Joint Circular No. 74 KH/TL-TC on borrowing funds from the Kuwait Fund for the construction of the lower Yazun irrigation project in Gia Lai and Kon Tum provinces.

JOINT CIRCULAR

Regarding borrowing funds from the Kuwait Fund for the construction of the Yazun Lower Water Conservancy Project in Gia Lai-Kon Tum Province

The Yazun Lower Water Conservancy Project in Gia Lai-Kon Tum Province was approved by the Prime Minister's Council for the preliminary design and technical estimate at the end of 1986. In the two years 1988-1989, the Ministry of Water Resources and the People's Committee of Gia Lai-Kon Tum Province have prepared for construction such as surveying, technical design, preparing the total budget estimate, and preparing the construction site to build some components of the main works and irrigation canal system.

As an infrastructure construction project with clear benefits and important position in the economic development of Gia Lai-Kon Tum and the Central Highlands, which has been identified as a national priority, only 2 billion dong were implemented in the two years 1988-1989; the plan for 1990 was balanced at 4 billion dong out of the total investment capital for the entire project (from secondary canals upwards) amounting to 84 billion dong (based on the price in quarter 2/1989). If not concentratedly invested by the State, the construction time will be prolonged, so it is necessary to borrow funds from Kuwait to provide investment capital and shorten the construction time of the project.

With the agreement of the Prime Minister in Document No. 1575 KTĐN dated August 24, 1989, allowing procedures for borrowing funds from the Kuwait Fund for the construction of the Yazun Lower Project, the Ministry of Water Resources directly worked with the National Planning Commission, the Ministry of Finance, the Office of the Government Council, the State Bank, and the People's Committee of Gia Lai-Kon Tum Province.

The Ministry of Water Resources and the Ministry of Finance submit to the Prime Minister regarding borrowing the Kuwait Fund for the Yazun Lower Project as follows:

1. On external matters: Entrust the Ministry of Finance and the State Bank to lead negotiations with the Kuwait Fund to borrow between 28 to 30 million US dollars together with the Ministry of Water Resources.

2. On internal matters:

a. The borrowed capital will be included in the State budget balance, the Ministry of Finance and the National Planning Commission will coordinate the annual investment capital for the project according to the committed schedule.

b. Principles of managing the borrowed capital:

1- The portion of capital for purchasing construction equipment: enterprises under the Ministry of Water Resources commit to borrowing and repaying to the State budget immediately after implementation. The interest rate will be calculated based on the interest rate of the Kuwait Fund, the repayment period (principal and interest) will be about 8-10 years.

The Ministry of Finance and the Ministry of Water Resources will issue specific regulations.

2- The portion of borrowed capital included in the State budget balance for investing in constructing the main works, primary and secondary canals will be repaid by the State budget, Gia Lai-Kon Tum Province is responsible for mobilizing people to contribute an additional 10% for the construction of this project.

c. The amount negotiated with the Kuwait Fund in cash will be deposited into the State's foreign currency reserve fund for use according to the general plan.

d- The Ministry of Water Resources is the leading management agency and the main investor of the project, along with local authorities, will be responsible for implementing the project well to quickly achieve its effectiveness.

3- To effectively implement the negotiation for borrowing funds from the Kuwait Fund, it is proposed that the Prime Minister promptly issue a decision to initiate negotiations.