Decision No. 42/2006/QĐ-TTg On Certain Financial and Budgetary Mechanisms for Preferential Treatment of Can Tho City

Pursuant to …;

On certain preferential financial mechanisms for the city of Can Tho

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PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the State Budget Law number 01/2002/QH11 dated December 16, 2002;

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003, promulgated by the Government detailing and guiding the implementation of the Law on State Budget;

Considering the proposal of the Minister of Finance,

DECISION:

Article 1. Enactment of certain preferential financial mechanisms for the city of Can Tho as follows:

1. Regarding support from the state budget:

a) To support the city of Can Tho in implementing important projects that are significant to the city and the Mekong Delta region, based on the approved total budget estimate, project implementation progress, the city's budget allocation capacity, and the central government's budget balancing ability, during the period from 2006 to 2010, the Ministry of Planning and Investment and the Ministry of Finance shall report to the Government to submit to the National Assembly for allocation from the central budget through relevant ministries and central agencies or provide partial funding according to objectives to the city's budget to implement important projects, specifically as follows:

- Project to upgrade and expand Trà Nóc airport into an international airport;

- Investment in the project connecting National Highway 91 with the southern route of the Hau River;

- Project for the national highway 1A loop - connecting with National Highway 80;

- Route from Can Tho to Xa No - Vị Thanh;

- Upgrading and expanding National Highway 91;

- Project for the embankment along the Hau River and Can Tho River (through the city center);

- Construction of the Can Tho City Cultural Center;

- Construction of the National Sports Training Center;

- Construction of the Central General Hospital of Can Tho;

- Construction of the Can Tho Medical University;

- Embankment of Cai Khe Island;

- Project for the dike around Tan Loc Island;

- Project for the road and bridge over Cai Khang Island;

- Projects: upgrading Can Tho University into a national key university towards multi-disciplinary development; establishing the Ho Chi Minh National Political Academy and the National Administration Academy branch in Can Tho; upgrading existing research facilities and building new research and technology transfer centers in economics, biotechnology, high-tech industries (mechanical engineering, chemicals, information technology, agriculture) to serve regional development needs; constructing medical centers and specialized hospitals for cancer, obstetrics, cardiology, etc., to serve the Mekong Delta region.

b) The Ministry of Planning and Investment shall coordinate with the Ministry of Finance to submit to the competent authority for consideration and decision on the allocation of capital for important programs and projects from government bonds, including:

- Route Ma Thuong - Trà Nóc Airport;

- Route Bon Tong - Mot Ngan;

- Upgrading and expanding Cái Cui Port.

c) Annually, in cases where there is an increase in central government revenue compared to the assigned budget estimate from shared revenue between the central and local budgets as stipulated by the State Budget Law, the Can Tho City budget will be rewarded with 30% of this increased revenue, but not exceeding the increase compared to the previous year's actual performance.

d) For the annual increase in central government revenue compared to the budget estimate, based on the results of tax collection, the Ministry of Finance shall coordinate with the Ministry of Planning and Investment to report to the Government to submit to the Standing Committee of the National Assembly for priority supplementary targeted funding for the city's budget according to the provisions of the State Budget Law.

The excess revenue reward and the annual supplementary targeted funding as provided for in points c and d of Clause 1 of this Article shall be used by the city for investment in infrastructure construction projects, allocating counterpart funds for ODA projects, repaying loans taken by the city's budget, implementing important tasks to develop the economy and society, ensuring security, public order, and social safety of the city, and rewarding lower-level budgets. The People's Committee of Can Tho City shall report to the People's Council at the same level for decisions on specific amounts for each target and task and rewards for lower-level budgets.

2. Regarding policies for mobilizing financial resources for development investment:

a) The city of Can Tho is permitted to organize domestic capital mobilization through the issuance of local government bonds and other forms of mobilization as prescribed by law. The city budget is responsible for allocating sources to repay debts and related costs as prescribed.

b) The city of Can Tho may borrow foreign capital to implement important projects and works within the scope of the city's budget responsibilities based on the principle: on the basis of projects approved by the Municipal People's Council and written opinions from the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam, the People's Committee of Can Tho City shall submit to the Prime Minister for consideration and decision under the mechanism of the Government borrowing and lending to the city for implementation of projects and works according to the city's proposal. The city is responsible for allocating local budget funds to repay according to the law.

The total outstanding debt from mobilized capital for projects and works within the scope of the city's budget responsibilities as specified in points a and b above shall not exceed 30% of the total investment capital for basic construction projects in the city's budget as decided annually by the Municipal People's Council (excluding investment capital mobilized for projects as prescribed by law and investment capital for projects from unstable supplementary targeted funding from the central budget to the city budget).

c) The city of Can Tho may implement a mechanism to partially subsidize interest rates for organizations when they borrow capital to invest in important projects with the potential to recover capital (industrial zones, environmental services, public sanitation, drainage, etc.) within the scope and capacity of the city's budget and as prescribed by law.

d) Priority shall be given to allocate official development assistance (ODA) funds to the city of Can Tho for projects without the potential to recover capital, to invest in important infrastructure projects within the scope of the city's budget responsibilities. The provision of domestic counterpart funds for these projects shall be guaranteed by the city's budget.

d) Regarding the mobilization and effective utilization of land use fee revenues for investment in economic and social development in the city of Can Tho: based on the approved planning scheme, the city may utilize local budget funds and other sources of mobilization according to prescribed regulations to invest in land clearance projects, compensation for displaced residents, resettlement, investment in housing projects serving resettlement, and investment in technical infrastructure projects to create land reserves. On this basis, the city shall implement public auctions of land use rights according to prescribed regulations, generating capital for development investment and repayment of previously advanced funds and other mobilized capital.

3. Regarding the acceptance of aid:

The city of Can Tho is authorized to accept non-repayable foreign aid grants regardless of the size of the aid, except for those related to institutional, policy, legal reforms, administrative reform, cultural information as stipulated in Article 6 of Decision No. 64/2001/QĐ-TTg dated April 26, 2001 of the Prime Minister on the management and use of non-governmental aid.

Article 2For the 2007 budget (the first year of the next stable budget period), the Ministry of Finance, the Ministry of Planning and Investment, and the People's Committee of Can Tho City shall prepare the budget for the city ensuring the principle that the city's development investment expenditure budget corresponds to the level of development investment of Hai Phong or Da Nang City; the regular expenditure budget shall be prepared according to general standards and reported to the Government for submission to the National Assembly and the Standing Committee of the National Assembly in accordance with the State Budget Law.

Article 3In addition to the provisions of this Decision, other financial and state budget regulations for the city of Can Tho shall continue to be implemented in accordance with the current State Budget Law and Circular No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the State Budget Law.

The Ministry of Finance shall take the lead and coordinate with relevant agencies to organize the implementation and provide guidance on the contents stipulated in this Decision, ensuring compliance with legal regulations.

Article 4THIS DECISION SHALL TAKE EFFECT 15 DAYS AFTER ITS PUBLICATION IN THE OFFICIAL GAZETTE.

Article 5The Ministers of Finance, Planning and Investment, Transport, the Governor of the State Bank of Vietnam, the Chairman of the People's Committee of Can Tho City, and the heads of relevant agencies are responsible for enforcing this Decision. /./