Directive No. 14/CT-TTg on Strengthening Management of Investment and Handling of Arrears in Construction from State Budget Sources and Government Bonds

DIRECTIVEDIRECTIVE

On Strengthening Management of Investment and Handling of Arrears in Construction Projects from State Budget and Government Bonds

from the state budget, government bonds

Implementing the Resolutions of the National Assembly, the Government, and the directives of the Prime Minister, in recent times, various levels and sectors have made significant efforts to improve management work, restructure investment from the state budget and government bonds towards more focused and effective results, reducing the situation of arrears in construction projects. However, there are still cases where many projects are approved beyond the financial capacity, leading to scattered capital allocation, prolonged construction periods, causing waste and loss. Arrears in construction projects have not been thoroughly resolved.

The current situation has and continues to negatively impact public debt safety and sustainable economic growth. In 2013 and subsequent years, the forecast for state budget revenue remains difficult, making it hard for state budget and government bond funds to meet the demand for completing ongoing projects of ministries, sectors, and localities.

To ensure national financial security, enhance the effectiveness of state budget and government bond fund investments, the Prime Minister requests that ministers, heads of ministerial-level agencies, central agencies, chairpersons of provincial People's Committees under the central government, chairpersons of boards of directors of state-owned economic groups and corporations continue to strictly direct and implement the provisions of Directive No. 1792/CT-TTg dated October 15, 2011 of the Prime Minister on strengthening management of investment from state budget and government bond funds, and Directive No. 27/CT-TTg dated October 10, 2012 on key measures to address arrears in construction projects at localities; while focusing on implementing the following tasks and solutions:

I. STRICT CONTROL OF THE ESTABLISHMENT, REVIEW, AND APPROVAL OF INVESTMENT PROJECTS USING STATE BUDGET AND GOVERNMENT BOND FUNDS

1. Regarding the responsibilities of ministries, sectors, and localities

a) Rectify and strengthen the responsibility of agencies responsible for establishing, reviewing, and approving investment projects within their jurisdiction. For new projects, authorities at all levels must strictly control the scope and scale of each project according to the approved objectives, fields, and programs; only approve investment decisions when clear sources of funding and financial balance capabilities at each level of the budget have been determined. For projects already reviewed by the Ministry of Planning and Investment regarding funding sources, only approve central government budget investment decisions according to the reviewed funding amounts.

b) Adjustments increasing the total investment amount of ongoing projects allocated state budget and government bond funds shall be implemented as follows:

- For projects whose investment decisions were approved or adjusted before Decree No. 83/2009/ND-CP dated October 15, 2009 of the Government on amending and supplementing certain articles of Decree No. 12/2009/ND-CP dated February 12, 2009 of the Government on managing construction investment projects took effect: Review investment contents suitable with the financial balancing capability within the management scope of their own budget level.

- For projects whose investment decisions were approved or adjusted after the above decree took effect: Review investment contents, cut unnecessary costs and items based on the principle of ensuring the main objectives of the project and investment efficiency to reduce investment costs and ensure compliance with the approved total investment amount. After applying these solutions, if the project still needs to increase its total investment due to fluctuations in raw material prices, salary policies, and land clearance costs, based on the priority order of project implementation, the authority with investment decision-making power will consider stopping non-urgent and inefficient projects to focus funds on urgent and highly efficient ones. Within their own budget balancing capability, the authority with investment decision-making power will consider and decide on project adjustments.

- Project adjustments must ensure investment efficiency, investment objectives, financial balancing capability, and timely completion of the project.

- Clarify the reasons and responsibilities of organizations and individuals involved in establishing, reviewing, and approving investment projects leading to unauthorized increases in total investment amounts.

- Be responsible for allocating local state budget funds and mobilizing other sources of funds to implement projects for the increased total investment amount compared to the initial investment decision or subsequent adjustment decisions as stipulated in the Prime Minister’s investment plan allocation decisions.

c) For projects that can change their investment form according to the spirit of Directive No. 1792/CT-TTg dated October 15, 2011 of the Prime Minister: The authority with investment decision-making power will review investment contents and reapprove projects according to current regulations in line with new legal provisions for the new investment form.

d) Strengthen supervision, inspection, and auditing of project establishment, review, and approval.

2. The Ministry of Planning and Investment shall take the lead and coordinate with relevant ministries and sectors:

a) Strictly control and review funding sources and total funding amounts for projects allocated from the central state budget. For new projects, allocate central government budget funds only for projects whose investment decisions have been approved according to the funding amounts reviewed by the Ministry of Planning and Investment.

b) Guide the assignment of tasks to localities to organize the review of funding sources for projects using central government budget funds that have been assigned capital plans by the Prime Minister up to the 2013 plan but require an increase in total investment. The Central Government budget will only support the level of capital according to the ratio specified in Decision No. 60/2010/QĐ-TTg dated September 30, 2010 of the Prime Minister based on the initial total investment amount or the total investment amount as stipulated in the decisions on investment as provided in the Prime Minister's decisions assigning the capital plan.

c) Guide the assignment of tasks to localities to organize the review of funding sources for projects using government bond funds that have increased the total investment amount compared to the investment decisions stipulated in the Prime Minister's decisions assigning the government bond capital plan for the period 2012-2015. Projects that have been assigned government bond capital plans for the period 2012-2015 shall be implemented according to the assigned capital plan.

d) Guide ministries, sectors, and localities regarding the balancing of local government budget funds or mobilizing other sources of funds to implement the adjustment of increased total investment amounts for projects currently being invested from central government budget funds and government bonds mentioned above, including projects that have been reviewed for funding sources by the Ministry of Planning and Investment for the adjustment of increased total investment amounts before the issuance of this Directive.

đ) Take the lead and coordinate with the Ministry of Finance to compile and propose solutions to the Prime Minister for handling projects that approved investment decisions before the issuance of Directive No. 1792/CT-TTg dated October 15, 2011, although they did not increase the total investment amount, but received support from the central government budget, but now it is very difficult to allocate sufficient support from the central government budget.

II. STRENGTHEN MANAGEMENT WORK TO MINIMIZE THE BUILDING OF LONG-STANDING DEBT

1. Ministries, sectors, and localities:

a) Report the situation of long-standing construction debt as of June 30, 2013, and measures to handle long-standing debt in the future to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and reporting to the Prime Minister.

b) Review and clearly identify the responsibility of each level and each agency (linked to individual responsibility) for the occurrence of long-standing construction debt in the past period. At the same time, must balance their own sources of funds to resolve the issue of long-standing construction debt.

c) Projects that have been decided on investment must be implemented according to the allocated capital plan.

d) Do not request enterprises to advance capital to implement projects when they have not been allocated capital, leading to the occurrence of long-standing construction debt.

đ) Only organize the selection of contractors for packages that have been allocated capital. For completed and handed over packages, organize acceptance and settlement according to the signed contract as stipulated in Article 58 and Article 59 of the Public Procurement Law, avoiding arrears and misappropriation of contractor funds.

e) Establish and adjust public procurement plans according to the progress and capital allocation plan of each project as stipulated in Article 6 of the Public Procurement Law and Clause 3, Article 10 of Decree No. 85/2009/NĐ-CP dated October 15, 2009 of the Government guiding the implementation of the Public Procurement Law and the selection of construction contractors under the Construction Law.

g) Do not use local government loan funds to allocate for new projects that have not yet determined or reviewed the source of funds for repayment.

2. The Ministry of Planning and Investment takes the lead and coordinates with the Ministry of Finance:

a) Guide ministries, sectors, and localities to resolve the issue of long-standing construction debt.

b) Regularly report annually on the situation of long-standing construction debt and consolidate and submit to the Prime Minister, clarifying the responsibility of individuals and entities causing long-standing construction debt.

c) Do not allocate central government budget funds, including annual plan funds, advance funds for the next year, central government reserve funds, and other central government budget funds for new projects that have not been reviewed for funding sources; approve investment decisions not in accordance with the funding review documents of the Ministry of Planning and Investment and projects carried over that adjust the total investment amount as stipulated in sub-clauses b, c, point 2, section I above.

III. IMPLEMENTATION

1. Ministers, heads of ministerial-level agencies, agencies under the Government, and other central agencies, Chairmen of Provincial People's Committees directly under the Central Government, Chairmen of Councils of Members of Economic Groups and State-owned Corporations shall promptly organize the implementation based on their functions, tasks, and provisions in this Directive to ensure that no long-standing construction debt is generated, and effectively utilize state budget funds and government bonds.

2. Inspection agencies:

a) Strengthen inspection and audit work on the establishment, review, approval, allocation, and use of state budget funds and government bonds; focusing on auditing the approval and adjustment of total investment amounts, construction investment debt, especially projects with large changes in total investment amounts.

b) Organize the public announcement of inspection and audit conclusions; strictly follow up and inspect the implementation of inspection and audit conclusions according to the law; propose to the Government to impose strict penalties for violations in managing and using development investment funds from the state budget and government bonds.

3. The Ministry of Planning and Investment is responsible for guiding, monitoring, urging implementation, and reporting every six months to the Prime Minister on the implementation of this Directive.