Circular No. 79/2001/TT-BTC guides the financial mechanism for implementing rural transportation projects, aquaculture infrastructure, and village craft infrastructure in rural areas.

CIRCULAR

Guidelines for the financial mechanism to implement projects

rural roads, aquaculture infrastructure, and rural craft village infrastructure

Pursuant to Resolution No. 05/2001/NQ-CP dated May 24, 2001 of the Government on supplementing certain measures for economic plan management in 2001 and Decision No. 132/2001/QĐ-TTg dated September 7, 2001 of the Prime Minister on the financial mechanism for implementing the program to develop rural roads, aquaculture infrastructure, and rural craft village infrastructure, the Ministry of Finance provides guidance as follows:

I. GENERAL PROVISIONS:

1\. Provinces and centrally governed cities need to organize the development and decide on planning for the implementation of programs to develop rural roads, aquaculture infrastructure, and rural craft village infrastructure in accordance with local conditions and development requirements.

2\. The sources of funds for implementing investment programs for rural roads, aquaculture infrastructure, and rural craft village infrastructure shall mainly be raised through contributions from the people (in cash, in kind, labor days, etc.); the budget will support part of the funds from the centralized construction investment capital and the annual reinvestment capital according to the National Assembly's resolution of each locality. The proportion of budget support from the local budget shall be determined specifically by the People's Committee of the province or city to suit each region but shall not exceed 60%.

For mountainous provinces and provinces with small retained revenue sources for investment, the central government budget will provide partial support through the annual construction investment plan of the locality.

3\. In addition, provinces and centrally governed cities may borrow preferential credit at zero interest rate to implement investment projects for rural roads, aquaculture infrastructure, and rural craft village infrastructure.

4\. Provinces and cities that borrow preferential credit must proactively allocate resources to repay the loan principal using: investment capital from retained revenues according to the National Assembly's resolution, centralized construction investment capital, economic service capital allocated in the annual budget estimate of the locality, and other sources (if any).

5\. Annually, based on the total amount of preferential credit allocated for rural roads, aquaculture infrastructure, and rural craft village infrastructure approved annually, needs, and the ability to balance local investment capital including people's contributions, the Ministry of Finance decides the borrowing limit for each province and centrally governed city. The lending process will be carried out through the Development Support Fund system.

II. SPECIFIC PROVISIONS ON IMPLEMENTING PREFERENTIAL LOANS:

1\. The subjects eligible to borrow preferential credit under this Circular are provinces and centrally governed cities with investment projects for rural roads, aquaculture infrastructure, and rural craft village infrastructure that meet the following two conditions:

Invested from the budget or supported by the budget for investment.

Decided by the competent authority and have complete procedures for basic construction investment in accordance with current regulations.

2\. Loan application documents:

To determine the amount of preferential credit for investment in rural roads, aquaculture infrastructure, and rural craft village infrastructure, provinces and centrally governed cities shall submit to the Ministry of Finance the following documents:

List of investment projects approved by the competent authority.

A request from the People's Committee of the province or city for preferential credit for investment in rural roads, aquaculture infrastructure, and rural craft village infrastructure, clearly stating the following bases:

Total investment capital requirement.

Part on local capital raised from the public.

Level of support capital from the local budget.

Level of central budget support capital (if any).

The amount still lacking, including the proposal to borrow from the Central Government, with specific allocation of borrowing periods for each year, initially calculated for the years 2001, 2002, 2003.

Debt repayment plan for each year.

(Comprehensive table of loan requirements and projected debt repayments according to the attached model).

3. Loan level:

Based on the need for credit loans to invest in rural transportation roads, aquaculture infrastructure, and village craft infrastructure in rural areas, the ability of the local budget to repay debts, and the total annual preferential credit amount decided by the Prime Minister for the aforementioned needs, the Ministry of Finance decides the annual loan level for each province and centrally-administered city.

4. Basis for transferring loan funds: The Development Support Fund System transfers loan funds to provinces and centrally-administered cities based on:

The loan decision made by the Minister of Finance.

The loan agreement between the Department of Finance and Prices (authorized by the Chairman of the Provincial People's Committee) and the provincial branch of the Development Support Fund according to the attached model.

5. Interest rate for loans: 0%.

6. Method of disbursing loan funds:

Based on point 3 of Part II of this Circular, the provincial branches of the Development Support Fund shall transfer loan funds to the provincial budgets according to the loan amounts decided by the Minister of Finance. Specific allocations are determined by the Provincial People's Committee according to the decentralized management mechanism for investment capital and current investment capital management regulations.

7. Loan repayment period:

Repayment begins one year after signing the loan agreement. The repayment period is four years; however, for mountainous provinces and provinces where state budget revenue from domestic sources does not cover more than 30% of local budget expenditures, the repayment period is five years.

In cases where a province fails to repay the previous year's loan, the provincial branch of the Development Support Fund will temporarily suspend further loan disbursements until the province completes its repayment according to the signed agreement; in special cases, approval from the Ministry of Finance is required.

Regarding the management of borrowed preferential credit funds for investing in rural transportation roads, aquaculture infrastructure, and village craft infrastructure in rural areas.

Upon receiving loan funds transferred by the provincial branch of the Development Support Fund, the Department of Finance and Prices records them as local government revenue (Chapter 160B, Type 10, Clause 05, Item 086, Subitem 10). When repaying the loan, it records it as local government expenditure (Chapter 160B, Type 10, Clause 05, Item 158, Subitem 10).

Based on the total loan amount for investing in rural transportation roads, aquaculture infrastructure, and village craft infrastructure in rural areas, the Provincial People's Committee decides specifically on the funding levels for each target, adapting to the actual requirements and conditions of the locality, and reports to the Ministry of Finance within thirty days of receiving the loan decision for monitoring purposes.

Preferential credit funds for investing in rural transportation roads, aquaculture infrastructure, and village craft infrastructure in rural areas can only be used for these purposes and cannot be used for other purposes.

Allocation for rural transportation road investment projects, aquaculture infrastructure, and village craft infrastructure in rural areas is carried out as follows:

Based on the provincial people's committee's support decision, the Department of Finance and Prices supplements the county budget for projects directly managed by the county and supplements the commune budget for projects directly managed by the commune (which may include subsidies in kind or cash according to local regulations). Communes are responsible for effectively using the state support and mobilizing contributions from the public.

Investment costs for rural transportation roads, aquaculture infrastructure, and village craft infrastructure in rural areas are settled as local government expenditures (according to the decentralized management of basic construction investment in the locality).

III. IMPLEMENTATION:

1. Provincial People's Committees have the responsibility:

To approve investment projects for rural transportation roads, aquaculture infrastructure, and village craft infrastructure in their jurisdictions, balancing various sources of investment funds to implement these projects.

To prepare detailed loan applications for preferential credit for each sector: rural transportation road investment, aquaculture infrastructure, and village craft infrastructure in rural areas, and submit them to the Ministry of Finance according to the provisions at point 2 of Part II of this Circular.

To direct and inspect sectors and levels in managing and utilizing credit funds according to targets and investment capital management regulations, and to fulfill loan repayment commitments to the Development Support Fund as agreed.

To report quarterly and annually on the implementation of rural transportation road investment projects, aquaculture infrastructure, and village craft infrastructure in rural areas to the Prime Minister, simultaneously sending reports to the Ministry of Planning and Investment and the Ministry of Finance.

2. The Ministry of Finance has the responsibility:

To decide on the specific annual loan amount for each province and centrally-administered city after receiving their loan application forms according to the provisions at point 3 of Part II of this Circular.

To handle financial issues arising during the implementation of rural transportation road investments, aquaculture infrastructure, and village craft infrastructure in rural areas.

3. The Ministry of Planning and Investment: To take the lead and coordinate with the Ministry of Finance and relevant agencies to balance and propose to the Prime Minister the level of support from the central budget for mountainous provinces, provinces with limited state budget revenues, and the total annual preferential credit amount for implementing rural transportation road programs, aquaculture infrastructure, and village craft infrastructure in rural areas.

4. The Development Support Fund System has the responsibility:

Transfer the loan capital to provinces and cities immediately upon receipt of the signed agreement (loan contract) between the Development Support Fund system and the provinces/cities, in accordance with the decision of the Minister of Finance, without organizing an assessment, review, and lending for each project.

Recover the loan debt when it is due.

Calculate the need for interest subsidy and fees that must be provided to the Development Support Fund to submit to the Prime Minister for decision in accordance with Circular No. 43/2000/TT-BTC dated May 23, 2000 of the Ministry of Finance.

Annually, have the responsibility to report the results of transferring loan capital and the situation of recovering loan debt to the Prime Minister, simultaneously sending to the Ministry of Planning and Investment and the Ministry of Finance.

This Circular takes effect from the date of signature. During implementation, if there are difficulties or obstacles, the provinces and centrally governed cities should reflect them to the Ministry of Finance for resolution./.

Loan Contract Number ............

(Annexed to Circular No. 79/2001/TT-BTC dated September 28, 2001 of the Ministry of Finance)

Name of the lending unit: Provincial (city) Branch of the Development Support Fund

............................................................................

Address:…

............................................................................

Telephone: ...

Name of the borrowing unit: People's Committee of the province (city)...

Address:…

............................................................................

Telephone: ...

Commitment clauses

1- The Provincial (city) Branch of the Development Support Fund...transfers to the provincial (city) bank...a loan amount of...dong according to Decision No..../2001/QĐ-BTC dated...day of the...month of 2001 of the Minister of Finance.

2- Interest rate on the loan: 0%.

3- Principal repayment period: 1 year (12 months) starting from the date of the loan contract. The province commits to annually repay the loan to the Provincial Branch of the Development Support Fund in accordance with the regulations on time and amount of repayment. If not repaid within the deadline, it will be handled as stipulated in Point...Part...of Circular No..../2001/TT-BTC dated...day of June 2001 of the Ministry of Finance.

This document is made in four copies of equal legal value, each party retains two copies.

Aggregate loan demand

Implement rural transportation projects, aquaculture infrastructure, and rural craft village infrastructure

(Annexed to Circular No. 79/TT/Bộ Tài chính dated September 28, 2001 of the Ministry of Finance)

Unit: million dong