Joint Circular No. 54/TTLB guiding the management and allocation of investment capital for construction projects of the North-South 500KV power transmission line during the construction phase before the approval of the total budget estimate.

JOINT CIRCULAR

Guidelines for managing and allocating investment capital for construction of the North-South 500KV transmission line project during the construction phase without approved general budget estimates

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The North-South 500KV transmission line project must be constructed quickly to be put into operation soon under conditions where unit prices, technical designs, and general budget estimates have not been approved.

To ensure that the project is completed on schedule while strictly managing the allocation and use of funds, ensuring economy and rationality, and adapting to the characteristics of simultaneous construction and urgent completion of management bases, the Ministry of Energy temporarily approves unit prices and designs, based on Notification No. 3979/PPLT dated September 5, 1992 from the Head of the Government Council Office regarding permission for the Ministry of Finance and Ministry of Energy to guide the implementation of management and allocation of investment capital for construction projects during the phase without approved general budget estimates, as follows:

I. GENERAL PRINCIPLES:

1. Investment capital for the North-South 500KV transmission line project will be managed and allocated through four steps:

Step 1: Advance payment of capital for installation works, survey and design, column fabrication, and importation of equipment and materials for construction.

Step 2: Provisional settlement of capital for completed construction works according to temporary unit prices approved by the Ministry of Energy for installation works and survey and design.

Step 3: Allocation of capital for completed construction works according to officially approved budgeted unit prices and designs.

Step 4: Final settlement of capital for each completed construction component and final settlement of the entire completed construction project.

2. The Ministry of Finance (Investment and Construction Department) reviews and transfers state budget investment capital for the project quarterly to the State Treasury for management and allocation to the project.

Quarterly capital plans are divided monthly based on construction work plans, column production volumes; requirements for domestic and imported material and equipment payments, and installation and column fabrication capital needs calculated based on temporarily approved unit prices by the Ministry of Energy. Material and equipment capital needs are based on economic contracts and valid purchase documents.

3. Provisional settlement of capital for completed construction works is a method of managing the use of temporarily advanced capital, not a formal allocation and settlement of completed construction works.

When officially approved budgeted unit prices are available, the Project Management Board and the State Treasury will process settlements for completed construction works and repay temporarily advanced capital. At the same time, the provisional settlement of completed works will cease, and formal allocation and settlement of completed works will be implemented according to regulations.

4. The State Treasury directly manages and allocates investment capital for construction to the Project Management Board. Treasury Branches manage and allocate capital to Project Management Branches according to tasks assigned by the State Treasury. Project Management Branches must comply with State Treasury management and inspection and complete necessary procedures with Treasury Branches to obtain advance and settlement capital.

5. When applying for advance or settlement capital according to plans, the Project Management Board must submit documentation for provisional settlement of completed works from the previous month, confirmed by the Project Management Branch, for the State Treasury to review before allocation. The State Treasury will issue a written approval for provisional settlement of completed works and notify relevant departments of both Ministries.

The Project Management Board is responsible for accurately calculating requested advance capital, managing and inspecting the use of temporarily advanced capital by construction units, securing the safety of prepared equipment and materials, and mobilizing them quickly for construction.

6. In addition to the guidelines in this Circular, the State Treasury and the Project Management Board must fully comply with the provisions of Circular No. 17/TC-ĐT dated May 28, 1992 issued by the Ministry of Finance.

II. SPECIFIC PROVISIONS:

1. Preparation, Approval, and Transfer of Quarterly Investment Capital Plans:

- The Project Management Board prepares quarterly investment capital plans based on approved annual investment plans and construction progress, and the need to prepare equipment and materials in the quarter. Approved quarterly investment capital plans are sent to the Ministry of Finance (Investment and Construction Department) for review and notification of state budget capital allocation. Monthly breakdowns are included in the plan. Quantities are calculated based on construction designs and temporarily approved unit prices by the Ministry of Energy. Import and column fabrication capital needs for provisional advance are calculated based on registered economic contracts and delivery/payment schedules.

- Attached to the quarterly plan must be a summary of provisional settled (installation, survey and design) and settled (other construction) quantities of each unit from the previous quarter, approved in writing by the State Treasury Bureau.

- Foreign currency capital allocated according to approved plans and notifications is transferred by the Ministry of Finance through the Investment and Construction Department to the State Treasury for direct management and allocation to the Project Management Board.

2. Provisional Advance Capital Allocation:

a. Provisional advance for construction units: Based on the monthly plan within the approved quarterly investment capital plan and notification, the Project Management Board prepares and submits to the State Treasury documents approving the provisional capital needs for each construction unit. Clearly detailing the provisional capital.

- Calculated based on construction volume plans and temporarily approved unit prices.

- Construction units must prepare seasonal materials.

- Deduct the value of materials provided by the Project Management Board for use in the current period's planned volume.

The State Treasury Department shall examine and approve the advance funding for the Project Management Board, and simultaneously process the transfer of funds according to the Project Management Board's requirements for each receiving unit. The Project Management Board is responsible for managing and inspecting the use of the temporarily advanced funds by the units serving the construction and installation of the project.

b/ Advance payment for the Project Management Board to settle the purchase of imported materials and processing of columns:

When there is a need to settle accounts for imported materials and column processing, the Project Management Board shall prepare and submit to the State Treasury Department settlement documents along with economic contracts already signed, receipt notices, and delivery receipts for the State Treasury Department to examine and provide advance payments directly to the selling unit or processing unit as requested by the Project Management Board. The settlement amount will be transferred directly to the unit that has signed an economic contract with the Project Management Board, without passing through the account of another intermediary unit.

Quarterly once every quarter, the Project Management Board is responsible for preparing and submitting reports to two Ministries and the State Treasury Department on the management and use of advance payments; compiling lists of physical items and values of goods received and distributed to each construction unit, remaining in stock at the construction units and the Project Management Board's warehouse, preservation work, and the quantity, quality status, and those already incorporated into the completed project volume.

Related costs concerning importation, port fees, loading and unloading transportation and preservation from the stage of receiving goods to the stage of warehousing at the Project Management Board's warehouse and the construction unit's warehouse shall be centralized and settled at the State Treasury Department. The State Treasury Department shall provide funds according to the Project Management Board's request to settle accounts directly to the unit entitled to payment or transfer the reviewed list into the Project Management Board's deposit account at the State Treasury in Hanoi to carry out the payment.

c/ Advance payment for survey and design:

From the time of investment preparation until now, advance payments have been provided to implement surveys and designs, with completed volumes and partial handover of documentation to serve construction and import orders.

The Project Management Board and the Survey and Design Units must agree on the schedule of survey and design tasks to be carried out to establish and approve quarterly investment capital plans and advance payments similar to construction and installation units. Immediate provisional settlement of completed survey and design work quantities should be made in stages, determining completion levels as percentages of total survey and design volumes to calculate provisional settlement amounts based on the value of signed economic contracts. The cumulative provisional advance payment amount shall not exceed 70% of the contract value for survey and design. Starting from September 1992, requests for provisional advance payments for survey and design according to approved plans must be accompanied by provisional settlement documents for completed survey and design work from the previous month.

3/ Provisional settlement of completed work volumes:

- Each construction and installation unit must prepare a provisional settlement price sheet for completed work volumes, accompanied by a list of completed work volumes that have been accepted and confirmed by A and B, matching the designed quantity, quality, and calculated based on the provisional unit price approved by the Ministry of Energy. The list must be confirmed by the branch of the Project Management Board and the Local Treasury Office. The provisional settlement price sheet and list are prepared in five copies and submitted to the Project Management Board. The Project Management Board compiles a consolidated list, a provisional settlement request letter, and all price sheets and lists from the construction units, along with the Project Management Board's review opinion, and submits them to the State Treasury Department. The State Treasury Department examines and processes the provisional settlement approval for completed construction and installation work volumes, signing confirmation on the price sheets. One copy of the price sheet and list from each unit that has been provisionally settled is retained by the State Treasury Department, one copy is sent to the Local Treasury Office, and three copies are returned to the Project Management Board to send to the branch of the Project Management Board and the construction unit for management and accounting purposes.

b. For survey and design work volumes:

- The provisional settlement of completed survey and design work volumes needs to be determined according to the object of each phase of work based on the requirements and nature of the survey and design work.

- The survey work volume includes the completed volume of each survey phase, the handover of technical design documents, and construction design documents. The handed-over documents may cover the entire transmission line route or individual sections, substations.

- The design work volume is the completed volume recorded in the handover documents for technical design and construction drawings delivered to the Project Management Board, including technical design documents and construction drawing sets. These documents may cover the entire transmission line, individual sections, fabricated columns, or substations. Technical design or construction drawing documents must include a budget estimate, but due to the lack of officially approved budget prices, the preparation of the budget estimate can be separated into a distinct completed volume for settlement when the budget is established and approved.

- The procedures for preparing, reviewing, and approving provisional settlements of completed survey and design work volumes are carried out as stipulated for construction and installation work.

4/ Issuance and settlement of completed work volumes:

a. For construction and installation work volumes:

- Once the official budget price is approved, the Project Management Board and the State Treasury shall settle the entire completed construction and installation work volume from the start of construction, process the issuance and settlement of the official completed work volume, and settle the previously advanced and provisionally settled amounts, while terminating the provisional settlement of completed work volumes and implementing the issuance and settlement of completed work volumes according to the regulations of the Construction Project Completion Management Charter. The issuance and settlement of completed work volumes shall be carried out for each project component, based on the approved unit prices and budgets.

- To ensure the issuance and payment of completed works volumes in accordance with approved budgets for each item, the preparation of price lists and payment schedules for completed construction works must be done separately for each item for each interim or final payment. Each time the procedures for issuing and paying for completed works volumes are carried out, the previously advanced funds and the value of materials and equipment already used must be settled.

b. For the volume of survey and design work:

- The volume of survey work is paid once based on the approved budget and the economic contract signed with the survey and design unit.

- The volume of design work is paid once according to the approved budget and the economic contract between the Project Management Board and the survey and design unit. When issuing funds for payment, the previously advanced amounts must be deducted. However, the total amount issued shall not exceed 95% of the approved design work budget. The remaining 5% will be paid by the Project Management Board to the survey and design unit in accordance with the provisions of the Construction Management Regulation issued together with Decree 385/HĐBT of the Council of Ministers.

c. For other completed works volumes (excluding survey and design):

.This applies to types of work that meet the conditions for issuance and payment of completed works volumes immediately upon completion without requiring advance payments:

- Project Management Board expenses: The State Treasury implements funding for the Project Management Board according to the approved cost budget by the Ministry of Energy, which includes detailed budgets for each branch of the Project Management Board and the Project Management Board office. At the end of each quarter, the branches of the Project Management Board must prepare settlement reports with the State Treasury Branch. The State Treasury Branch checks and confirms, and the Project Management Board consolidates and settles the actual expenditures with the Ministry of Energy and the National Treasury Bureau. Unspent funds from the approved budget can be transferred to the next quarter's allocation. Expert fees (if any) are included in the Project Management Board's cost budget. Expenses paid by advance funds and imported materials and equipment, which are not included in the Project Management Board's cost budget.

- The National Treasury Bureau transfers project management board expenses to the State Treasury Branches according to the approved budget and the request of the Project Management Board so that the branches can issue funds to the branches and offices of the Project Management Board. The State Treasury Branches base their allocations and management of the use of funds by the Project Management Board's office and branches on the approved budget. At the end of each quarter, the State Treasury Branch issues a confirmation of the allocated funds and comments on the settlement reports of the Project Management Board's office and branches, which serve as the basis for reviewing the actual expenditures of the Project Management Board.

- Compensation and land clearance costs: Expenses for compensation that have sufficient legal and valid documentation, confirmed by local authorities and the State Treasury Branch, are eligible for payment. The branches of the Project Management Board prepare and submit settlement statements and invoices to the Project Management Board, which reviews, compiles, and submits them along with supporting documents to the National Treasury Bureau for verification and processing of payment. Payment may be made directly to the beneficiaries at the request of the Project Management Board or transferred to the State Treasury Branch for distribution by the Project Management Board branch based on verified documentation.

Compensation payments will be implemented according to the method of recording receipts and expenditures in the state budget, following guidelines set forth in another document issued by the Ministry of Finance.

- Troop relocation, temporary camps, and temporary roads: Issuance and payment of completed works volumes are applied when there is a completed and accepted volume and an approved budget. The basis for issuing funds is a completed settlement report of the work, confirmed by the Project Management Board branch, the State Treasury Branch, and the Project Management Board, which has reviewed and compiled a statement and invoice with relevant supporting documents. The National Treasury Bureau verifies and pays directly to the beneficiary units at the request of the Project Management Board. The Project Management Board must send the invoices and statements that have been paid to the Project Management Board branch and the State Treasury Branch for monitoring and accounting.

- Demining costs: Reports of completed and accepted demining volumes between the Project Management Board and the implementing unit serve as the basis for the Project Management Board to prepare invoices. The payment procedure is similar to that for troop relocation and temporary camps.

In cases where it is necessary to issue part of the funds in advance based on the value of the volume agreed in the economic contract, the Project Management Board sends related documents, the economic contract, and a request to the National Treasury Bureau for consideration and issuance of advance funds. When the completed volume fully meets the requirements of the economic contract, the Project Management Board must settle the contract with the implementing unit, prepare an invoice for the completed volume payment, settle the advance funds, and issue the remaining funds.

III/ IMPLEMENTATION:

1/ This Circular takes effect simultaneously with other documents issued by the Chairman of the Council of Ministers and relevant Ministries and sectors regarding the management and issuance of capital for the construction of the 500 kV North-South transmission line project. The provisions guiding the implementation of this Circular are measures for managing and issuing capital applicable during the phase when the project does not yet have all the required management bases as stipulated generally, and has not yet received officially approved unit prices and total design estimates.

2/ Construction and installation units, survey and design units, Project Management Boards, functional Departments of the Ministry of Finance, the Ministry of Energy, State Treasuries... are responsible for implementing this Circular.

3/ This Circular takes effect from September 1, 1992.