JOINT CIRCULAR No. 42/1997/TTLB/BTC-BGTVT of the Ministry of Finance - Ministry of Transport No. 42/1997/TTLB/BTC-BGTVT dated July 5, 1997 guiding the management of capital borrowed from Maritime Commercial Joint Stock Bank (MCJSB) for investment in three national highway projects 14, 51, and La Long - Hoa Lac Road.

 JOINT CIRCULAR

Joint Circular No. 42/1997/TTLB/BTC-BGTVT dated July 5, 1997 of the Ministry of Finance and the Ministry of Transport guiding the management of capital borrowed from Vietnam Maritime Commercial Joint Stock Bank for investment in three national road projects 14, 51, and La Ngoc-Hoa Lac

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Pursuant to the Investment Management and Construction Regulation issued under Decree No. 42/CP dated July 16, 1996 of the Government;
Pursuant to Decision No. 441/TTg dated July 2, 1996 of the Prime Minister on the financial plan for National Road Projects 14, 51, and La Ngoc-Hoa Lac, and pursuant to Document No. 1877-KTN dated April 18, 1997 of the Prime Minister approving the investment sub-project Chon Thanh-Dong Xoai with the same financial mechanism as the Dong Xoai-Buon Ma Thuot project;
Pursuant to the opinion of the Prime Minister in Notification No. 16/TB dated February 26, 1997 of the Government Office regarding the capital structure for National Road Projects 14, 51, and La Ngoc-Hoa Lac;
To promptly meet the demand for managing and disbursing capital for construction projects to restore and upgrade National Road 14 from Chon Thanh to Buon Ma Thuot; improve and upgrade National Road 51 from Km 5 to Km 73 + 600; and construct the new La Ngoc-Hoa Lac Road using borrowed funds from Vietnam Maritime Commercial Joint Stock Bank (referred to as VMCJSB), the Ministry of Finance and the Ministry of Transport guide the management, use, and repayment of borrowed funds from VMCJSB for these projects as follows:

I. GENERAL PROVISIONS:

1. The projects to restore and upgrade National Road 14 from Chon Thanh to Buon Ma Thuot; improve and upgrade National Road 51 from Km 5 to Km 73 + 600; and construct the new La Ngoc-Hoa Lac Road will be funded through a mixed capital source including state budget allocation (40%) and borrowed funds from VMCJSB (60%, including interest charged by the bank).

2Upon completion and operation of the projects, traffic fees will be collected to repay the borrowed funds to VMCJSB according to the regulations set by the Ministry of Finance on fee collection and management for the three projects after obtaining the agreement of the Ministry of Transport. Prioritizing the repayment of VMCJSB's loan, traffic fees will be collected after deducting costs for the fee collection department.

The Vietnam Highway Administration under the Ministry of Transport is the project sponsor and bears full responsibility for organizing the entire process from investment and construction to fee collection and capital repayment; it also directs the project management boards to strictly comply with reporting and settlement procedures to the Ministry of Finance, the Ministry of Transport, and funding and lending agencies according to current investment and construction management regulations.

VMCJSB is responsible for providing sufficient funds in accordance with the schedule for the three National Road 14, 51, and La Ngoc-Hoa Lac projects based on the credit agreements signed with the Vietnam Highway Administration.

The General Department of Investment and Development is responsible for inspecting and commenting on the volume of basic construction work completed as the basis for withdrawing borrowed funds for payment to contractors.

II. SPECIFIC PROVISIONS:

Based on the plans approved by the Prime Minister for the projects, the Ministry of Transport assigns the plans for the projects to the Vietnam Highway Administration in line with the investment plans and capital structure specified by the Prime Minister. After receiving notification from the Ministry of Transport, the Vietnam Highway Administration assigns the investment capital plans for each project to the project management boards.

2. The Vietnam Highway Administration directly signs credit agreements to borrow funds from VMCJSB without collateral to restore and upgrade National Road 14 from Chon Thanh to Buon Ma Thuot; improve and upgrade National Road 51 from Km 5 to Km 73 + 600; and construct the new La Ngoc-Hoa Lac Road. The maximum borrowing amount is 60% of the approved total investment cost for each project.

The fixed interest rate (including fees) is 5.5% per year calculated in US dollars (USD). When disbursing and repaying principal and interest, the amounts are calculated in Vietnamese dong (VND) at the exchange rate published by the State Bank of Vietnam at the time of disbursement and repayment.

The loan term is 10 years, including two years of grace period.

3. The contents of the credit contract include:

+ Total approved investment amount for the three projects according to the investment decision.

+ Annual credit investment plan using loan capital.

+ Investment content.

+ Loan amount.

+ Interest rate on borrowed capital.

+ Loan term, repayment term (principal and interest), start date of repayment (principal and interest), repayment period and repayment amount per period.

Loan amounts and repayments are calculated in VND and converted to USD at the exchange rate published by the State Bank of Vietnam at the time of payment.

Responsibilities and commitments to fulfill the credit agreement by the borrower and the lender.

The credit agreement shall be prepared in six copies and sent to:

VMCJSB.

- Vietnam Highway Administration.

The Investment Development Bureau where the project account is opened.

4. Withdrawal of funds and payment:

The Vietnam Highway Administration authorizes the project management boards in writing to directly handle the procedures for withdrawing borrowed funds from VMCJSB within the annual borrowing plan to timely pay contractors.

Project management boards can borrow funds from VMCJSB to make advance payments and settle contractor payments according to Section 2 of Part VII of Circular No. 60-TC/TĐPT dated October 23, 1996 of the Ministry of Finance guiding the management of preferential credit loans from the state.

When there is actual work performed, the project management board shall promptly send:

The acceptance record of the quantity and quality of the works, detailed calculation sheets of materials, labor, and machinery, along with the summary cost sheet and payment voucher to the Investment Development Bureau where the project management board has its account.

Within five to seven working days upon receipt of the above documents, the Investment Development Bureau shall review and confirm in writing the quantity eligible for withdrawal of borrowed funds, which will be returned to the project management board to proceed with the withdrawal of borrowed funds from VMCJSB.

Based on the signed credit agreement with the Vietnam Highway Administration and the confirmation of the Investment Development Bureau regarding the quantity eligible for payment, VMCJSB shall process the provision of borrowed funds and payment to contractors according to the request of the project management board.

VMCJSB shall inform the Investment Development Bureau and the Vietnam Highway Administration of the amount of funds provided for each project for monitoring and management.

Borrowing, repayment, and accounting are conducted in Vietnamese dong (VND) and converted to USD at the exchange rate published by the State Bank of Vietnam at each payment and repayment time.

Source of funds for debt repayment:

The Vietnam Highway Administration is responsible for organizing the collection of traffic fees for the three projects according to state regulations. Daily collected traffic fees are deposited into the Vietnam Highway Administration's account at the local Treasury.

At the monthly repayment due date, the Vietnam Highway Administration requests the Treasury to withdraw funds from the account to repay VMCJSB. Upon receipt of the repayment funds, VMCJSB is responsible for informing the Vietnam Highway Administration for monitoring and management.

The entire amount of traffic fees collected, after fully repaying both principal and interest to HPH Commercial Joint Stock Bank, shall be remitted to the State Budget in accordance with the current regulations.

In the event that at the end of the loan repayment period, the revenue from traffic fees of the three projects is insufficient to repay the debt (principal plus interest) to HPH Commercial Joint Stock Bank, the Ministry of Transport and the Ministry of Finance shall examine and submit a proposal to the Government for the source of funds to repay the debt.

III. MONITORING AND REPORTING OF FINAL ACCOUNTS:

- Upon completion of the payment files, the Project Management Board shall compile and report on the implementation and use of borrowed funds to the Vietnam Highway Administration for overall monitoring of the borrowed funds.

- Monthly, the project sponsors shall report on the progress of the project, the use of and sources of borrowed funds from HPH Commercial Joint Stock Bank for each project to the Ministry of Finance and the Ministry of Transport. - Periodically or urgently, the Ministry of Finance and the Ministry of Transport will inspect the use of funds by the sponsors and the Project Management Board.

- Annually and upon completion of the project, the sponsor shall settle the investment capital for the project in accordance with Circular No. 66-TC/ĐTPT dated November 2, 1996 of the Ministry of Finance on guiding the settlement of investment capital for construction and installation works.

IV. IMPLEMENTATION CLAUSE:

This Circular takes effect from the date of signature. During its implementation, if there are any difficulties, please promptly send your comments to the Ministry of Finance and the Ministry of Transport for timely review, amendment, and supplementation.