Circular No. 178/2014/TT-BTC guides certain contents regarding finance when implementing bidding, ordering, and assigning plans to units responsible for managing and operating water conservancy works.

CIRCULAR

||| Guidelines on certain financial matters when conducting procurement, ordering, and assigning plans for units responsible for managing and operating waterworks projects.

||| Conducting procurement, ordering, and assigning plans for units responsible for managing and operating waterworks projects.

||| For units tasked with managing and operating waterworks projects.

________________

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

||| Pursuant to Decree No. 143/2003/ND-CP dated November 28, 2003 of the Government detailing the implementation of certain provisions of the Ordinance on Waterworks Project Operation and Protection (hereinafter referred to as Decree No. 143/2003/ND-CP);

||| Pursuant to Decree No. 67/2012/ND-CP dated September 10, 2012 of the Government amending and supplementing certain articles of Decree No. 143/2003/ND-CP dated November 28, 2003 of the Government detailing the implementation of certain provisions of the Ordinance on Waterworks Project Operation and Protection (hereinafter referred to as Decree No. 67/2012/ND-CP);

||| Pursuant to Decree No. 71/2013/ND-CP dated July 11, 2013 of the Government on state capital investment in enterprises and financial management of enterprises wholly owned by the State (hereinafter referred to as Decree No. 71/2013/ND-CP);

||| Pursuant to Decree No. 130/2013/ND-CP dated October 16, 2013 of the Government on production and supply of public goods and services (hereinafter referred to as Decree No. 130/2013/ND-CP);

At the proposal of the Director of the Enterprise Finance Department,

||| The Minister of Finance issues this Circular guiding certain financial matters when conducting procurement, ordering, and assigning plans for units responsible for managing and operating waterworks projects.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

||| This Circular stipulates the procurement, ordering, and assignment of plans for implementing the management and operation of waterworks projects (irrigation, drainage, water supply) according to Decree No. 67/2012/ND-CP.

Article 2. Applicability

||| This Circular applies to enterprises under all economic sectors, cooperative organizations using water that have registered business operations in accordance with the law, organizations and individuals legally registered to engage in activities related to the management and operation of waterworks projects (hereinafter referred to as water management units), agencies, and organizations related to the management and operation of waterworks projects.

||| Article 3. Agencies organizing procurement, ordering, and assigning plans for the management and operation of waterworks projects

1. ||| The Ministry of Agriculture and Rural Development decides on the method of organizing procurement, ordering, and assigning plans for central units managing and operating waterworks projects within the central budget and assigns these tasks to subordinate units to implement in accordance with regulations.

2. ||| Provincial People's Committees (hereinafter referred to as Provincial People's Committee) decide on the method of organizing procurement, ordering, and assigning plans for local units managing and operating waterworks projects and assign these tasks to subordinate units to implement in accordance with regulations.

3. ||| The tenderer, agency placing orders, and agency assigning plans are agencies under the Ministry of Agriculture and Rural Development and Provincial People's Committees assigned the task of organizing procurement, ordering, and assigning plans.

||| Article 4. Selection of procurement methods, accepting orders, and assigning plans

1. ||| Management and operation of large-scale waterworks projects, including inter-provincial and inter-district waterworks projects; rock revetment sea reclamation waterworks projects (List A in the Appendix to Decree No. 130/2013/ND-CP).

a. ||| A limited liability company wholly owned by the State shall implement through the ordering or plan assignment method.

b. ||| Other units managing and operating waterworks projects shall implement through the ordering method.

2. ||| Management and operation of medium and small-scale waterworks projects (List B in the Appendix to Decree No. 130/2013/ND-CP) shall be implemented through the procurement or ordering method.

||| The classification of waterworks project scale is regulated by the Ministry of Agriculture and Rural Development.

||| Based on the scale of the waterworks project system and the specific characteristics of each locality, the Ministry of Agriculture and Rural Development and Provincial People's Committees decide on the application of procurement, ordering, or plan assignment methods for each water management unit to achieve the highest efficiency in the management and operation of waterworks projects.

Article 5. Bid products, ordered products, planned products

Bid products, ordered products, planned products for managing and operating water conservancy works: The irrigated area (ha) or cubic meters (m³) for irrigation, drainage, and water supply.

Article 6. Price, unit price for bidding, ordering, and planning

The price and unit price for bidding, ordering, and planning shall be determined based on the water management fee collection level prescribed by the Government or provincial People's Committees, or based on economic and technical norms, cost norms, and other expenses as stipulated and approved by competent authorities.

Article 7. Payment of management and operation costs of water conservancy works

1. Units responsible for managing, operating, and protecting water conservancy works shall be reimbursed from the state budget for the amount exempted from water management fees according to current regulations.

Entities not eligible for exemption from water management fees and units receiving orders or plans must collect water management fees according to current regulations.

2. For state-owned joint-stock companies with 100% state capital holding that manage, operate, and protect water conservancy works under the form of plan assignment, if the collection level of water management fees set by the Government is lower than reasonable actual costs, they will be subsidized, compensated, and financially supported by the state budget. If the company does not make a profit or the profit is insufficient to establish incentive and welfare funds equivalent to two months' actual salary, the state will support the establishment of these funds at the level of two months' actual salary implemented in the year. The level of support for incentive and welfare funds is determined according to regulations applicable to state-owned single-member joint-stock companies based on annual business performance evaluation results and enterprise management personnel assessment results as stipulated in Decree No. 61/2013/NĐ-CP dated June 25, 2013 of the Government on financial supervision, effectiveness assessment, and financial disclosure for state-owned enterprises and enterprises with state capital.

The central budget subsidizes, compensates, and supports the establishment of incentive and welfare funds and other financial support for water conservancy work management and operation companies under central management; local budgets subsidize, compensate, and support the establishment of incentive and welfare funds and other financial support for water conservancy work management and operation companies under local management.

3. The completion level regarding production volume, quality, progress, and provision of agricultural water services through bidding, ordering, or plan assignment are criteria for evaluating the performance of state-owned enterprises undertaking public interest tasks.

Chapter II

WATER CONSERVANCY WORK MANAGEMENT AND OPERATION BIDDING

Article 8. Conditions for organizing and participating in bidding

Conditions for organizing and participating in bidding shall be carried out according to Article 10 and Article 11 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on the production and supply of public goods and services.

Article 9. Forms of bidding

Forms of bidding shall be carried out according to Article 12 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on the production and supply of public goods and services.

Article 10. Procedures for Tendering the Management and Operation of Irrigation Works

The procedures for tendering the management and operation of irrigation works, the authority to approve the tender plan, tender documents, and tender results, establishing, evaluating, and approving the tender plan, preparing for tendering, organizing tendering, evaluating tender documents, submitting for approval, evaluation, approval, announcing tender results, negotiating, finalizing contracts, and signing contracts shall be implemented according to Articles 13, 14, 15, 16, 17, 18, 19, and 20 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on the production and supply of public goods and services, and in accordance with the guidance of the Ministry of Agriculture and Rural Development.

Article 11. Timeframe for Tendering the Management and Operation of Irrigation Works

The tendering of the management and operation of irrigation works must be completed before December 31 of the year preceding the planning year.

Chapter III

ORDERING THE MANAGEMENT AND OPERATION OF IRRIGATION WORKS

Article 12. Conditions for Ordering the Management and Operation of Irrigation Works

The conditions for ordering the management and operation of irrigation works shall be carried out in accordance with the provisions of Article 21 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on the production and supply of public goods and services.

Article 13. Ordering the Management and Operation of Irrigation Works

1. Basis for Ordering

a) The unit price or price of the management and operation work of irrigation works under the ordering method is determined based on the water fee rate set by the Government, economic and technical norms, current state cost norms, and decided by the competent state agencies (the Ministry of Finance, the sectoral management agency, and the provincial People's Committee) in accordance with the Law on Prices and guiding documents;

b) Based on the budget estimate assigned and the unit price or price of the management and operation of irrigation works decided by the competent state agencies, the ordering agency determines the quantity, volume, and quality of the management and operation products of irrigation works to sign the ordering contract.

2. Ordering Contract for the Management and Operation of Irrigation Works

Based on the approved budget estimate, the Ministry of Agriculture and Rural Development or its subordinate units authorized by the Ministry signs the ordering contract with units responsible for managing and operating irrigation works managed by the Ministry; the People's Committees of provinces and centrally-administered cities or their subordinate departments and sectors authorized by them (for irrigation works managed by counties) sign the ordering contract with units managing and operating irrigation works managed by localities. The contract model is stipulated in Appendix No. 03 issued together with this Circular.

Considering the specific nature of the management and operation of irrigation works, the ordering agency signs a contract with the ordered irrigation organization based on the following main criteria:

a) Area (ha), volume (m³) of water supply, drainage, and water supply;

b) Quality;

c) Price, unit price;

d) Subsidy level;

đ) Quantity, volume of subsidized irrigation services;

e) Contract value;

g) Completion time;

h) Delivery location;

i) Acceptance and payment methods;

k) Responsibilities and obligations between the ordering agency and the contracted enterprise;

l) Responsibilities of the parties for breach of contract.

In addition, the parties may agree to include other contents in the contract that do not conflict with the law and do not change the price or unit price of irrigation services.

3. Some Notes When Signing the Ordering Contract

a) Based on the ordering contract with the ordering agency, state-owned joint-stock companies holding 100% of the charter capital managing and operating irrigation works sign contracts with organizations using water that manage part of the works within the system managed by the state-owned joint-stock company.

b) At the end of the year, the ordering agency and the receiving entity must carry out acceptance, settlement, and sign the acceptance and settlement certificate of the ordering contract. The acceptance and settlement certificate of the ordering contract serves as the basis for the ordering agency to settle and finalize the funds for the receiving entity and for the ordering agency to settle the funds with the state budget.

c) Based on the approved budget estimate, economic and technical norms, and unit prices accepted by the competent authority, the ordering agency implements the signing of the contract with the receiving entity in accordance with the law.

d) Depending on the specific characteristics of each irrigation works system, the ordering agency stipulates a reasonable ratio or level regarding maintenance, repair, and upgrading of irrigation works in the ordering contract. These funds can only be used for maintenance, repair, and upgrading of irrigation works and cannot be used for other purposes or converted into profits of the entity. If unused, these funds will be transferred to the next year for maintenance, repair, and upgrading of irrigation works. The ratio or level for maintenance, repair, and upgrading serves as the basis for monitoring the implementation of the ordering contract, compelling the receiving entity to maintain, repair, and upgrade the system to prevent deterioration.

Article 14. Adjustment of Purchase Order Contracts

The adjustment of purchase order contracts shall be carried out in accordance with the provisions of Article 23 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on production and supply of public goods and services.

Article 15. Payment for Public Goods and Services under Purchase Orders

1. Basis for payment

a) A purchase order contract signed between the ordering agency and the enterprise, organization, or individual;

b) The quantity, volume, quality acceptance record of the product and the operation management of completed water conservancy works between the ordering agency and the enterprise, organization, or individual;

c) Price, unit price, and subsidy level for payment determined by competent state management agencies;

d) Other related documents.

2. Entities responsible for payment and settlement of the management and operation of water conservancy works ordered by the State using budget funds

a) Provincial People's Committees shall handle payment and settlement for the management and operation of water conservancy works supplied through purchase orders using local government budgets;

b) The Ministry of Agriculture and Rural Development, in collaboration with the Ministry of Finance, shall handle payment and settlement for the management and operation of water conservancy works supplied through purchase orders using central government budgets.

3. Procedures and formalities for payment and settlement of the management and operation of water conservancy works shall be implemented in accordance with the provisions of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget and related guiding documents.

Chapter IV

ASSIGNMENT OF MANAGEMENT AND OPERATION PLANS FOR WATER CONSERVANCY WORKS

Article 16. Basis and Time for Assignment of Plans

1. Basis for assignment of plans

a) State-owned joint stock companies holding 100% of the charter capital shall develop plan indicators for supplying and managing the operation of water conservancy works in their annual plans and report to the assigning agency according to the form attached as Appendix No. 01;

b) The assigning agency (the Ministry of Agriculture and Rural Development, Provincial People's Committee) shall base on the state budget revenue and expenditure estimates assigned to fulfill production and supply tasks of managing and operating water conservancy works, production plan indicators, product supply indicators, financial capacity, technical and technological production levels, management capabilities, and labor skills to assign plans to companies fulfilling public service tasks, after obtaining written comments from the finance agency;

c) The unit price or price of products and management and operation of water conservancy works supplied under the plan assignment method shall be determined based on the water resource fee collection rate prescribed by the Government or applying current economic and technical norms and cost standards of the State, and decided by the competent authority.

2. Time for assignment of plans: the assigning agency must complete the assignment of plans to the units managing and operating water conservancy works before December 31 of the year preceding the planning year.

Article 17. Content of Plan Assignment

Based on the specific characteristics of managing and operating water conservancy works, the assigning agency assigns plans to state-owned joint stock companies holding 100% of the charter capital to supply and manage the operation of water conservancy works according to the following main indicators:

1. Supply and Operation Management Plan for Water Conservancy Works

a) Area (ha), volume (m³) of water supply, drainage, and water supply;

b) Quality;

c) Price, unit price;

d) Completion time;

đ) Quantity, volume of subsidized agricultural water services;

2. Financial Plan

a) Revenue, expenses, profit from agricultural operations;

b) Amount of fees collected (or amount of fees retained), difference between the amount of fees collected (or amount of fees retained) compared to the company's expenses;

c) Amounts paid into the state budget as stipulated;

d) Price, unit price for payment of management and operation of water conservancy works;

đ) Subsidy level for management and operation of water conservancy works (due to lower income than reasonable costs);

e) Amount of state subsidy for setting up incentive and welfare funds (in cases where the company does not have sufficient profit to set aside these two funds as required);

3. Other indicators depending on the specific characteristics of managing and operating water conservancy works or as required by state management.

Article 18. Adjustment of the Plan for Implementing Management and Exploitation of Irrigation Works

The adjustment of the plan for implementing management and exploitation of irrigation works shall be carried out in accordance with the provisions of Article 23 of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on production and supply of public goods and services.

Article 19. Payment of Products, Management and Exploitation of Irrigation Works Implemented Through Plan Assignment Method

1. Basis for payment

a) The decision to assign the plan by the head of the competent state agency assigns the plan to a state-owned joint stock company holding 100% of the charter capital to implement the supply and management of irrigation works;

b) The acceptance record of quantity, volume, quality of products, management and exploitation of irrigation works completed between the agency assigning the plan (Ministry of Agriculture and Rural Development, People's Committee of the province) and the state-owned joint stock company holding 100% of the charter capital to perform public service tasks;

c) Price and unit price for payment are decided by the competent state agencies;

d) Other related documents.

2. The agency responsible for payment and settlement of management and exploitation of irrigation works assigned by the State through budget funds.

a) The People's Committee of the province shall be responsible for payment and settlement for the management and exploitation of irrigation works for state-owned joint stock companies holding 100% of the charter capital directly under the People's Committee of the province;

b) The Ministry of Agriculture and Rural Development shall take the lead and coordinate with the Ministry of Finance to carry out payment and settlement for the management and exploitation of irrigation works for state-owned joint stock companies holding 100% of the charter capital directly under the Ministry.

3. The procedures and formalities for payment and settlement of public goods and services shall be implemented in accordance with the provisions of Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget.

Article 20. Responsibilities of State-Owned Joint Stock Companies Holding 100% of the Charter Capital for Supplying and Managing Irrigation Works

1. State-owned joint stock companies holding 100% of the charter capital for managing and exploiting irrigation works shall be responsible for completing the targets set forth in the plan assigned by the competent state agency, including the following main indicators:

a) Area (ha), volume (m³) of water supply, drainage, and water supply;

b) Service quality;

c) Service supply schedule.

In case there are objective reasons requiring adjustments to the plan during the year of implementation, the company must promptly report to the competent state agency for examination and decision.

2. State-owned joint stock companies holding 100% of the charter capital for managing and exploiting irrigation works must report to the agency assigning the plan and the financial agency at the same level on the implementation of the plan targets and bear responsibility for the accuracy and honesty of the report.

Chapter V

ESTABLISHING PLANS, ASSIGNING PROJECTIONS, ISSUING FUNDS, PAYMENT AND SETTLEMENT

WHEN IMPLEMENTED THROUGH BIDDING, PROCUREMENT, PLAN ASSIGNMENT AND FINANCIAL SUPPORT

FOR MANAGEMENT AND EXPLOITATION UNITS OF IRRIGATION WORKS

FOR MANAGEMENT AND EXPLOITATION UNITS OF IRRIGATION WORKS

Article 21. Planning

1. In the case of tendering

Each year before July 31 of the preceding year, based on tasks, area (ha), volume (m³), unit price, economic and technical norms, units entrusted to organize tenders for the management, operation, and protection of irrigation works must prepare plans for water supply, drainage, and water supply under normal weather conditions, financial plans as prescribed to submit to state management agencies:

a) Units belonging to the entities entrusted to organize tenders for the management, operation, and protection of irrigation works managed by provinces and centrally governed cities report to the People's Committee of the province or centrally governed city; units managed by districts report to the People's Committee of the district;

b) Units belonging to the entities entrusted to organize tenders for the management, operation, and protection of central irrigation works report to the Ministry of Agriculture and Rural Development and the Ministry of Finance.

2. In the case of ordering services

Each year before July 31 of the preceding year, based on the actual situation of water supply, drainage, and water supply under normal weather conditions, the ordering unit prepares specific plans for each task to be ordered and submits them to the finance agency for consolidation in the budget plan to be submitted to the competent authority for approval. The procedures and time limits for preparing the plan shall be in accordance with the Law on State Budget and guiding documents.

3. In the case of assigning plans

Each year before July 31 of the preceding year, units assigned plans for managing, operating, and protecting irrigation works must prepare plans for water supply, drainage, and water supply under normal weather conditions, financial plans according to the forms prescribed in Appendix No. 01, the Department of Finance consolidates according to the forms prescribed in Appendix No. 02 issued together with this Circular to report to the competent authority assigning the plan for examination and decision:

a) Units assigned plans for managing, operating, and protecting irrigation works managed by provinces and centrally governed cities report to the People's Committee of the province or centrally governed city; units managed by districts report to the People's Committee of the district.

b) Units assigned plans for managing, operating, and protecting central irrigation works report to the Ministry of Agriculture and Rural Development and the Ministry of Finance.

When preparing plans, units must have supplementary tables to explain and detail the data for the form of Appendix No. 01 issued together with this Circular.

Article 22. Consolidation of Plans, Assignment of Plans, Reporting on Plan Implementation for the Management and Operation of Irrigation Works

1. Consolidation of Plans

The Ministry of Agriculture and Rural Development consolidates the plans of units responsible for managing and operating irrigation works under its management and sends them to the Ministry of Finance for coordination in monitoring and management.

The Department of Finance takes the lead in coordinating with the Department of Agriculture and Rural Development to consolidate the plans of units managing and operating irrigation works under provincial and centrally governed city management (including the plans of units under district management) to report to the People's Committee of the province or centrally governed city. The consolidated plan report must clearly specify the amount of budget funds allocated by type:

a) Subsidies for exempted irrigation fees;

b) Subsidies, price supports, and financial assistance;

c) Major repair costs;

d) Support for two reward and welfare funds;

e) Other support.

The support items need to be defined according to the sources of central government budget and local government budget.

2. Assignment of Plans to Units Responsible for Managing, Operating, and Protecting Irrigation Works

The assignment of plans is carried out in accordance with Articles 25 and 26 of Decree No. 130/2013/NĐ-CP of the Government on the production and supply of public goods and services;

The plan assignment time for units responsible for managing and operating irrigation works is before December 31 of the preceding year. Specifically as follows:

a) For units responsible for managing, operating, and protecting central irrigation works: The Ministry of Agriculture and Rural Development assigns plans to units after receiving written comments from the Ministry of Finance;

b) For units responsible for managing, operating, and protecting irrigation works at the local level: The People's Committee of the province or centrally governed city assigns plans or delegates to the Departments and Sectors under the province, or the People's Committee of the district (for district-level irrigation units) to assign plans to units.

3. At the end of the fiscal year, units assigned plans must report on the implementation of the plan. The report on the implementation of the plan is prepared based on the minutes of the settlement of water supply, drainage, and water supply contracts between the management and operation units of irrigation works and water user organizations, households (or water supply, drainage, and water supply ledgers). The implementation report is sent to the plan assignment agency and the finance agency (the Ministry of Finance, the Ministry of Agriculture and Rural Development for central irrigation work management and operation units; the Department of Finance, the Department of Agriculture and Rural Development, and the People's Committee of the district for local irrigation work management and operation units).

The report on the implementation of the plan serves as the basis for settling subsidy and financial assistance funds for units assigned plans.

Article 23. Allocation, payment, and settlement of funds for compensating water resource fees exempted, subsidies, and price supports for units responsible for managing and operating water conservancy works

Clause 1. The allocation of funds to compensate for exempted water resource fees, subsidies, and price supports for units responsible for managing, operating, and protecting water conservancy works shall be carried out through cash disbursement orders in accordance with Government Decree No. 60/2003/NĐ-CP dated June 6, 2003, and Circular No. 59/2003/TT-BTC dated June 23, 2003, issued by the Ministry of Finance, detailing and guiding the State Budget Law.

Clause 2. Allocation of subsidy and support funds

Point a. For units assigned plans

Based on the plans assigned to units responsible for managing, operating, and protecting water conservancy works, financial authorities shall provide provisional advances of 60% of the annual budget estimate from the first quarter of the planning year. By the beginning of the fourth quarter of the planning year, units responsible for managing, operating, and protecting water conservancy works shall report on the implementation of the first nine months, forecast for the last three months, and estimated full-year plan implementation. Financial authorities shall then allocate additional funds consistent with the plan, implementation status, and allocated budget estimates.

Point b. For units under procurement contracts

Based on the approved budget estimates, the procuring unit shall withdraw budget estimates to pay the contracted unit.

Based on the procurement contract between the procuring agency and the contracted unit, the procuring agency shall provide provisional advances of 50% of the contract amount after the contract is signed. After receiving a report indicating that 60% of the contract value has been fulfilled, the procuring agency shall provide additional provisional advances of 40% of the contract amount. Upon completion and acceptance of the contract, the procuring agency shall settle the remaining amount corresponding to the accepted quantity.

Clause 3. Allocation of major repair funds: Implementation shall follow the procedures and regulations governing investment management and basic construction projects, and other relevant laws (for major repairs not funded by water resource fee revenues or business operation revenues).

Clause 4. Allocation of funds to support two reward and welfare funds

The allocation of funds to support two reward and welfare funds for state-owned limited liability companies holding 100% of the charter capital, responsible for managing, operating, and protecting water conservancy works, shall be carried out concurrently with the allocation of funds to compensate for exempted water resource fees based on the approved plan for establishing reward and welfare funds by the competent authority.

Clause 5. Settlement of funds for compensating exempted water resource fees and financial support

obligation

The settlement of funds for compensating exempted water resource fees and financial support when implementing policies to exempt water resource fees shall be conducted according to current regulations. Specifically:

Point a. For units assigned plans: The assigning agency shall cooperate with the financial authority to review and approve annual financial support amounts together with the time for approving annual financial reports.

Point b. For units under procurement contracts: The procuring agency shall settle accounts with the financial authority according to the current system for settling government budget funds.

Chapter VI

IMPLEMENTATION

Article 24. Effective Date

This Circular takes effect from January 11, 2015, and replaces the provisions regarding procurement and assignment of plans set forth in Circular No. 11/2009/TT-BTC dated January 21, 2009, issued by the Ministry of Finance, guiding procurement and assignment of plans for units responsible for managing and operating water conservancy works and the financial management regulations of state-owned companies responsible for managing and operating water conservancy works.

Article 25. Responsibilities for Implementation

During implementation, if there are difficulties or obstacles, please reflect them to the Ministry of Finance for research and appropriate amendments and supplements./.