems, information and signal systems, power supply systems, tunnel floors, entire areas for building railway stations, locomotive and car operation facilities, and other necessary auxiliary facilities for organizing train operations on the line. In cases where Vietnam Railway Corporation and railway infrastructure management companies use these areas for business services, they must pay land rental fees according to the law.

6. In addition to performing public service tasks assigned by the State, Vietnam Railway Corporation and railway infrastructure management companies may utilize land, scenery, State capital, and assets under their management to organize business activities in accordance with State laws without affecting the public service tasks assigned by the State.

II. ESTABLISHING AND ALLOCATING PLANS FOR SUPPLYING PRODUCTS FOR THE MANAGEMENT AND MAINTENANCE OF NATIONAL RAILWAY INFRASTRUCTURE FUNDED BY THE STATE

1. Plan establishment.

Annually, based on the technical condition of the railway infrastructure and transport demand on each operational route, technological processes, economic-technical norms, and current State regulations, railway infrastructure management companies establish plans for management and maintenance funding on the principle of prioritizing regular maintenance to ensure safe train operations, report to Vietnam Railway Corporation for review and approval, and submit to the Ministry of Transport. The Ministry of Transport compiles these plans concurrently with the annual State budget estimate, sends them to the Ministry of Finance for review and compilation, and submits them to the competent authority for decision-making.

2. Plan allocation.

Based on the State budget revenue and expenditure estimates allocated by the Prime Minister, the Ministry of Finance notifies, and the Ministry of Transport allocates public service tasks to Vietnam Railway Corporation while sending the Ministry of Finance for monitoring and supervision.

After being assigned tasks, Vietnam Railway Corporation organizes the allocation of plans to railway infrastructure management companies, compiles and sends them to the Ministry of Transport for management and supervision; sends them to the Ministry of Finance and the Central Treasury for the basis of fund settlement according to the provisions of the State Budget Law and related guidance documents.

The Ministry of Transport and Vietnam Railway Corporation shall complete the plan allocation before December 31 of the preceding year.

3. The content of the plan allocation from the Ministry of Transport to Vietnam Railway Corporation (as attached in Appendix 1 of this Circular) includes:

3.1. Tasks for regular maintenance and medium repairs:

a) Name of public utility product;

b) Quantity;

c) Quality;

d) Completion time;

d) Cost.

3.2. Tasks for major repairs:

a) List of projects;

b) Quantity;

c) Quality;

d) Completion time;

d) Cost.

3.3. Reserve fund from 1% to 2% of the total state budget estimate allocated for implementing tasks to address emergencies, natural disasters, and traffic accidents.

3.4. The total amount of state subsidy provided to establish a bonus and welfare fund in cases where railway infrastructure management companies do not have sufficient profit to set up such funds as prescribed.

4. The content of the plan allocation from Vietnam Railway Corporation to railway infrastructure management companies (as attached in Appendix 2 of this Circular) includes:

4.1. Tasks for regular maintenance and medium repairs:

a) Name of public utility product;

b) Quantity;

c) Unit price approved by Vietnam Railway Corporation;

d) Quality;

e) Time of completion;

f) Cost.

4.2. Tasks for addressing aftermaths of emergencies, natural disasters, and traffic accidents.

4.3. The amount of state subsidy provided to establish a bonus and welfare fund in cases where the company does not have sufficient profit to set up such funds as prescribed.

5. For major repair tasks.

Based on the assigned plan, Vietnam Railway Corporation implements the tasks through bidding. The procedures and formalities for implementation shall be carried out in accordance with the provisions of Decision No. 256/2006/QĐ-TTg dated November 9, 2006, issued by the Prime Minister on the Procurement Regulations, Ordering, and Plan Allocation for Production and Supply of Public Utility Products and Services, and other relevant laws on procurement.

6. In cases where aftermaths of emergencies, natural disasters, and traffic accidents need to be addressed due to reasons beyond the planned scope, Vietnam Railway Corporation has the responsibility to direct units to address them according to current regulations and use the reserve fund to cover the costs. If there is still a shortage, it shall report to the Ministry of Transport and the Ministry of Finance for consideration and resolution.

7. Plan adjustment.

In cases where plan adjustments change the tasks assigned by the Ministry of Transport, Vietnam Railway Corporation shall report to the Ministry of Transport for review. The Ministry of Transport shall decide on the plan adjustment and send it to the Ministry of Finance for monitoring and supervision. In cases where the plan adjustments do not change the tasks assigned by the Ministry of Transport, Vietnam Railway Corporation shall make the decision and send the adjusted plan to the Ministry of Transport and the Ministry of Finance for monitoring and supervision.

8. Product acceptance work.

Vietnam Railway Corporation shall organize the acceptance of quantity and quality of railway public utility products in accordance with current regulations.

III. PAYMENT PROCEDURES FOR THE MANAGEMENT AND MAINTENANCE OF NATIONAL RAILWAY INFRASTRUCTURE FUNDED BY THE STATE

1. The Ministry of Transport and Vietnam Railway Corporation shall be responsible for submitting the plan allocation for public utility tasks to the Ministry of Finance and State Treasury for control, issuance, and payment in accordance with the current provisions of the State Budget Law and related guiding documents.

Economic enterprise capital payments shall be made in the form of notification of capital levels. Based on the allocated budget estimates, the Ministry of Finance shall notify the economic enterprise capital level for the annual budget to the Central State Treasury to notify the capital to transaction treasuries. Based on the temporary advance and payment requests of Vietnam Railway Corporation, transaction treasuries shall implement temporary advances and payments to participating units involved in railway repair and maintenance.

Vietnam Railway Corporation shall implement within the allocated budget estimates, without exceeding the volume leading to exceeding the state budget's payment capacity.

2. Payment documents for regular maintenance and medium repairs include:

2.1. Decision allocating the plan from the Ministry of Transport to Vietnam Railway Corporation.

2.2. Decision allocating the plan from Vietnam Railway Corporation to railway infrastructure management companies.

2.3. Table determining the value of completed work volume by Vietnam Railway Corporation.

3. Payment documents for major repairs.

3.1. Decision allocating the major repair plan from the Ministry of Transport to Vietnam Railway Corporation.

3.2. Decision approving the project or technical-economic report; design and budget by the competent authority.

3.3. Tender selection document in accordance with the Procurement Law.

3.4. Economic contract.

3.5. Table determining the value of completed work volume by Vietnam Railway Corporation.

4. Application documents for subsidies to establish bonus and welfare funds (only applicable to railway infrastructure management companies):

4.1. Report detailing the company's distribution and establishment of funds from post-tax profits..

4.2. Report on the implementation of assigned tasks and plans.

4.3. Audited financial report of the company (year requesting subsidy).

4.4. Other related documentation and vouchers.

5. For provisional payments: Provisional payments shall be made in accordance with the provisions of Circular No. 130/2007/TT-BTC dated November 2, 2007, amending and supplementing certain points of Circular No. 27/2007/TT-BTC dated April 3, 2007, issued by the Ministry of Finance on the management and payment of investment capital and economic enterprise capital with investment characteristics from state budget funds.

IV. MANAGEMENT AND USE OF CAPITAL, ASSETS, ESTABLISHMENT OF BONUS AND WELFARE FUNDS FOR RAILWAY INFRASTRUCTURE MANAGEMENT COMPANIES.

1. Railway infrastructure management companies must concentrate capital and resources to manage and maintain the national railway system. When necessary, the Board of Directors of Vietnam Railway Corporation may adjust capital and assets between railway infrastructure management companies in the form of increased or decreased capital but without affecting the implementation of public utility tasks of the company whose capital is being adjusted.

2. The investment of capital outside the company, the sale and liquidation of assets directly serving public services shall be decided by the Board of Directors of Vietnam Railway Corporation.

3. For assets belonging to the railway infrastructure system: The sale and liquidation shall be decided by Vietnam Railway Corporation after obtaining a written consensus from the Ministry of Transport. After liquidation and sale, based on the remaining value, railway infrastructure management companies shall record a reduction in the source of funds forming the asset.

4. All materials replaced during the management and maintenance of railway infrastructure shall be recovered, classified, evaluated, and procedures for warehousing shall be completed by railway infrastructure management companies after obtaining a written consensus from Vietnam Railway Corporation.

5. Vietnam Railway Corporation shall stipulate the cost standards for recovering materials and assets belonging to the railway infrastructure system.

6. The liquidation and sale of assets and recovered materials shall be carried out in accordance with current regulations. Annually, Vietnam Railway Corporation shall organize inspections of the recovery, liquidation, and sale of such assets and materials, report to relevant state agencies to have a basis for preparing the budget for the following year.

7. Railway transport business companies and railway infrastructure management companies shall be responsible for remitting to the central budget the entire amount of fees for using railway infrastructure, twenty percent of the rental income from railway infrastructure according to regulations, and the proceeds from the sale and liquidation of assets and recovered materials belonging to the railway infrastructure system after deducting recovery costs, which are allocated in the annual budget for managing, maintaining, and repairing the national railway system invested by the State in accordance with the State Budget Law.

8. Profit distribution shall be carried out in accordance with current regulations. In cases where railway infrastructure management companies fail to allocate two months' actual salary to the reward and welfare fund, the following measures shall be taken:

If the profit is low, the company may reduce the allocation to the development investment fund and reduce the portion of profit distributed according to state capital to ensure two months' salary for the reward and welfare fund. If reducing the entire amount above still does not meet the requirement of two months' salary for the reward and welfare fund, the State will consider providing assistance. Depending on the budget capacity, the State will balance to provide assistance to railway infrastructure management companies.

V. INSPECTION AND SETTLEMENT OF PRODUCTS OF MANAGEMENT AND MAINTENANCE OF THE NATIONAL RAILWAY INFRASTRUCTURE SYSTEM INVESTED BY THE STATE.

1. Annually, railway infrastructure management companies shall prepare reports on the settlement of public service products assigned to them, which Vietnam Railway Corporation shall consolidate and submit to the Ministry of Transport and the Ministry of Finance.

The Ministry of Transport shall take the lead and coordinate with the Ministry of Finance to organize inspections and settlements of public service products for Vietnam Railway Corporation and railway infrastructure management companies.

Expenditures exceeding the standard, unplanned expenditures, and expenditures not in accordance with regulations must be accounted for and recovered and submitted to the state budget; at the same time, the person who issues incorrect expenditure orders shall compensate the public treasury and bear responsibility in accordance with the provisions of the law.

2. Vietnam Railway Corporation shall be responsible for preparing and submitting reports on the settlement of allocated funds in accordance with the current provisions of the State Budget Law. Settlement reports on allocated funds must be confirmed by local Treasury Departments. The submission time for the report shall comply with the provisions of the State Budget Law.

3. Annually, railway infrastructure management companies must conduct independent audits of their annual financial statements and be subject to financial inspection, supervision, and oversight of financial management activities in accordance with the law.

4. In cases where Vietnam Railway Corporation and railway infrastructure management companies fail to submit settlement reports on time, in addition to being subject to administrative penalties in accounting and statistics in accordance with the provisions, the financial authority will temporarily suspend or request the Treasury Department to temporarily suspend funding until the unit submits complete settlement reports (except for urgent expenses such as salaries and allowances as prescribed).

5. In cases where Vietnam Railway Corporation and railway infrastructure management companies fail to achieve assigned targets, the General Director and directors of these companies shall be responsible in accordance with Clause 8, Article 34 of the Financial Management Regulations for State-Owned Enterprises and State Capital Investment in Other Enterprises issued together with Decree No. 199/2004/NĐ-CP dated December 3, 2004 of the Government.

6. The General Director of Vietnam Railway Corporation and the directors of railway infrastructure management companies shall be responsible before the State and the law for the accuracy and truthfulness of the reported data.

VI. IMPLEMENTATION

1. In addition to the provisions of this Circular, Vietnam Railway Corporation and railway infrastructure management companies must also comply with other legal provisions applicable to state-owned enterprises.

2. This Circular shall take effect from January 1, 2008, replacing Joint Circular No. 161/1998/TTLT/TC-GTVT dated December 16, 1998 of the Ministry of Finance and the Ministry of Transport guiding the financial management system and payment issuance system for state-owned enterprises operating public services in the field of railway infrastructure management and repair.

3. During implementation, if there are difficulties, Vietnam Railway Corporation and related units shall aggregate and report to the Ministry of Finance for research and appropriate amendments and supplements./.