Circular No. 86/2019/TT-BTC guiding the determination of the initial price for auctioning the lease and transfer with a term of the right to exploit infrastructure assets of state-invested and managed road transport

CIRCULAR

GUIDELINES FOR DETERMINING THE INITIAL PRICE FOR AUCTIONING LEASE AND TRANSFER WITH A TIME LIMIT OF THE RIGHT TO EXPLOIT ROAD INFRASTRUCTURE ASSETS OF THE MOTORWAY SYSTEM INVESTED AND MANAGED BY THE STATE

Pursuant to the Law on Prices No. 11/2012/QH13 dated June 20, 2012 and related guiding documents;

WHEREAS, Law on Management and Use of State Property No. 15/2017/QH14 dated June 21, 2017;

Pursuant to the Law on Auctioning Assets No. 01/2016/QH14 dated November 17, 2016;

Pursuant to Decree No. 33/2019/NĐ-CP dated April 23, 2019 of the Government on the management, use, and exploitation of road infrastructure assets of the motorway system;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Price Management Department,

The Minister of Finance issues this Circular to guide the determination of the initial price for auctioning lease and transfer with a time limit of the right to exploit road infrastructure assets of the motorway system invested and managed by the State.

Article 1. Scope of Regulation

This Circular guides the determination of the initial price for auctioning lease and transfer with a time limit of the right to exploit road infrastructure assets of the motorway system invested and managed by the State.

Article 2. Applicability

1. The lessee or transferee is a business entity leasing or transferring with a time limit the right to exploit road infrastructure assets of the motorway system invested and managed by the State as prescribed in Decree No. 33/2019/NĐ-CP dated April 23, 2019 of the Government on the management, use, and exploitation of road infrastructure assets of the motorway system.

2. The lessor or transferor is the agency entrusted with managing road infrastructure assets of the motorway system invested and managed by the State as prescribed in Decree No. 33/2019/NĐ-CP dated April 23, 2019 of the Government on the management, use, and exploitation of road infrastructure assets of the motorway system.

MECHANISMS AND POLICIES REGARDING THE PRICE OF AUCTION SERVICES FOR ASSETS THAT MUST BE SOLD THROUGH AUCTIONS AS PRESCRIBED BY LAW

Article 3. Principles for Determining the Initial Price for Auctioning Lease and Transfer with a Time Limit of the Right to Exploit Road Infrastructure Assets of the Motorway System.

1. Ensuring compensation for actual reasonable and legitimate costs incurred in forming and managing the asset, consistent with the State's policies and guidelines for economic and social development during each period.

2. Being consistent with the market price level of similar assets or those with the same technical standards and quality at the time of lease or transfer and equivalent in terms of lease or transfer purposes.

3. Being consistent with the standards, norms, and economic-technical criteria established by competent state authorities.

Article 4. Determination of the Initial Price for Auctioning Lease of the Right to Exploit Road Infrastructure Assets of the Motorway System.

1. The initial price for auctioning lease of the right to exploit road infrastructure assets of the motorway system is the lowest starting price when auctioning the lease of the right to exploit such assets.

2. The initial price for auctioning lease of the right to exploit road infrastructure assets of the motorway system is determined based on the market rental price of similar assets or those with the same technical standards and quality at the time of lease and equivalent in terms of lease purpose; estimated revenue and expenses from exploiting the asset during the lease period if there are no similar assets or those with the same technical standards and quality at the time of lease and equivalent in terms of lease purpose for comparison.

3. The initial price for auctioning lease of the right to exploit road infrastructure assets of the motorway system as stipulated herein shall be determined according to valuation methods and appraisal standards in the Vietnamese Appraisal Standards System prescribed by the Ministry of Finance, ensuring that each asset must apply at least two (02) different methods, which shall be submitted to the Ministry of Transport or the People's Committee of the province or centrally-administered city for examination and decision.

4. Based on the specific characteristics and conditions regarding supply and market of the asset whose initial price needs to be determined, the Ministry of Transport or the People's Committee of the province or centrally-administered city shall propose and be responsible for selecting appropriate valuation methods and appraisal standards in the Vietnamese Appraisal Standards System prescribed by the Ministry of Finance, in accordance with the asset whose initial price needs to be determined, and in compliance with the provisions of Decree No. 33/2019/NĐ-CP dated April 23, 2019 of the Government on the management, use, and exploitation of road infrastructure assets of the motorway system and the guidance provided in this Circular.

When applying multiple valuation methods and appraisal standards, the agency or unit responsible for determining the initial price must evaluate and clearly indicate which method is the primary method and which is used for verification and cross-checking results, thereby analyzing, calculating, and proposing the initial price for auctioning lease of the right to exploit road infrastructure assets of the motorway system.

5. In cases where the Ministry of Transport or the People's Committee of the province or centrally-administered city uses only one valuation method or appraisal standard, the reasons must be clearly stated and factual evidence provided.

Article 5. Determination of the Starting Price for Auctioning the Transfer with Term of the Right to Exploit Road Transport Infrastructure Assets

1. The starting price for auctioning the transfer with term of the right to exploit road transport infrastructure assets is the lowest initial price when auctioning the transfer with term of the right to exploit such assets (excluding maintenance costs for road transport infrastructure assets as prescribed).

2. The starting price for auctioning the transfer with term of the right to exploit road transport infrastructure assets shall be determined based on the remaining value of the asset at the time of transfer according to revaluation, traffic volume (for assets that are roads), the remaining depreciation period of the asset, additional investment value, estimated revenue and expenses from exploiting the asset during the transfer term.

Where:

a) The remaining value of the asset at the time of transfer and the remaining depreciation period of the asset shall be determined in accordance with the provisions of the law, including the regulations of the Ministry of Finance on management systems and depreciation of assets.

b) Additional investment value is the portion of the value that the enterprise receiving the transfer with term of the right to exploit road transport infrastructure assets is responsible for implementing the investment project according to the approved planning by the competent authority under the laws on investment and related laws.

c) Traffic volume (for assets that are roads), estimated revenue and expenses from exploiting the asset during the transfer period shall be proposed and determined by the Ministry of Transport or the People's Committee of the province/city directly under the central government, and they shall bear responsibility for ensuring their suitability with the specific characteristics, nature, supply conditions, and market conditions of each asset.

d) Other reasonable and legitimate costs arising (if any):

d1) Principal and interest repayment costs shall be determined based on the loan agreement or contract for borrowing to invest in and construct road transport infrastructure assets. In cases where the principal and interest repayment costs have already been included in the asset value, this portion must be deducted from the remaining value of the asset.

d2) Management and exploitation costs of the managing entity (the transferring party) of the asset during the transfer term of the right to exploit road transport infrastructure assets, including:

- Management staff costs comprising payments for managers such as salaries, allowances, social insurance, health insurance, unemployment insurance, and trade union fees of the managing entity exploiting the asset. The determination of management staff salary costs shall be carried out in accordance with the laws on wages and other relevant legal documents corresponding to each type of road transport infrastructure asset.

- Material costs for management activities such as office supplies, repair costs for fixed assets, machinery, equipment, tools, and implements...

- Office supplies costs for management activities.

- Depreciation or wear and tear costs of shared fixed assets such as: offices, warehouses, structures, transportation means, transmission facilities, management machinery and equipment used in the office (if any).

- Taxes, fees, and charges as prescribed by law.

- Land rental fees (if any).

- Service costs purchased externally to serve the management department such as electricity, water, telephone costs; consulting survey costs, construction plans for leasing and transfer (if any).

- Other monetary costs outside those mentioned above such as conference costs, travel expenses, transportation costs, female employee benefits, conference participation fees, and other reasonable and legitimate costs related to the management of road transport infrastructure assets.

Among the management and exploitation service costs, any cost item that has economic-technical norms and policies established by the competent authority or prescribed by law (taxes, accounting, statistics, and related laws) and has a state-set price shall be calculated according to these regulations; for cost items without economic-technical norms and purchasing and expenditure regulations, the head of the agency or unit responsible for management and exploitation shall approve and bear responsibility for their decisions.

In cases where costs relate to multiple products, tasks, or jobs and cannot be separated, such as depreciation, wear and tear of assets; salaries, social insurance, health insurance, unemployment insurance, and trade union fees; management and exploitation costs..., it is necessary to aggregate and allocate them according to appropriate criteria in line with the relevant laws for each product or task.

3. After determining the starting price for auctioning the transfer with term of the right to exploit road transport infrastructure assets according to the guidance method stipulated in Clause 2 of Article 5 of this Circular, for each asset, the Ministry of Transport or the People's Committee of the province/city directly under the central government shall propose to select at least one (01) valuation method or appraisal method in the system of Vietnamese appraisal standards prescribed by the Ministry of Finance, which is suitable for the asset being appraised and consistent with the provisions of Government Decree No. 33/2019/NĐ-CP dated April 23, 2019 on the management, use, and exploitation of road transport infrastructure assets, and the guidance provided in this Circular to determine the starting price of the asset.

When applying multiple valuation methods or appraisal methods, the agency or unit responsible for determining the starting price shall evaluate and clearly indicate which method is the primary method and which method is used to check and compare results, thereby analyzing, calculating, and proposing the starting price for auctioning the transfer with term of the right to exploit road transport infrastructure assets.

4. In case the Ministry of Transport or the People's Committee of a centrally governed city or province uses a valuation method, the appraisal method must clearly state the reasons and provide factual evidence to support it.

Article 6. Implementation Organization

1. This Circular takes effect from January 20, 2020.

2. In cases where the legal normative documents serving as the basis or cited in this Circular are amended, supplemented, or replaced, they shall be implemented according to the amended, supplemented, or replaced legal normative documents.

3. During the implementation process, if there are any difficulties, the relevant agencies and units are requested to report to the Ministry of Finance for consideration and resolution./.