CIRCULAR

Guidelines for implementing Decision No. 78/2004/QĐ-TTg dated May 7, 2004

of the Prime Minister on adjusting and supplementing certain mechanisms

 and policies to accelerate the progress of building clusters and residential areas

 in provinces frequently affected by floods in the Mekong Delta region

Pursuant to Decision No. 173/2001/QĐ-TTg dated November 6, 2001 of the Prime Minister on economic and social development in the Mekong Delta region for the period 2001-2005,

Pursuant to Decision No. 105/2002/QĐ-TTg dated August 2, 2002 of the Prime Minister on policies for households in flood-prone areas to purchase land plots and houses  in clusters and residential areas in the Mekong Delta region,

Pursuant to Decision No. 78/2004/QĐ-TTg dated May 7, 2004 of the Prime Minister on adjusting and supplementing certain mechanisms and policies to accelerate the progress of building clusters and residential areas  and housing in  provinces frequently affected by floods in the Mekong Delta region.

The Ministry of Finance provides guidelines on adjusting and supplementing certain mechanisms and policies to accelerate the progress of building clusters and residential areas and housing in provinces frequently affected by floods in the Mekong Delta region as follows:

I. ON THE INVESTMENT CAPITAL FOR BUILDING KEY INFRASTRUCTURE IN CLUSTERS AND RESIDENTIAL AREAS:

1. Sources of investment capital for constructing essential infrastructure in clusters and residential areas:

To promptly address the issue of investment capital for constructing essential infrastructure in clusters and residential areas (internal roads, water supply and drainage systems, etc.) to facilitate the rapid relocation of households eligible for resettlement into stable living conditions within these clusters and residential areas, localities need to proactively handle this through the following sources of capital:

1.1. The People's Committee of the province shall direct the Department of Finance to work with the Branch of the Central Support Fund for Local Development to determine the total loan demand for investing in essential infrastructure of the locality. The Central Support Fund for Local Development will process loans for the provincial budget within the annual state credit investment plan for the purpose mentioned above. The maximum loan term is 24 months. The interest rate on the loan shall be in accordance with current regulations. Localities must commit to repaying the debt and bear responsibility for the use of the loaned funds with the Branch of the Central Support Fund for Local Development of the Province. The Central Support Fund for Local Development will provide detailed guidance on loan procedures and debt recovery.

1.2. The People's Committees of the provinces shall proactively integrate various target programs to invest in essential infrastructure, particularly the Rural Clean Water and Environmental Sanitation Program and rural road construction programs within clusters and residential areas under their jurisdiction.

1.3. Mobilize capital from contractors who advance funds to construct essential infrastructure in clusters and residential areas. The Provincial People's Committee may designate contractors according to the provisions of the law if they have sufficient financial capacity to undertake the construction. Upon completion and commissioning of the works, payment will be made to the contractor.

1.4. Mobilize contributions from residents benefiting from the program (such as monetary contributions, labor days, etc.) to invest in essential infrastructure in clusters and residential areas.

1.5. Localities can proactively allocate revenues from selling 30% of the land plots in clusters and residential areas to invest in essential infrastructure in those clusters and residential areas within their jurisdiction.

Determination of the price of land plots in clusters and residential areas (the portion sold at 30%) shall be carried out in accordance with Clause 2.1, Section I, Part B of Circular Joint No. 72/2002/TTLT-BTC-BXD-NHNN issued by the Ministry of Finance, Ministry of Construction, and the State Bank of Vietnam on guiding the implementation of policies for households in flood-prone areas to purchase land plots and houses in clusters and residential areas in the Mekong Delta region.

1.6. In cases where the mobilization of the aforementioned sources of capital still falls short of the required amount, localities shall proactively allocate their local budgets to invest in essential infrastructure. In cases where localities receiving subsidies from the central budget face difficulties, the Ministry of Finance will increase the subsidy allocation according to the annual budget plan based on the proposal of the Provincial People's Committee.

2. Sources of capital for repaying infrastructure construction debts:

After the sale (or auction) of 30% of the land plots once essential infrastructure has been completed, in principle, all proceeds from the sale shall be deposited into the local Treasury (the Department of Finance shall open an account to monitor and manage this source of capital).

Revenue from the sale of 30% of the land plots in clusters and residential areas serves as the capital to repay loans from the Support Fund for Local Development that the province has borrowed to build essential infrastructure.

- If the loan from the Support Fund for Local Development exceeds the revenue from the sale of 30% of the land plots, then the local budget shall pay the difference to the Support Fund for Local Development.

- If the loan from the Support Fund for Local Development is less than the revenue from the sale of 30% of the land plots, then the locality may proactively allocate the surplus to continue investing in essential infrastructure in other clusters and residential areas under its management.

3. Preparation of the investment capital plan for constructing essential infrastructure in clusters and residential areas:

3.1. The project investor shall base the total capital requirement and investment sources for constructing essential infrastructure in clusters and residential areas on specific project conditions and submit it to the Provincial People's Committee and the Department of Finance. This includes the following sources:

- Capital from the sale of 30% of the land plots.

- Loans from the Support Fund for Local Development.

- Advance capital from contractors for construction.

- Contributions from residents benefiting from the program.

The capital plan shall be prepared annually and divided into quarters. Management, payment, and settlement of investment capital for constructing essential infrastructure shall be carried out in accordance with current state regulations and the provisions of this document.

(See attached Table No. 01 KH/TC)

3.2. Department of Finance: Based on the investment construction plans for essential infrastructure clusters and residential corridors proposed by the Project Investors, the Department of Finance compiles proposals for allocating funds to construct essential infrastructure for clusters and residential corridors throughout the province. Based on the proposal from the Department of Finance, the Provincial People's Committee considers and decides to assign plans to the Project Investors for management and implementation.

(According to Table 02 TH/KH attached)

4. Report on Building Essential Infrastructure in Clusters and Residential Corridors:

4.1. The Project Investor shall prepare reports based on the following contents:

- Based on the actual situation of payment and final settlement of capital for constructing essential infrastructure.

- On the 5th day of the first month of each quarter, the Project Investor shall prepare quarterly reports to be submitted to the Department of Finance (according to Model 03 BCTH).

In the report, clearly state difficulties, issues, and recommendations for handling capital to meet progress requirements.

4.2. Department of Finance: compile reports and propose adjustment plans for capital and sources of capital for each Project Investor, consistent with the progress of clusters and residential corridors, to submit to the Provincial People's Committee for consideration and decision (Table 04 KHĐC/TC attached).

4.3. The Provincial People's Committee compiles the capital plan and the implementation status of the investment construction of essential infrastructure quarterly and annually to send to the Ministry of Finance and the Steering Committee for the construction of clusters and residential corridors and housing in the Mekong Delta region.

5. Responsibilities of Relevant Agencies:

5.1. The Provincial People's Committee is responsible for:

- Directing relevant departments to aggregate and determine the capital needs for building essential infrastructure and the capacity of available funding sources, including the need for loans from the Development Support Fund.

- Directing the preparation of plans and proactively reallocating land sale proceeds from areas with favorable conditions (where many sales occur) to areas with less favorable conditions (where few or no sales occur), to build essential infrastructure in clusters and residential corridors; approve the land sale plan.

- Directing the borrowing and repayment of State development credit loans; organize the allocation of land and capital to individual households, recover debts from individual households to repay the Development Support Fund.

- Directing the management of investment capital and construction of essential infrastructure projects according to current regulations and guidelines set forth in this Circular.

5.2. The Department of Finance is responsible for:

- Aggregating and determining the capital needs for building essential infrastructure and the capacity of available funding sources, including the need for loans from the Development Support Fund.

- Preparing plans to reallocate land sale proceeds from areas with favorable conditions (where many sales occur) to areas with less favorable conditions (where few or no sales occur), to submit to the Provincial People's Committee for decision.

- Implementing the borrowing and repayment of State development credit loans according to the Decision of the Provincial People's Committee.

- Managing investment capital and construction of essential infrastructure projects according to current regulations and guidelines set forth in this Circular.

5.3. The Development Support Fund is responsible for signing loan contracts, transferring funds, and collecting debts according to signed agreements.

5.4. The State Treasury is responsible for organizing the control of payments for projects and reporting payment situations according to regulations.

5.5. The Project Investor is responsible for:

- Using and managing capital for its intended purpose effectively according to current State regulations.

- Preparing annual and quarterly plans for capital and sources of capital in a timely manner and submitting them to relevant agencies according to the provisions of this Circular.

- Advising the Provincial People's Committee to organize the sale of 30% of land plots according to current State regulations and the provisions of this document.

- Implementing planning and reporting on implementation situations according to the provisions of this Circular.

- Completing and promptly settling investment payments according to current State regulations.

II. ON CAPITAL FOR PROJECTS TO REINFORCE LEVEES IN EXISTING RESIDENTIAL AREAS.

Projects to reinforce levees in existing residential areas under the Program for Constructing Clusters and Residential Corridors and Housing must comply with local and regional water resource planning and flood control planning and will be funded through the following sources:

1. Localities may use up to 80% of the central budget allocated according to Decision 216/2002/QĐ-TTg dated March 25, 2002, of the Prime Minister (announced by the Ministry of Finance) to invest in projects to reinforce levees in existing residential areas.

The central budget allocated according to Decision 216/2002/QĐ-TTg dated March 25, 2002, of the Prime Minister and loans from the Development Support Fund (announced by the Ministry of Finance) represent the maximum amount that localities can use to raise the ground level and reinforce levees in existing residential areas under the Program for Constructing Clusters and Residential Corridors.

2. In addition to the central budget for reinforcing levees in existing residential areas, localities may mobilize the following sources of capital:

2.1 Mobilize contributions from households benefiting within the project area. Households currently residing in the project area and scattered households being relocated into the project area can purchase land and housing on deferred payment terms according to the mechanism and policies stipulated in Article 1 of Decision No. 105/2002/QĐ-TTg dated August 2, 2002, of the Prime Minister.

The contribution costs for households are determined based on the principle of allocating costs according to the area of land owned by each household.

2.2 If the above sources of capital are still insufficient, localities may allocate other legitimate capital from the local budget to implement the project.

3. Management, payment, and final settlement of capital for constructing projects to reinforce levees in existing residential areas shall be carried out according to current State regulations.

III. IMPLEMENTATION PROVISIONS.

The management, settlement, and final accounting of capital investment for constructing essential infrastructure in clusters and residential lines, and embankment construction in existing residential areas under the Program for Constructing Clusters and Residential Lines shall be implemented in accordance with the provisions of current legal documents: Circular No. 39/2002/TT-BTC dated April 26, 2002, Circular No. 54/2002/TT-BTC dated June 25, 2002 of the Ministry of Finance, and Joint Circular No. 72/2002/TTLT-TC-XD-NHNN jointly issued by the Ministry of Finance, Ministry of Construction, and the State Bank of Vietnam, guiding the implementation of policies for households in flood-prone areas to purchase and pay for slow-installment foundations and housing in clusters and residential lines in the Mekong Delta region.

This Circular shall take effect fifteen days after its publication in the Official Gazette.

In the course of implementation, if there are any difficulties, please report to the Ministry of Finance for consideration and resolution.