Circular No. 88/2018/TT-BTC on certain contents regarding financial management for public-private partnership investment projects and investor selection costs.

MINISTRY OF FINANCE -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 88/2018/TT-BTC	Hanoi, September 28, 2018

CIRCULAR

REGULATIONS ON CERTAIN CONTENTS REGARDING FINANCIAL MANAGEMENT FOR INVESTMENT PROJECTS UNDER THE PUBLIC-PRIVATE PARTNERSHIP FORM AND SELECTION COSTS OF INVESTORS

Pursuant to the Law on Bidding dated November 26, 2013;

Pursuant to the Law on Public Investment dated June 18, 2014;

Pursuant to the Law on Construction promulgated on June 18, 2014;

On the basis of the Investment Law dated November 26, 2014;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to the Law on Management and Use of State Assets dated June 21, 2017;

Pursuant to Decree No. 16/2015/NĐ-CP dated February 14, 2015 of the Government on the mechanism of self-management of public service units;

Pursuant to Decree No. 30/2015/NĐ-CP dated March 17, 2015 of the Government detailing the implementation of certain provisions of the Bidding Law regarding the selection of investors;

Pursuant to Decree No. 32/2015/NĐ-CP dated March 25, 2015 of the Government on project cost management;

WHEREAS, Decree No. 59/2015/NĐ-CP dated June 18, 2015 of the Government on project management for investment in construction;

Pursuant to Decree No. 77/2015/NĐ-CP dated September 10, 2015 of the Government on medium-term and annual public investment plans;

Pursuant to Decree No. 141/2016/NĐ-CP dated October 10, 2016 of the Government stipulating the self-management mechanism of public service units in the field of economic affairs and other public services;

Pursuant to Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decree No. 42/2017/NĐ-CP dated April 5, 2017 of the Government amending and supplementing certain articles of Decree No. 59/2015/NĐ-CP dated June 18, 2015 of the Government on project management;

Pursuant to Decree No. 151/2017/NĐ-CP dated December 26, 2017 of the Government detailing the implementation of the Law on Management and Use of State Assets;

Pursuant to Decree No. 63/2018/NĐ-CP dated May 4, 2018 of the Government on investment under the public-private partnership form;

Pursuant to Decree No. 120/2018/NĐ-CP dated September 13, 2018 of the Government amending and supplementing certain articles of Decree No. 77/2015/NĐ-CP dated September 10, 2015 of the Government on medium-term and annual public investment plans, Decree No. 136/2015/NĐ-CP dated December 31, 2015 of the Government guiding the implementation of certain provisions of the Law on Public Investment, and Decree No. 161/2016/NĐ-CP dated December 2, 2016 of the Government on special mechanisms for managing construction investment for certain projects under National Target Programs from 2016 to 2020;

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 Investment Department;

The Minister of Finance issues this Circular prescribing certain contents on financial management for investment projects under the public-private partnership form (hereinafter referred to as PPP) and selection costs of investors.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular prescribes the following contents:

1. Financial management for investment projects under the public-private partnership form (hereinafter referred to as PPP), including:

a) Management and use of investment preparation costs and project implementation costs of ministries, ministerial-level agencies, government agencies, provincial People's Committees (hereinafter collectively referred to as ministries, sectors, provincial People's Committees) in accordance with Decree No. 63/2018/NĐ-CP dated May 4, 2018 of the Government on investment under the public-private partnership form (hereinafter referred to as Decree No. 63/2018/NĐ-CP);

b) Mechanism for managing and using the source of investment preparation support funds as prescribed in Article 6 of Decree No. 63/2018/NĐ-CP;

c) Financial plan of the PPP project;

d) Preparation of plans for the portion of capital paid to investors using regular budget funds and revenue from the provision of public services;

đ) Payment of the state's share in implementing PPP projects;

e) Determination of the value of state assets participating in PPP projects;

g) Determination of the value of the portion of public investment capital already invested in public investment projects transferred to be implemented under PPP contracts;

h) Settlement of the value of completed PPP project works;

2. Costs in selecting investors as prescribed in Article 7 of Decree No. 30/2015/NĐ-CP dated March 17, 2015 of the Government detailing the implementation of certain provisions of the Bidding Law regarding the selection of investors (hereinafter referred to as Decree No. 30/2015/NĐ-CP).

Article 2. Applicability

1. Ministries, sectors, provincial People's Committees, investors, project enterprises, agencies, units, organizations, individuals related to investment preparation; implementation of PPP projects; settlement of completed PPP projects; operation and exploitation of PPP projects.

2. Organizations, units, individuals participating in or related to the activities of selecting investors as prescribed in Article 7 of Decree No. 30/2015/NĐ-CP.

3. For PPP projects using official development assistance funds and preferential loans from foreign sponsors, the financial plan shall be implemented in accordance with this Circular. In case the sponsor has different regulations from those stipulated in this Circular, the financial plan shall be implemented according to the sponsor's regulations or in accordance with this Circular if the sponsor does not object.

Article 3. Payment agency for the State's participation in PPP projects and opening accounts

1. The State Treasury shall be assigned the task of supervising the payment of investment preparation capital and the State's participation in PPP projects of ministries, sectors, and provincial People's Committees as stipulated in Article 5 and Article 11 of Decree No. 63/2018/ND-CP.

2. Agencies and units responsible for managing investment preparation capital and the State's participation in PPP projects of ministries, sectors, and provincial People's Committees may open accounts at the State Treasury where transactions are convenient and suitable for the State Treasury's supervision of capital payments.

3. The State Treasury shall have the responsibility to guide procedures for opening accounts in accordance with current regulations.

Chapter II

MANAGEMENT AND USE OF INVESTMENT PREPARATION COSTS AND IMPLEMENTATION OF PPP PROJECTS BY MINISTRIES, SECTORS, AND PROVINCIAL PEOPLE'S COMMITTEES

Article 4. Sources of funds and contents of expenditures for investment preparation work and project implementation by ministries, sectors, and provincial People's Committees as prescribed in

Article 5 of Decree No. 63/2018/ND-CP

1. State budget funds balanced in the investment development expenditure plan and regular expenditure plans of ministries, sectors, and provincial People's Committees allocated for investment preparation costs as specified in Points c, d, đ, e, g, and h of Clause 1 of Article 5 of Decree No. 63/2018/ND-CP.

2. State budget funds balanced in the investment development expenditure plans of ministries, sectors, and provincial People's Committees; support for investment preparation as prescribed in Article 6 of Decree No. 63/2018/ND-CP; revenue from selling tender documents to select investors; capital returned by the selected investor implementing the PPP project and other lawful sources allocated for the contents specified in Points a and b of Clause 1 of Article 5 of Decree No. 63/2018/ND-CP.

3. Project management unit activity costs under competent state agencies implementing PPP projects are permitted to be supplemented from the total construction investment amount according to the regulations of the Ministry of Construction (currently Decision No. 1191/QĐ-BXD dated November 17, 2017 of the Ministry of Construction on announcing cost standards for project management units under competent state agencies implementing PPP projects).

4. Specifically, the expenditures as prescribed in Points c, đ, e, g, and h of Clause 1 of Article 5 of Decree No. 63/2018/ND-CP:

a) Expenditures directly for PPP projects are allocated from the investment development expenditure plans of ministries, sectors, and provincial People's Committees and/or deducted from the total investment amount of the PPP project according to the regulations of the Ministry of Construction.

b) Activity costs of the lead unit managing PPP activities serving common activities (not tied to specific PPP projects) are allocated from the regular expenditure plans of ministries, sectors, and provincial People's Committees.

Article 5. Establishment, approval, and execution of budgets

1. Basis for establishing budgets

a) Documents issued by ministries and sectors assigning organizations and units under their jurisdiction; by provincial People's Committees assigning specialized agencies, subordinate agencies, or district-level People's Committees to perform tasks as stipulated in Clause 3 of Article 8 of Decree No. 63/2018/ND-CP (if applicable).

b) Lists of projects approved by competent authorities for investment under the PPP form as prescribed in Decree No. 63/2018/ND-CP;

c) Implementation plans for PPP projects approved by competent authorities (if applicable);

d) Preliminary selection plans for choosing investors approved by competent authorities (if applicable), Selection plans for choosing investors approved by competent authorities (if applicable);

đ) Policies, systems, standards, and norms according to current laws.

e) Revenue from investment preparation costs paid back by the winning bidder (if applicable); revenue from selling tender documents and other lawful revenues (if applicable).

2. Principles for establishing budgets

a) Contents of expenditures funded from regular expenditure plans of ministries, sectors, and provincial People's Committees shall be implemented in accordance with current regulations on establishing regular expenditure budgets from the state budget.

b) Contents of expenditures funded from investment development expenditure plans of ministries, sectors, and provincial People's Committees shall be implemented in accordance with current regulations on establishing investment development expenditure budgets from the state budget.

c) The winning bidder shall be responsible for repaying the investment preparation costs of the PPP project to ministries, sectors, and provincial People's Committees that have been implemented. In cases where competent state agencies do not require the investor to repay the investment preparation costs already incurred by the state agencies, this portion of the costs shall not be included in the financial plan for recovering investment capital and the investor's profit.

d) Revenues from investment preparation costs paid back by the chosen investor and revenues from selling tender documents remaining after expenses for organizing the bidding process as prescribed are to be deposited into the state budget in accordance with the law on the state budget.

3. Preparation, approval, and implementation of budgets.

a) Ministries, sectors, provincial People's Committees, and units assigned to implement investment preparation tasks, supervise contract implementation, and monitor project quality shall base on the provisions of the State Budget Law, Investment Law, and the provisions of Clauses 1 and 2 of this Article, establish budgets for each expenditure item and source of funding as prescribed in Article 4 of this Circular, consolidate them into their annual budget estimates according to different types of capital, and submit them to competent authorities for approval in accordance with current regulations;

b) After the annual budget is approved by competent authorities, ministries, sectors, and provincial People's Committees shall allocate budgets to units assigned to implement them in accordance with regulations;

c) In cases where new PPP projects are approved by competent authorities during the year, competent state agencies shall supplement the budget, and submit it to competent authorities for approval in accordance with current regulations;

d) Competent state agencies shall be responsible for managing and using the allocated budget for its intended purpose in compliance with regulations.

Article 6. Sources of capital for investment preparation support as prescribed in

Article 6 of Decree No. 63/2018/NĐ-CP

1. Ministries, sectors, provincial People's Committees shall proactively mobilize all legitimate sources of capital to support the investment preparation work of PPP projects in accordance with the State budget laws, public debt management laws, and other relevant laws.

2. The investment preparation costs of PPP projects that have been implemented by ministries, sectors, and provincial People's Committees must be stipulated in the tender documents to serve as the basis for investors to repay according to Clause 2 of Article 6 of Decree No. 63/2018/NĐ-CP.

3. After the project contract is signed between the competent state agency and the winning bidder (or the winning bidder and the project enterprise), the winning bidder shall be responsible for repaying the investment preparation costs of the PPP project to the ministries, sectors, and provincial People's Committees that have implemented them within a period not exceeding 15 days from the date the project contract is signed.

4. Ministries, sectors, and provincial People's Committees shall prioritize allocating revenue from investors' repayment of investment preparation costs in the annual state budget estimate to create a source of investment preparation for potential PPP projects. The management and use of capital for investment preparation support must comply with the provisions of state budget laws, public debt management laws, and other relevant laws.

5. For capital mobilized that is not from the state budget or where the capital provider has regulations on the management and use of investment preparation support capital different from those of state budget laws: Ministries, sectors, and provincial People's Committees shall bear responsibility for mobilizing, managing, and using this capital in accordance with its regulations and related laws. In cases where specific regulations need to be issued, ministries, sectors, and provincial People's Committees shall propose and coordinate with the Ministry of Finance to issue such regulations.

Article 7. Management of costs for selecting investors

1. Costs during the investor selection process include

a) Costs for preparing prequalification documents, tender documents, request documents;

b) Costs for reviewing prequalification documents, tender documents, request documents;

c) Costs for evaluating prequalification submissions, tender submissions, proposal documents;

d) Costs for reviewing prequalification results, investor selection results;

e) Costs for the Advisory Board to resolve investors' complaints about the investor selection results.

2. The standard for investor selection costs shall be implemented in accordance with Article 7 of Decree No. 30/2015/NĐ-CP.

3. Management and use of investor selection costs

a) The management and use of investor selection costs shall be carried out in accordance with the Ministry of Finance's regulations on the management and use of costs during the selection of contractors for projects funded by the state budget and government bonds (currently Circular No. 190/2015/TT-BTC dated November 17, 2015),

b) All costs for the review of prequalification invitation documents, evaluation of prequalification submissions, review of prequalification results; review of tender invitation documents, request documents; evaluation of tender submissions, proposal documents; review of investor selection results, costs for the Advisory Board to resolve investors' complaints about the investor selection results during the investor selection process, including cases where they are conducted by specialized agencies of ministries, sectors, and provincial People's Committees themselves or hired consultants for review, shall be allocated in the budget of the specialized agency.

Chapter III

DETERMINATION OF THE VALUE OF STATE ASSETS PARTICIPATING IN PPP PROJECTS

Article 8. Value of State Capital Investment in Public Investment Projects Transferred to PPP Projects

1. Public investment projects approved by competent authorities to be converted into PPP projects in accordance with Article 26 of Decree No. 63/2018/NĐ-CP must settle the value of the State capital investment already implemented in accordance with the regulations of the Ministry of Finance on final settlement of completed projects funded by state budget funds (currently Circular No. 09/2016/TT-BTC dated January 18, 2016, and Circular No. 64/2018/TT-BTC dated July 30, 2018) and the provisions of this Circular.

2. The determination of the value of State capital investment to be used as the State's participation in PPP projects in accordance with Article 26 of Decree No. 63/2018/NĐ-CP shall be carried out in accordance with the current laws on asset valuation.

Article 9. Determination of the Value of State Assets Participating in PPP Projects

1. Authority, procedures, and formalities for deciding to use state assets to participate in PPP projects shall be implemented in accordance with the laws on management and use of state assets.

2. The determination of the value of state assets for payment to investors under the Build-Transfer (BT) contract form shall be carried out in accordance with the Government's regulations on using state assets to pay investors when implementing construction projects under the BT contract form.

3. The determination of the value of state assets participating in PPP projects not covered by Clause 2 of this Article shall be carried out as follows:

a) The value of state assets participating in PPP projects shall be determined based on the value of state assets recorded in accounting books at the time the competent authority decides to use state assets to participate in PPP projects.

b) In cases where state assets have not been recorded in accounting books, the agency, organization, or unit responsible for managing and using the assets shall re-evaluate the value of the state assets at the time the competent authority decides to use state assets to participate in PPP projects in accordance with the laws on management and use of state assets.

c) The determination of the value of land use rights in the original cost of assets shall be carried out in accordance with Chapter XI of Decree No. 151/2017/NĐ-CP dated December 26, 2017, of the Government detailing certain provisions of the Law on Management and Use of State Assets.

Chapter IV

FINANCIAL PLAN OF PPP PROJECTS

Article 10. Principles for Establishing Financial Plans for PPP Projects

1. All costs and legitimate revenues stipulated during the preparation, implementation, and operation phases of PPP projects must be fully reflected in the financial plan of the PPP project in Vietnamese Dong.

2. The financial indicators of PPP projects specified in Clause 8 of Article 11 of this Circular shall be calculated based on discounted cash flows according to the weighted average discount rate of the expected sources of funding.

3. For PPP projects implemented under the Build-Transfer-Lease (BTL) contract form or Build-Lease-Transfer (BLT) contract form using recurrent expenditure sources to maintain public service provision activities, the revenue from public service provision activities to pay investors must comply with the following principles:

a) Recurrent expenditure used to pay investors must be consistent with the annual recurrent expenditure budget balance capacity of the state budget for ministries, sectors, localities, and units implementing PPP projects; it cannot be used to pay investment costs during the implementation phase (investment phase) of PPP projects.

b) Revenue from public service provision activities used to pay investors must ensure feasibility and consistency with the schedule for adjusting service fees. Specifically, for public institutions that self-fund recurrent expenditures and investments, the Development Fund for Public Services (if available) may be used to pay investment costs during the implementation phase (investment phase) of PPP projects.

Article 11. Contents of the Financial Plan

1. Total investment capital;

2. Capital structure:

a) State contribution capital (including public investment capital or state-owned assets according to the laws on public investment) to support construction projects to ensure the feasibility of the project; support for ancillary construction works, organization of compensation, land clearance, and resettlement in accordance with Clause 1, Article 11 of Decree No. 63/2018/NĐ-CP;

b) Shareholders' equity;

c) Capital raised by the investor.

3. Capital raising plan:

a) State contribution capital support (if any) and construction support capital for ancillary works, compensation, land clearance, and resettlement (if any) in accordance with Clause 1, Article 11 of Decree No. 63/2018/NĐ-CP:

- Total amount of capital;

- Public investment capital, capital from state-owned assets according to the laws on management and use of state-owned assets (if any);

- Content of support;

- Disbursement schedule of public investment capital, time of contribution with state-owned assets.

b) Shareholders' equity:

- Total amount of capital;

- Disbursement schedule.

c) Raised capital (commercial loans, preferential credit, foreign loans, other sources of capital):

- Total amount of raised capital (by each type of capital);

- Loan period, repayment period, grace period (by each type of capital);

- Capital raising costs including: interest rates of each source of loan capital, average interest rate, and necessary costs related to raising capital permitted by law (guarantee fees, commitment fees, credit insurance, brokerage fees);

- Loan currency and exchange rate for payment;

- Conditions to ensure raised capital;

- Disbursement schedule (by each type of capital);

- Debt repayment plan for raised capital (by each type of capital).

4. Proposals for preferential measures to ensure the financial plan of the project (if any).

5. Return on shareholders' equity of the investor.

6. Anticipated project operating costs during the operation period.

7. Capital recovery and profit plan of the investor:

a) Anticipated legitimate sources of income;

b) Anticipated service charges and prices;

c) Anticipated revenue from each legitimate source of income;

d) Implementation, operation, capital recovery, and profit recovery time of the PPP project;

đ) For PPP projects implemented under the Build-Transfer (BT) or Build-Operate-Transfer (BOT) contract forms, the government must anticipate the payment plan for the investor annually and in detail by each source of capital:

- Public investment capital;

- Recurrent expenditure to maintain the provision of public services;

- Revenue from the provision of public services (including an assessment of the implementation situation over the two preceding years at the time of preparing the Preliminary Feasibility Study Report and Feasibility Study Report).

e) For PPP projects implemented under the BT contract form, the land fund, office space, infrastructure assets, or rights to operate and exploit the transferred facilities and services must be anticipated for the BT investor according to the Government's regulations on using state-owned assets to pay investors when implementing projects under the BT contract form.

8. Indicators to assess the feasibility of the financial plan:

a) The competent authority decides to select investment projects based on the following indicators:

- Net Present Value (NPV);

- Internal Rate of Return (IRR);

- Benefit-Cost Ratio (B/C);

- Return on Equity (ROE);

- Duration of the project contract;

- Sensitivity of the above financial indicators due to changes in total investment capital, operating costs, revenue, and duration of the project contract.

b) Based on the specific nature, the state management agency may add other financial indicators such as debt-to-equity ratio, solvency ratio, quick asset conversion ratio, liquidity ratio, and capital preservation measures according to current laws to select effective investment projects.

Article 12. Sources of Shareholders' Capital

1. Shareholders' capital of investors:

a) The shareholders' capital of investors participating in implementing the project is the shareholders' capital contributed by one or a consortium of investors according to the charter of the project enterprise (excluding any rescheduled loans from the project sponsor).

b) Investors must ensure the ratio of shareholders' capital of the project enterprise to the total investment capital as stipulated in Article 10 of Decree No. 63/2018/NĐ-CP and it must be specified in the project contract.

2. Basis for determining shareholders' capital of investors:

a) The shareholders' capital of investors is determined based on the most recent annual financial report of the investor audited by an independent auditing unit and the report on the use of shareholders' capital of the investor at the time of participating in the PPP project.

In cases where the investor is a newly established organization within the year, the shareholders' capital of the investor is determined based on the financial report audited by an independent auditing unit from the date of establishment to the date of participation in the project; simultaneously, the representative of the shareholder, the shareholder, or the parent company must provide a commitment letter and financial statements proving sufficient shareholders' capital to contribute according to the project's financial plan.

b) In cases where, at the same time, the investor participates in multiple projects and other long-term investments (if any), the investor must prepare a list of projects and other long-term investments and ensure that the total shareholders' capital of the investor is sufficient to meet all commitments for all projects and other long-term investments as prescribed.

c) The investor is responsible for submitting to the competent state agency the plan to ensure sources of shareholders' capital as committed, including the schedule for increasing the registered capital of the project enterprise, consistent with the progress of implementing the PPP project as stipulated in Clause 4 of Article 38 of Decree No. 63/2018/NĐ-CP.

The investor shall bear legal responsibility for the accuracy and legality of the data and documents provided related to shareholders' capital, the list of ongoing projects, allocation of shareholders' capital to projects and other long-term investments being implemented up to the time of negotiating the project contract.

c) The state agency authorized to sign and implement the project contract is responsible for evaluating the financial capacity of the investor and supervising the implementation of commitments regarding mobilization of shareholders' capital by the investor.

Article 13. Sources of Mobilized Capital

1. Sources of mobilized capital up to the time of negotiating the project contract are determined based on the commitment or written agreement between the capital provider and the investor. The total amount of capital committed to be provided by the capital provider must be at least equal to the amount of capital the investor must mobilize.

2. Sources of mobilized capital must be consistent with the progress of implementing the PPP project as stipulated in the project contract.

3. The investor and the project enterprise are responsible for reporting to the competent state agency on the progress of mobilizing capital according to the provisions in the project contract.

Article 14. Interest on Borrowed Investment Capital

1. Interest on borrowed investment capital:

a) Interest on borrowed investment capital is calculated in the project PPP financial plan based on the committed loan amount and the progress of mobilizing various sources of capital in the project contract; interest during the construction period is included in the total investment cost of the PPP project.

b) Interest on borrowed investment capital applies only to the portion of capital the investor must borrow; interest is not charged on the portion of shareholders' capital committed by the investor in the project contract.

c) The interest calculation period starts from the disbursement date of the first loan and does not exceed the duration of the project as stipulated in the project contract.

2. The authority approving the Feasibility Study Report and the Detailed Feasibility Study Report decides and is responsible for the loan interest rate, principles, and conditions for adjusting the loan interest rate in the PPP project financial plan based on reference but not exceeding the following rates:

a) The average of the medium- and long-term loan interest rates of three commercial banks: Vietnam Joint Stock Commercial Bank for Foreign Trade (Vietcombank), Vietnam Joint Stock Commercial Bank for Investment and Development (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank);

b) The common medium- and long-term loan interest rates of the commercial banking system as announced by the State Bank of Vietnam on its official website (if available);

c) The loan interest rate of similar projects (if available);

d) The loan interest rate specified in Point a and Point b of this Clause is determined at the nearest point within three months prior to the approval of the Feasibility Study Report and the Detailed Feasibility Study Report.

3. In cases of designated investors: the competent state agency submits to the authorized person to approve the designation to decide the loan interest rate in the PPP project financial plan but not exceeding the lowest loan interest rate prescribed in Clause 2 of this Article.

Article 15. Investor's Profit

1. Ministries and sectors shall be responsible for issuing profit frameworks for PPP projects within their respective areas of management as stipulated in Clause 2, Article 73 of Decree No. 63/2018/NĐ-CP.

2. The investor's return on equity calculated during the preparation and approval stages of the Preliminary Feasibility Study Report and the Detailed Feasibility Study Report of the project shall be determined based on the PPP project's profit framework issued by ministries and sectors and the profits of similar PPP projects (if any).

3. The investor's return on equity in PPP projects shall be calculated from the time the competent authority permits the project to commence operation and exploitation.

4. In cases where investors are designated: the competent state agency shall submit to the authorized person to decide that the maximum level of investor's profit shall be equal to the minimum level of profit within the profit framework issued by ministries and sectors.

Chapter V

PAYMENT OF THE STATE'S CONTRIBUTION IN PPP PROJECTS AND PAYMENT TO INVESTORS FOR PROVIDING SERVICES UNDER BOOT AND BLT CONTRACTS FROM PUBLIC INVESTMENT FUNDS

Article 16. State's Capital Contribution

1. The state's capital contribution and the use of the state's capital contribution in PPP projects shall be implemented according to the provisions of Article 11 of Decree No. 63/2018/NĐ-CP.

2. The state's capital contribution in PPP projects must be specifically defined in the project contract regarding the ratio, value, progress, and payment conditions.

3. The state's capital contribution shall only be paid after the completed construction volume has been accepted and in accordance with the proportion of public investment funds already specified in the project contract, consistent with the medium-term and annual public investment plans approved by the competent authority and stipulated in the project contract.

Article 17. Payment of the State's Capital Contribution in PPP Projects as stipulated in

Point a, Clause 1, Article 11 of Decree No. 63/2018/NĐ-CP

1. Principles of Payment:

a) The allocation and verification of public investment funds allocated to support the construction costs of PPP projects shall be carried out according to regulations applicable to state budget investment funds.

b) After receiving detailed public investment plan documents from ministries, sectors, and localities, the State Treasury shall implement payment control procedures as prescribed in this Circular.

c) The State Treasury shall base its payment control on the payment request documents submitted by the agencies and units entrusted with managing the state's capital contribution in PPP projects and the project contract.

d) In cases requiring additional payment request documents, the State Treasury shall issue a payment rejection notice or notification to the agencies and units entrusted with managing the state's capital contribution in PPP projects within four working days from the date of receipt of the payment request documents, so that these agencies and units can complete the documents in accordance with the regulations.

đ) The total amount paid to the investor shall not exceed the state's capital contribution in the PPP project approved by the competent authority, and the amount paid to the investor in a year shall not exceed the annual public investment plan allocated to the PPP project. The cumulative amount paid for the PPP project shall not exceed the medium-term public investment plan assigned.

e) Agencies and units requesting payment of the state's capital contribution in PPP projects shall bear legal responsibility before the law and the authorized person for ensuring that the investor has fully disbursed the required equity ratio and met the loan disbursement conditions stipulated in the project contract; they shall also be responsible for the accuracy of the completed work volume and the proposed payment value; and ensure the legality of all data and documents provided to the State Treasury and relevant state agencies.

2. Payment Documents:

Agencies and units entrusted with managing the state's capital contribution have the responsibility to send the PPP project's legal documents to the State Treasury where the account is opened prior to or at the same time as the first request for payment of the state's capital contribution in the PPP project, including:

a) The project contract and related contract appendices concerning payment (only sent once);

b) A summary table of the completed work volume value proposed for payment according to the project contract, prepared by the investor and confirmed by the agency or unit entrusted with managing the state's capital contribution in the PPP project (Appendix 01);

c) The payment request document for public investment funds from the agency or unit entrusted with managing the state's capital contribution in the PPP project (Appendix 02);

d) Financial transfer documents according to the accounting voucher system of the Ministry of Finance;

e) A document from the agency or unit entrusted with managing the state's capital contribution in the PPP project confirming that the investor has ensured the equity ratio disbursement as stipulated in the project contract.

3. Payment Deadline for the State's Capital Contribution in PPP Projects:

The annual public investment plan allocated for the state's capital contribution in PPP projects shall only be paid for the completed volume that has been accepted according to regulations (currently up to December 31 of the planning year); the payment deadline for the completed volume shall be carried out according to the laws on public investment.

4. Advance Payment and Payment of State Support for Ancillary Construction, Compensation, Land Clearance, and Resettlement as stipulated in Point d, Clause 1, Article 11 of Decree No. 63/2018/NĐ-CP:

a) In cases where the state implements all ancillary construction works, compensation, land clearance, and resettlement:

The project PPP documents and materials for advance payment and payment to serve the control and payment of funds by the payment agency; the content of advance payment and payment of completed volume; the principles of payment control by the State Treasury; the advance payment period and payment period shall be implemented according to the Ministry of Finance's regulations on the management and payment of investment funds using state budget funds and any amendments or supplements (if any).

b) In the case where the State participates in implementing part of the construction works, organization of compensation, land clearance, and resettlement: The procedures, formalities, payment documents, and payment deadlines shall be carried out in accordance with the provisions of Article 16 and Article 17 of this Circular.

Article 18. Payment to investors providing services under Build-Transfer-Lease (BTL) contracts, Build-Transfer (BT) contracts, and similar contracts from public investment funds

1. Principles of Payment:

a) The payment for the portion provided by the State to investors providing services under BTL contracts, BT contracts, and similar contracts as stipulated in Clause 3, Article 11 of Decree No. 63/2018/NĐ-CP must comply with the contents of the project contract signed between the competent state agency and the investor; regulations on the management and use of public investment funds.

b) Conditions for payment, amount of capital to be paid, time of payment, payment deadline, and payment documents must be specified in the project contract.

c) The portion payable by the State shall be counted from the date the service is provided according to the agreement in the project contract. Payment shall be made periodically based on the quantity and quality of the agreed-upon service in the project contract.

2. Payment Documents:

a) Legal documents submitted once: The agency or unit responsible for managing the State's participation in the PPP project shall submit legal documents to the Treasury where the account is opened as the basis for controlling payments, including: The project contract, supplementary contract appendices, and other legal documents accompanying the project contract.

b) Payment documents:

- A table determining the quantity and quality of services provided by the investor, project enterprise;

- A request for payment of investment capital from the agency or unit responsible for managing the State's participation in the PPP project;

- Financial transaction vouchers issued in accordance with the accounting voucher system of the Ministry of Finance.

c) The payment deadline for the State's participation in the PPP project annually shall be implemented in accordance with the laws on public investment.

Chapter VI

ESTABLISHING THE CAPITAL PLAN AND PAYING INVESTORS FOR IMPLEMENTING BTL CONTRACTS, BT CONTRACTS FROM REGULAR EXPENSES AND REVENUES FROM PUBLIC SERVICE ACTIVITIES

Article 19. Establishing the capital plan, budget estimate, allocation, and assignment of the budget estimate for payment to investors from regular expenses

1. The establishment of the capital plan, budget estimate, allocation, and assignment of regular expense sources for payment to investors shall be carried out in accordance with the State Budget Law and guiding documents of the State Budget Law.

2. The capital plan for payment to investors from regular expenses shall be compiled into the three-year financial and state budget plan of ministries, sectors, and localities as prescribed.

3. Based on the project contract signed between the competent state agency and the investor/project enterprise; the progress of the project implementation; the time when the project enters operation and provides public services; ministries, sectors, and localities shall establish the capital plan and budget estimates for payment to investors from regular expenses.

Article 20. Establishing the capital plan and budget estimate for payment to investors from revenues generated from public service activities

The establishment, review, approval, and assignment of the medium-term investment plan from retained revenues from public service activities for payment to investors shall be carried out in accordance with the Government's regulations on the medium-term and annual public investment plans (currently Decree No. 77/2015/NĐ-CP dated September 10, 2015, and Decree No. 120/2018/NĐ-CP dated September 13, 2018) and the mechanism of autonomy for public service units (currently Decree No. 16/2015/NĐ-CP dated February 14, 2015).

Article 21. Payment of regular expenditure capital and revenue from public service provision activities to investors

1. Principles of Payment:

a) The payment of regular expenditure capital and revenue from public service provision activities to investors implementing projects under Build-Let-Transfer (BLT) contracts and Build-Transfer-Lease (BTL) contracts must comply with regulations on the management and use of regular expenditure capital and retained revenue from public service fees and prices.

b) Conditions for payment, amount of capital to be paid, time of payment, payment period, and payment documentation must be stipulated in the BTL project contract and BLT project contract.

c) The payment time for investors starts from the date when the services are provided according to the agreement in the project contract. Payment shall be made periodically based on the quantity and quality of services agreed upon in the project contract.

2. Payment Documents:

a) Legal documents submitted once

The agency or unit entrusted by the competent state authority to manage the State's portion from regular expenditure and revenue from public service provision activities for payment to investors under BTL contracts and BLT contracts shall be responsible for submitting legal documents to the State Treasury where the account is opened as the basis for payment control, including: the project contract, any supplementary agreements (if any), and other legal documents accompanying the project contract.

b) Payment documents:

- A consolidated table of the quantity and quality of services proposed for payment prepared by the investor and confirmed by the agency or unit entrusted to manage the State's portion from regular expenditure and revenue from public service provision activities and the service provider;

- The payment request form of the agency or unit entrusted to manage the State's portion according to the provisions of Point a Clause of this Article, clearly stating the following contents: Project name; project contract number; total capital to be paid to the service provider investor (by each source of capital); cumulative quantity of services provided, cumulative capital already paid (by each source of capital); capital requested for this payment (by each source of capital); beneficiary unit name, beneficiary unit account;

- Financial transaction vouchers issued in accordance with the accounting voucher system of the Ministry of Finance.

c) The payment period for regular expenditure capital and revenue from public service provision activities shall be carried out in accordance with the laws on state budget, fees, and related legal provisions.

Chapter VII

INSPECTION, REPORTING, SETTLEMENT

Article 22. Inspection and Reporting

1. Annually, periodically, or at random, ministries, provincial People's Committees, and financial agencies at all levels organize inspections of the management and use of investment preparation costs and project implementation, and the State's participation in PPP projects by authorized state agencies providing such services or units entrusted to manage investment preparation costs and project implementation, and the State's participation in PPP projects.

2. Annually, units using investment preparation funds and project implementation, and the State's participation in projects of ministries, sectors, and provincial People's Committees have the responsibility to report to the financial agencies under their respective ministries, sectors, and localities about the situation of using investment preparation funds and project implementation, and the State's participation in PPP projects.

3. Quarterly, investors and project enterprises have the responsibility to report to the units entrusted to manage public investment capital about the situation of using the State's capital participating in the project.

Article 23. Annual Settlement of Budget Year

Annually, the agency or unit responsible for managing the portion of investment preparation costs and project implementation, and the portion of the State's participation in PPP projects shall prepare settlement reports according to each type of capital source, submit them to the competent authority for approval in accordance with the Ministry of Finance’s regulations on the settlement of the use of state budget capital by annual budget year (currently Circular No. 85/2017/TT-BTC dated August 15, 2017 on the settlement of the use of state budget capital for investment projects by annual budget year; Circular No. 137/2017/TT-BTC dated December 25, 2017 on the examination, audit, notification, and consolidation of annual settlement).

Article 24. Preparation, Submission, and Approval of Project Completion Settlement

1. The entity preparing the completion settlement report: The project sponsor or investor in cases where a project company is not established.

2. The completion settlement of PPP project capital investment shall be carried out in accordance with the provisions of the Ministry of Finance’s Circulars on the settlement of completed projects funded by state capital (currently Circular No. 09/2016/TT-BTC dated January 18, 2016, and Circular No. 64/2018/TT-BTC dated July 30, 2018). Specifically, the entity preparing the settlement report must supplement the project contract and its appendices (if any).

3. Authority to approve the settlement: The Minister, Head of a ministry-level agency, Chairman of the Provincial People's Committee, or Chairman of the District People's Committee authorized by the Provincial People's Committee to sign and implement the project contract and approve the settlement.

4. Entity reviewing the settlement:

a) For projects managed by ministries or sectors: Units under the management of the ministry or sector shall organize the review.

b) For projects managed by provincial people's committees: The provincial Department of Finance shall conduct the review.

c) For projects managed by district people's committees authorized to approve the settlement: The district Department of Finance and Planning shall conduct the review.

5. Audit of the settlement report: The competent state agency shall agree with the investor in the project contract on hiring and the principles for selecting independent auditing organizations with capacity and experience to audit the value of construction investment in the project.

6. Content of the settlement review shall be implemented in accordance with the provisions of the Ministry of Finance’s Circular on the settlement of completed projects funded by state capital.

7. Settlement deadline:

The deadline for submitting the settlement dossier for approval by the competent authority starts from the date of signing the handover certificate for the project works to be put into use. The time for review and approval of the settlement dossier starts from the date when all required documents are received. The maximum time limit is specified as follows:

Project	National Importance, Group A	Group B	Group C
Deadline for submission of the settlement dossier for approval	05 months	04 months	02 months
Time for review and approval of the settlement	04 months	02 months	Example 5: Comrade Hoang Tuan Manh, aged 32, Senior Lieutenant, Company Commander, with 14 years and 02 months of service in the military (calculated as 14% seniority), due to unit merger and unable to be reassigned, was discharged to his place of origin from April 1, 2025. The monthly social insurance contribution wage of the month immediately preceding discharge (March 2025) for Comrade Manh is:

8. After completing the settlement of the project works, the ministries, sectors, and provincial people's committees shall send the report to the Ministry of Finance for consolidation and monitoring.

Chapter VIII

IMPLEMENTING PROVISIONS

Article 25. Effective Date

1. This Circular takes effect from November 12, 2018, and replaces Circular No. 55/2016/TT-BTC dated March 23, 2016, issued by the Ministry of Finance on certain financial management contents for PPP projects and bidding costs, Circular No. 75/2017/TT-BTC dated July 21, 2017, issued by the Ministry of Finance amending and supplementing certain articles of Circular No. 55/2016/TT-BTC, and Circular No. 30/2018/TT-BTC dated March 28, 2018, issued by the Ministry of Finance amending and supplementing certain articles of Circular No. 75/2017/TT-BTC.

2. During the implementation period, if the legal normative documents cited for application in this Circular are amended, supplemented, or replaced by new documents, they will be applied according to the new documents.

Article 26. Transitional Provisions

1. For Preliminary Feasibility Study Reports and Feasibility Study Reports approved before the effective date of this Circular: The competent state agency shall base on the provisions of this Circular to review and adjust the financial plan to proceed with subsequent steps.

2. For project contracts currently being negotiated but not yet signed by the effective date of this Circular: The competent state agency shall base on the provisions of this Circular to review and adjust, update relevant clauses in the project contract.

3. For project contracts signed before the effective date of this Circular, they shall continue to be implemented according to the project contract. In cases where the Government permits adjustments to the project, the competent state agency may consider and decide to apply the provisions of this Circular to ensure the effectiveness of the project.

4. For other cases, ministries, sectors, and provincial people's committees shall send documents to the Ministry of Finance for research and guidance.

Place of Receipt: - Central Party Committee Secretariat; - Prime Minister, Deputy Prime Ministers; - Office of the General Secretary; - President's Office; - Central Party Office and Party Committees; - National Assembly's Office; - Office of the Government - Supreme People's Procuracy; - Supreme People's Court; - State Audit Office; - People's Committees of provinces and centrally governed cities; - Ministries, agencies equivalent to ministries, and government agencies; - Central agencies of mass organizations, State-owned Corporations, and Economic Groups; - People's Councils, People's Committees of provinces and centrally governed cities; - Department of Finance, State Treasury of provinces and centrally governed cities. - Official Gazette; - Legal Documents Inspection Department, Ministry of Justice; - Units under and directly affiliated with the Ministry of Finance; - Government Electronic Portal; - Ministry of Finance Portal; - To be filed: VT, DT (400).

DEPUTY MINISTER DEPUTY MINISTER Tran Van Hieu

APPENDIX 01

SUMMARY TABLE OF THE VALUE OF COMPLETED WORKS ACCORDING TO THE CONTRACT FOR PAYMENT PROPOSAL

(Annexed to Circular No. 88/2018/TT-BTC dated September 28, 2018 of the Ministry of Finance)

Project name:

Project Code:

Based on the project contract between the competent state agency and the investor number: ... on ... month ... year ...

Investor or project company:

Payment number:

Basis for determination:

Quantity confirmation table of completed work number ... on ... month ... year ...

Content of work	Completed volume		Value of completed volume		Amount proposed for payment		Remarks
	Completed volume in the period proposed for payment	Cumulative completed volume up to the date proposed for payment	Value of completed volume in the period proposed for payment	Cumulative value of completed work up to the payment proposal date	Proposed payment for this period	Cumulative amount already paid
Implementing Project ...
Total:

1. Contract value:

2. Value of the State's participation in the Project (according to the contract):

3. Cumulative value of work completed by the investor up to the payment proposal period:

4. Cumulative value of the State's disbursement up to the payment proposal period:

5. Proposed value of State disbursement for this period:

Amount in words: ...(is the amount proposed for payment in this period).

REPRESENTATIVE OF THE INVESTOR/PROJECT COMPANY PROJECT PROPOSAL (Signature, full name, position, stamp)

REPRESENTATIVE OF THE ENTITY RESPONSIBLE FOR MANAGING THE STATE'S PARTICIPATION IN IMPLEMENTING THE PPP PROJECT UNDER THE COMPETENT STATE AUTHORITY MINISTRY, SECTOR, PROVINCE ... (Signature, full name, position, stamp)

APPENDIX 02

ENTITY RESPONSIBLE FOR MANAGING THE STATE'S PARTICIPATION IN THE PPP PROJECT UNDER THE COMPETENT STATE AUTHORITY Number:.../GĐN- (1) -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
APPLICATION FOR PAYMENT OF THE STATE'S PARTICIPATION IN THE PPP PROJECT

To: State Treasury...

Project name, works: ...

Project investment code: ...

Investor or project company: ... investor code: ...

Account number of the investor or project company:

Account number of the Investor or project enterprise:

- Domestic capital …at: … - Foreign capital …at: …

Based on the project contract between the competent state agency and the investor number: ... on ... month ... year ...

Based on the Summary Table of the Value of Completed Work Volume for Payment Proposal No. ... dated ..., ..., ...

Cumulative value of completed work volume for payment proposal:... VND.

Amount proposed for payment:

Source of funds: …

Belongs to the capital plan for the year:...

Unit: dong

Content	Total value of the State's participation in the Project	Cumulative completed volume value from commencement to the end of the previous period	Cumulative amount of State disbursement from commencement to the end of the period		Amount proposed for State disbursement this period
			Domestic capital (TN)	Foreign capital (NN)	Domestic capital (TN)	Foreign capital (NN)
Payment for the Project …
(*) The basis for budgeting expenses is based on the current regulations of the Ministry of Finance regarding travel expenses for civil servants and employees of the State going on short-term business trips abroad funded by the state budget.

Total amount proposed for payment in figures: …

In words: …

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

Beneficiary unit name …

Beneficiary unit account number …at …

REPRESENTATIVE OF THE INVESTOR/PROJECT ENTERPRISE (Signature, full name, position, stamp)

Date……month……year……. REPRESENTATIVE OF THE AUTHORITY OR UNIT ASSIGNED TO MANAGE THE STATE'S PARTICIPATION IN THE PPP PROJECT IMPLEMENTED UNDER THE AUTHORITY WITH COMPETENT POWER AUTHORITY (Signature, full name, position, stamp)

(1) Abbreviation of the Authority or Unit assigned to manage the State's participation in the PPP project implemented under the Authority with competent power