Vietnam: What are new points of the regulation on conditions for providing capital for a project under an annual public investment plan?

The Government of Vietnam promulgated Decree No. 120/2018/NĐ-CP on amendments to some Articles of the Government’s Decree No. 77/2015/NĐ-CP on annual and medium-term public investment plan, Decree No. 136/2015/NĐ-CP on guidelines for some Articles of the Law on Public Investment 2014 of Vietnam and Decree No. 161/2016/ND-CP on special mechanism for construction management of some projects under national target programs during 2016-2020.

One of the amendments to Decree No. 77/2015/NĐ-CP of Vietnam’s Government is the regulation on conditions for providing capital for a program/project under an annual public investment plan, specifically, the program/project satisfies the conditions prescribed in Article 56 of the Law on Public Investment 2014 of Vietnam.

In addition to the conditions specified in Article 56 of the Law on Public Investment 2014 of Vietnam, the new project needs to satisfy the following conditions: Its investment guidelines must be approved by a competent authority by October 31 of the year preceding the plan year, except for emergency project, project funded by state budget reserves, surplus or increase in budget revenue and other cases decided by the Prime Minister.

Concurrently, capital sources and capacity for balancing such capital sources shall be clearly identified and capital shall be provided in full according to the progress specified in the medium-term investment plan; capital shall be provided in full according to the progress approved by the competent authority during the first year of project execution. The emergency project and newly-generated necessary project included in the list of medium-term public investment plans shall be provided with capital from the budget reserve in the medium-term public investment plan as prescribed by law and have their investment guidelines and investment decision approved by a competent authority.

Regarding capital for investment preparation or project at the stage of investment preparation, it is required to obtain a decision on permission for investment preparation and investment preparation estimate decided by the competent authority by October 31 of the year preceding the plan year.

Decree No. 120/2018/NĐ-CP of Vietnam’s Government also amends the advance level of public investment plan capital specified in Decree No. 77/2015/NĐ-CP of Vietnam’s Government. The capital advanced from next year’s budget estimate must not exceed 20% of the estimated capital expenditure and must not exceed the total capital for projects that is specified in the 5-year plan provided. 

Rules, criteria and conditions for deciding and power to decide on advancing next year’s budget estimate shall comply with the Law on State Budget of Vietnam.

Decree No. 120/2018/NĐ-CP of Vietnam’s Government also amends the regulation on implementation of public investment plan and disbursement of capital therein specified Decree No. 77/2015/NĐ-CP of Vietnam’s Government. Time for implementation of the annual and medium-term public investment plan and disbursement of capital therein shall comply with Article 76 of the Law on Public Investment 2014 of Vietnam.

Regarding the project funded by the state budget, sovereign bonds, government bonds, local government bonds or revenues which are retained but not recorded in the state budget balance, time for disbursement of capital specified in the annual public investment plan shall be extended by December 31 of the year succeeding the plan year.

In special cases, the Prime Minister shall decide to extend the time for disbursement of capital specified in the annual public investment plan to each project to the subsequent years, but not exceeding the time specified under Point a Clause 1 Article 76 of the Law on Public Investment 2014 of Vietnam.

Regarding the project funded by ODA and concessional loans of foreign sponsors: The foreign capital specified in the annual public investment plan and recorded as debts of Vietnamese Government but not yet disbursed, the time shall be extended by December 31 of the year succeeding the plan year. The foreign capital specified in the annual public investment plan but not yet recorded as debts of Vietnamese Government but disbursed, upon the end of the time limit for adjustments to the final statement of state budget, capital which have been estimated but not yet disbursed shall be canceled.

In special cases, the Government shall request the Standing Committee of the National Assembly to adjust the next year's budget estimate, not exceeding the total foreign capital specified in the medium-term investment plan decided by the National Assembly.

Source: bnews.vn

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