Circular No. 166/2011/TT-BTC stipulates the management and use of project preparation costs and operating funds of competent state agencies during the management of projects; certain financial indicators of project contracts; conditions and methods of payment to investors implementing projects under Build-Transfer (BT) contracts; final settlement of the value of construction projects implemented under Build-Transfer-Operate (BTO) and Build-Transfer-Operate (BOT) contracts.

CIRCULAR

Regulations on the management and use of project preparation costs and operating fundsof competent state agencies during the process of managing projects;certain financial indicators of project contracts; conditions and methods of payment按照法律规定和国防部的要求进行； for investors implementing projects under the form ofConstruction - Transfer; settlement of the value of construction works carried out under the form oftransfer of enterprise ownership form or restructuring of enterprises. Construction - Operation - Transfer, Construction -Transfer - Operation, Construction - Transfer

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

Pursuant to Decree No. 108/2009/NĐ-CP dated November 27, 2009 of the Government on investment under the forms of Build-Operate-Transfer (BOT) Contract, Build-Transfer-Operation (BTO) Contract, Build-Transfer (BT) Contract; Decree No. 24/2011/NĐ-CP dated April 5, 2011 of the Government amending and supplementing some articles of Decree No. 108/2009/NĐ-CP dated November 27, 2009 on investment under the forms of BOT, BTO, BT Contracts;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance guides certain contents related to the implementation of projects under the forms of BOT, BTO, BT Contracts as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides certain contents related to the implementation of projects under the forms of BOT, BTO, BT Contracts including:

1. Management and use of project preparation costs and operating funds of Competent State Agencies during the management of BOT, BTO, BT projects as stipulated in Decree No. 108/2009/NĐ-CP dated November 27, 2009 of the Government;

2. Certain key financial indicators of project contracts implemented under the forms of BOT, BTO, BT Contracts (hereinafter referred to as Project Contracts);

3. Conditions and methods of payment for Investors implementing BT projects;

4. Settlement of the value of construction works carried out under the forms of BOT, BTO, BT Contracts.

Article 2. Applicability

Investors, Competent State Agencies signing and implementing Project Contracts, relevant agencies, organizations, individuals, enterprises involved in the implementation of projects according to the relevant provisions of the State and the provisions of this Circular.

Chapter II

MANAGEMENT AND USE OF PROJECT PREPARATION COSTS AND OPERATING FUNDS OF COMPETENT STATE AGENCIES

Article 3. Sources of funds for the activities of Competent State Agencies

1. State budget funds balanced in the annual regular expenditure plan of Ministries, sectors, Provincial People's Committees for the state management activities of Competent State Agencies to implement BOT, BTO, BT projects.

2. State budget funds balanced in the annual development investment plan of Ministries, sectors, Provincial People's Committees for costs related to project preparation and implementation, including: preparing and reviewing Feasibility Study Reports or Project Proposals, preparing other Projects, preparing tender documents and organizing tenders for projects with tender selection of Investors, quality inspection of works, site inspection and supervision, and other expenses.

Competent State Agencies establish specialized units or designate subordinate specialized agencies to perform their rights and obligations as prescribed in the Project Contract; at the same time, they are responsible for allocating funds for the specialized unit or specialized agency to perform the assigned rights and obligations.

Article 4. Contents of Expenditure and Revenue of State Administrative Authorities with Competence

The contents of expenditure and revenue of State Administrative Authorities with Competence during the process of managing and implementing BOT, BTO, BT investment projects and to fulfill other obligations include:

1. Contents of expenditure serving state management tasks:

a) Expenditure for establishing and publishing the List of Projects;

b) Expenditure for purchasing office supplies;

c) Communication expenditure;

d) Conference, seminar, negotiation expenditure;

đ) Expenditure for inter-agency working group activities and hiring labor and experts when necessary;

e) Other expenditures.

2. Contents of expenditure for project preparation and project management:

a) Expenditure for hiring consultants to prepare Feasibility Study Reports on Projects or Project Proposals (if applicable) including costs related to preparing other projects and tender documents for selecting investors;

b) Expenditure for organizing bidding to select investors. In cases where there is revenue from selling tender documents, the cost of this work shall be funded from the revenue generated from selling tender documents according to state regulations;

c) Expenditure for sudden quality inspection of works and pre-handover inspections as stipulated in contracts;

d) Expenditure for site inspection and supervision work;

đ) Other expenditures.

3. Contents of revenue of State Administrative Authorities with Competence:

a) Revenue from project preparation costs paid by selected investors (if applicable);

b) Revenue from selling tender documents;

c) Other revenues (if applicable).

Article 5. Establishment, Approval, and Allocation of Budget Estimates for Activities of State Administrative Authorities with Competence

2. In cases where tasks are not implemented according to the plan, or if funds are misused or used contrary to regulations, such tasks shall be suspended, and funds used for improper purposes shall be recovered and remitted to the state treasury as prescribed.

a) The list of projects approved by the competent authority or project proposals outside the approved list that are supplemented into the implementation list;

b) Implementation plans for projects approved by the competent authority;

c) Policies, systems, standards, and norms prescribed by State Administrative Authorities with Competence.

2. Principles for Establishing Budget Estimates:

a) Contents of expenditure already specified in construction investment costs, including expenditure for preparing feasibility study reports on projects or project proposals (if applicable), expenditure for preparing other projects, expenditure for preparing tender documents, and expenditure for quality inspection of works: budget estimates shall be established according to state regulations on establishing construction investment cost budgets;

b) Contents of expenditure serving state management tasks of State Administrative Authorities with Competence, which fall under regular expenditure policies for state agencies, shall be established according to state regulations on establishing regular expenditure budgets from the state budget.

3. Establishment and Execution of Budget Estimates:

a) Annually, based on the time frame for establishing the state budget according to the State Budget Law, State Administrative Authorities with Competence shall establish budget estimates for expenditures to implement the tasks mentioned in Clause 1 and Clause 2 of Article 4 of this Circular, and consolidate them into their annual budget estimates according to each type of funding source for submission to the competent authority for approval;

b) The approval of annual budget estimates of State Administrative Authorities with Competence shall be carried out according to current state regulations for each funding source;

c) Allocation of budget: After the annual budget estimate has been approved by the competent authority, the head of the agency or unit shall be responsible for allocating and assigning the operating funds of State Administrative Authorities with Competence according to the principle of ensuring that specialized departments or units use the funds in accordance with the policies and systems to perform assigned rights and obligations. The approved budget estimate shall be sent to the State Treasury where State Administrative Authorities with Competence have transaction accounts for control and payment;

d) During the execution of the approved budget estimate, if additional projects outside the approved list are added, State Administrative Authorities with Competence shall proceed to request supplementary approval of the budget estimate adjustment according to regulations to carry out the new tasks.

Article 6. Management and Settlement

The management and settlement of costs serving the activities of the authorized state agency shall be carried out in accordance with the current regulations of the State on the management and settlement of development investment capital from the state budget and the management and settlement of regular expenditures for the operation of state agencies.

Article 7. Handling of Revenue of the Authorized State Agency

All revenues generated in the year by the authorized state agency, including revenues from project preparation costs paid by the selected investor (if any) and revenues from unsold tender documents (after expenses for organizing investment according to regulations have been deducted), shall be deposited into the state budget.

Article 8. Final Settlement

1. At the end of the planning year, the Ministries, sectors, and provincial People's Committees shall carry out final settlement of the use of state budget capital for managing the implementation of BOT, BTO, and BT projects in accordance with state regulations; at the same time, they shall settle the investment expenditures implemented by the authorized state agency.

2. For projects implemented under the BTO and BT contract forms, upon completion and handover for use, the authorized state agency shall consolidate the settled annual investment expenditures implemented by the authorized state agency into the final settlement of the completed project in accordance with the regulations of the Ministry of Finance.

Article 9. Inspection of Management and Use of Funds

Annually, periodically or at random, the Ministries, sectors, provincial People's Committees, and financial authorities at all levels shall organize inspections of the management and use of funds for activities within the responsibility of the authorized state agency during the process of managing and implementing BOT, BTO, and BT projects under their jurisdiction to promptly identify and address any violations in the management process of related agencies.

Chapter III

KEY FINANCIAL INDICATORS OF THE PROJECT CONTRACT

Article 10. Shareholder Equity of the Investor

1. The investor must ensure that the shareholder equity ratio of the project enterprise to the total investment capital of the project complies with the provisions of Article 5 of Decree No. 108/2009/NĐ-CP of the Government to participate in implementing the project.

2. The shareholder equity of the project enterprise is the committed capital of the investor according to the charter of the project enterprise. The investor's shareholder equity is determined based on the most recent audited financial report of the investor.

3. In cases where the investor simultaneously implements multiple different projects at the same time, the total shareholder equity must meet the requirements for all projects according to the prescribed ratios.

4. The investor must commit and bear legal responsibility for the accuracy and legality of the data and documents related to shareholder equity, the list of ongoing projects, and the allocation of shareholder equity to ongoing projects at the time of negotiating the project contract.

Article 11. Capital Raised by the Investor

1. To implement the project, in addition to the shareholder equity as stipulated in Decree No. 108/2009/NĐ-CP of the Government, the investor and the project enterprise may raise other legitimate sources of capital to fulfill the contract. These are the sources of capital raised by the investor to implement the project up to the time of negotiating the contract, which have been committed or agreed in writing by the investor and the capital providers.

2. The investor and the project enterprise must raise capital in line with the investment schedule recorded in the project contract and report on the raising of capital to the authorized state agency signing the project contract in accordance with regulations.

3. Indicators regarding the sources of capital raised by the investor:

a) Sources of capital raised (ordinary credit, preferential credit, foreign loans, other sources of capital raised);

b) Total amount of capital raised, the amount raised from each source of capital;

c) Loan period, repayment period, including grace period;

d) Interest rate on loans, average interest rate when borrowing from multiple sources;

đ) Currency of loan and exchange rate for payment;

e) Conditions to ensure sources of capital raised;

f) Other necessary costs related to sources of capital raised: guarantee fees, commitment fees, credit insurance, brokerage fees (if any).

Article 12. Interest on Borrowed Funds for Investment Capital of the Investor

1. The interest on borrowed funds for investment capital of the investor during the construction period of the project shall be included in the total investment cost of the project. The maximum interest calculation period shall not exceed the construction period stipulated in the contract, calculated based on the committed level and progress of borrowing funds according to the contract, but the maximum loan amount of the investor shall be determined by the ratio of capital that must be raised outside the equity capital as prescribed in Article 5 of Decree No. 108/2009/NĐ-CP of the Government.

2. The interest on borrowed funds for investment capital of the investor shall only apply to the portion of capital that the investor must borrow to invest in BOT, BTO, and BT projects; interest on borrowed funds shall not be calculated for the equity capital that the investor must undertake as prescribed.

3. The level of interest on borrowed funds for investment capital shall be determined in the following cases:

a) In the case of tendering to select the investor: The interest rate on borrowed funds for the investor's capital shall be determined based on the winning bid results of the tender documents for the successful bidder;

b) In the case of appointing the investor to negotiate the contract: The reasonable interest rate shall be determined through negotiations between the competent state agency and the investor. The competent state agency shall be responsible for this interest rate;

c) To determine the reasonable interest rate applicable to the project, the competent state agency shall have the responsibility to refer to the following bases:

- The average medium-term lending interest rate of at least three independent credit institutions unrelated to the investor in the locality;

- The reasonable interest rate shall be determined at a maximum of 1.3 times the government bond interest rate with the longest term at the time closest to the contract negotiation time.

Article 13. Profit of the Investor

1. In the case of tendering to select the investor, the profit of the investor shall be determined through the selection results of the successful bidder.

2. In the case of direct appointment: The investor's profit shall be estimated based on the feasibility study report of the project determined according to the principle of ensuring the project's efficiency indicators and the negotiation results between the competent state agency and the investor. The competent state agency shall have the responsibility to refer to the average profit of enterprises operating in the corresponding business sector, profits of similar projects compared to the regional market level, and profits of other industries and sectors to consider proposing a reasonable profit level in the feasibility study report.

3. Specifically, in the case of direct appointment for a project implemented under the BT contract form where the State creates conditions for the investor to implement another project to recover capital and profit, the investor's profit shall be determined from the results of implementing the other project. The establishment and implementation of the other project shall comply with current regulations on project management and construction.

Article 14. Other Financial Indicators

In addition to the financial indicators mentioned above, the competent state management agency may prescribe additional necessary financial indicators but must ensure the most effective investment operation. Other financial indicators such as debt-to-equity ratio, receivables, payables, and capital preservation measures shall be implemented in accordance with current laws.

Chapter IV

||| PAYMENT CONDITIONS AND METHODSTO THE INVESTOR IMPLEMENTING THE BT PROJECT

||| Article 15. Payment Conditions for Projects Implemented under the BT Contract Form

||| 1. Projects implemented under the BT Contract form must be invested in construction, completed, and handed over according to the commitments recorded in the Project Contract.

||| 2. Payment conditions are stipulated in the Project Contract. The competent state agency may pay the Investor once or multiple times the value of the Project Contract but the first payment time shall be carried out after the completion, acceptance, and handover of the BT project; the final payment value shall be at least 15% of the Project Contract value.

||| 3. In cases where the BT Contract is paid in multiple installments, the Final Settlement Report of the Project Contract must be approved before the final payment.

||| 4. The plan on sources of investment capital for paying the projects implemented under the BT Contract form decided by the competent state agency shall be allocated into the annual investment capital plan of the competent state agency for payment in cases of payment in cash.

||| Article 16. Payment of the BT Contract

1. Payment Documents

||| The project enterprise must submit to the payment control agency the basic documents of the project (originals or certified true copies and only sent once until the end unless there is supplementation or adjustment), including:

||| a) Decision of the competent authority regarding the implementation of the project under the BT Contract; regarding the selection of the Investor through bidding or direct award; decision on payment method by money or another Project;

||| b) Decision of the competent authority regarding the transfer of another Project, approval of the value of another Project for cases of payment by another Project;

||| c) Project Contract between the Competent State Authority and the Investor;

||| d) Acceptance Record of the completed and handed over BT project.

||| 2. Payment of the Project Contract in cash

||| a) Application for one-time payment in cash after the BT project is completed and handed over:

||| - Acceptance Record of the completed and handed over BT project according to the progress committed in the Project Contract;

||| - Determination Record of the value of additional work outside the contract approved by the Competent State Authority (if any);

||| - Payment application of the Competent State Authority: Value of the contract proposed for payment; value of additional work (if any); proposed payment value;

||| - Final Settlement Report of the completed Project Contract;

||| - Audit Report on the Final Settlement Report of the completed Project Contract;

||| - Approval of the final settlement of the completed Project Contract approved by the competent authority.

||| b) In case of multiple payments:

||| - Acceptance Record of the completed and handed over BT project according to the progress committed in the Project Contract;

||| - Determination Record of the value of additional work outside the contract approved by the Competent State Authority (if any);

||| - Payment application of the Competent State Authority;

||| - For the final payment, the payment file is supplemented with the Final Settlement Report of the completed BT project approved by the competent authority, and the Final Settlement Report of the completed Project Contract.

||| c) Payment Method:

||| - After completing the BT Project Contract, the Competent State Authority pays the Investor and the Project Enterprise the full contract value and any additional amounts outside the contract (if any). In cases of multiple payments, the payment schedule follows the commitment in the Project Contract. The final payment shall be at least 15% of the contract value and shall be made after the final settlement contract is approved;

||| - Within seven days from the date of receiving all documents as prescribed by the Competent State Authority, the State Treasury will base on the payment terms in the contract, check and carry out one-time or multiple payments according to the payment conditions and the proposed payment value. The Competent State Authority is responsible for the accuracy and legality of the Project Contract payment value and the quality of the handed-over project. The State Treasury does not bear responsibility for this content.

||| 3. Payment of the BT Contract by transferring another Project:

||| a) Payment Principle:

||| - In principle: According to Clause 3, Article 2 of Decree No. 108/2009/ND-CP dated November 27, 2009 of the Government, after constructing the BT project, the Investor transfers the project to the State, and the Competent State Authority pays the Investor by another Project. The payment is carried out according to the following regulations:

||| + Payment is carried out through the offset principle between the value of the BT project and the value of the other Project transferred to the Investor by the Competent State Authority;

||| + The value of the other Project is determined and approved by the competent authority according to relevant laws;

||| + The payment time is after the completion of the BT Project Contract, and the Competent State Authority officially decides to transfer the other Project to the Investor.

||| - In cases where the Competent State Authority decides to temporarily transfer another Project to the Investor before the BT project is completed and handed over for planning work, compensation and land clearance work, and determining the value of the other Project, it must be reviewed and decided by the Minister; head of agencies equivalent to ministries, government agencies; Chairman of the People's Committee of provinces and centrally-administered cities. In this case, the Competent State Authority and the Investor must calculate the payment conditions to ensure the interests of the State and the Investor, ensuring that the total investment cost of the BT project has been approved by the competent authority (except for adjustments according to the law on construction investment).

b) Payment documents:

||| - Contract between the Competent State Authority and the Investor;

||| - Determination Record of the completed BT Project Contract according to the progress committed in the contract;

||| - Determination Record of the value of additional work outside the contract approved by the Competent State Authority (if any);

||| - Decision of the competent authority approving the value of the other Project.

||| c) Payment of the Project Contract:

- The competent state agency sends the settlement file of the BT project to the State Treasury Agency for expenditure control. Within seven days, the State Treasury Agency, based on the file submitted by the competent state agency for inspection, shall confirm the value of the completed construction volume proposed for payment that meets the required documentation and procedures. The competent state agency, based on the confirmation of the value of the construction volume eligible for payment by the State Treasury Agency, shall make payments to the Investor through another Project.

- The competent state agency compiles and monitors the amount of capital already paid to the Investor, periodically reporting quarterly and annually to the local financial agency for tracking, verification, and accounting of payments made through the value of another Project.

4. Accounting and management of payments for the BT Project Contract

a) After the decision approving the value of another Project and the decision assigning the Investor to implement another Project, the local financial agency, based on the nature of another Project, shall record revenue from another Project into the local budget and record expenditures for investment capital. In cases where the value of the BT Project or the value of another Project has not been clearly determined, provisional recording of income and expenses may be carried out. Once the accurate value of the project is determined, formal recording of income and expenses will be calculated.

b) At the end of each fiscal year of the state (January 31 each year), based on the notification from the competent state agency regarding the cumulative amount of capital paid for the Project Contract during the year, confirmed by the State Treasury Agency, the local financial agency shall process the transfer of remaining funds (if any) to the next year for continued payment under the BT Project Contract.

c) After finalizing the settlement of the Contract, if the value of another Project paid to the Investor exceeds the value of the BT Project Contract and the additional costs outside the contract approved by the competent state agency, the Investor must pay the difference in cash into the state budget. For the additional contract value due to other reasons not within the scope of the BT contract commitment, the Investor shall ensure their own funding sources to cover the payment. If the value of another Project paid to the Investor is less than the value of the BT Project Contract and the additional costs outside the contract approved by the competent state agency, the state budget shall pay the difference in cash to the Investor or supplement with another Project.

Chapter V

SETTLEMENT OF INVESTMENT PROJECTS UNDER THE FORM OFBOT, BTO AND BT CONTRACTS

Article 17. Settlement of investment projects under the forms of BOT, BTO, and BT includes:

1. Costs implemented by state agencies: The state agency assigned the responsibility shall prepare the settlement report for all costs related to the preparation, review, and feasibility study report of the project or project proposal (if applicable), costs related to preparing another Project, and other costs associated with managing the implementation of the project to submit to the competent authority for examination and approval.

2. Settlement of the value of the completed BOT, BTO, and BT Contracts: The Investor is responsible for preparing the settlement file for all cost items agreed upon in the Project Contract and in compliance with laws on investment and construction, to submit to the competent state agency for examination and approval for BTO and BT Contracts, and for examination and agreement for BOT Contracts.

3. The settlement value of the Project Contract is the total value of the Project Contract signed by the competent state agency and the Investor in accordance with the provisions of laws on investment and construction.

Article 18. Settlement of the value of BOT, BTO, BT contracts.

1. For BOT contracts:

- The competent state agency shall negotiate with the Investor on selecting an independent auditing organization with capability and experience to audit the contents of construction investment costs and other costs under the signed project contract.

- Based on the audit value, the competent state agency shall review and approve the settlement report of the contract project value.

2. For BT, BTO contracts:

- The competent state agency shall negotiate with the Investor on selecting an independent auditing organization with capability and experience to audit the contents of construction investment costs and other costs under the signed project contract.

- The competent state agency shall examine and approve similarly to projects funded by state budget funds.

Article 19. Settlement Documents

1. Settlement documents for costs implemented by state agencies:

- A consolidated statement proposing the settlement value, including all completed cost items.

- A set of relevant legal documents (originals or certified true copies).

- Consulting contracts (if any), accompanied by acceptance certificates, completed products, and contract settlement reports (originals).

- Relevant payment documents and vouchers (originals or certified true copies).

2. Settlement documents for BOT, BTO, BT contracts:

- Investor's proposal requesting agreement or approval of the settlement;

- Project contract;

- Appendices, documents, and materials attached to the project contract;

- Other relevant documents and invoices.

Chapter VI

IMPLEMENTING PROVISIONS

Article 20. Effective Date

This Circular takes effect from January 15, 2012, and replaces Circular No. 149/2007/TT-BTC dated December 14, 2007, issued by the Ministry of Finance guiding the management and use of state budget funds for activities of competent state agencies during the management of BOT, BTO, BT project investments.

Article 21. Transitional Provisions

1. For project contracts currently being negotiated but not yet signed, the competent state agency shall base on the provisions of this Circular to review, adjust, and update related clauses in the project contract.

2. For project contracts signed before the effective date of this Circular, they shall continue to be implemented according to the signed project contract.

3. For other cases, ministries, sectors, and provincial People's Committees shall notify the Ministry of Finance in writing for research and guidance./.