CIRCULAR

Providing a number of contents on financial management of investment projects in the form of public-private partnership and investor selection expenses

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Pursuant to the December 16, 2002 Law on the State Budget;

Pursuant to the December 9, 2013 Bidding Law;

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

Pursuant to the June 18, 2014 Law on Construction;

Pursuant to the November 26, 2014 Law on Investment;

Pursuant to the Government’s Decree No. 60/2003/ND-CP of June 6, 2003, detailing and guiding the implementation of Law No. 01/2002/QH11 on the State Budget;

Pursuant to the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on investment in the form of public-private partnership;

Pursuant to the Government’s Decree No. 30/2015/ND-CP of March 17, 2015, detailing a number of articles of the Bidding Law regarding investor selection;

Pursuant to the Government’s Decree No. 32/2015/ND-CP of March 25, 2015, on management of construction investment costs;

Pursuant to the Government’s Decree No. 59/2015/ND-CP of June 18, 2015, on management of construction investment projects;

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

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining 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 promulgates the Circular providing a number of contents on financial management of investment projects in the form of public-private partnership and investor selection expenses.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular provides a number of contents on:

a/ Financial management of investment projects in the form of public-private partnership (below referred to as PPP projects), covering:

- Management and use of investment preparation expenses and project implementation expenses of ministries, sectors and provincial-level People’s Committees under the Government’s Decree No. 15/2015/ND-CP of February 14, 2015, on investment in the form of public-private partnership (below referred to as Decree No. 15/2015/ND-CP);

- Financial plans of PPP projects;

- Payment of the State’s investment capital used for implementation of PPP projects;

- Finalization of completed PPP projects;

b/ Investor selection expenses as prescribed in Article 7 of the Government’s Decree No. 30/2015/ND-CP of March 17, 2015, detailing a number of articles of the Bidding Law regarding investor selection (below referred to as Decree No. 30/2015/ND-CP).

2. This Circular does not provide:

a/ Financial management of official development assistance and concessional loans of foreign donors and other funding sources under the Prime Minister’s decisions for investment preparation support as prescribed in Clause 1, Article 6 of Decree No. 15/2015/ND-CP;

b/ Payment made by allocation of land areas to investors of build-transfer (BT) investment projects approved by the Prime Minister under Decision No. 23/2015/QD-TTg of June 26, 2015.

Article 2. Subjects of application

1. Competent state agencies, investors, project enterprises and agencies, organizations and individuals involved in investment preparation, project implementation, finalization of completed PPP projects, or operation of PPP projects.

2. Organizations and individuals involved in or related to investor selection prescribed in Article 7 of Decree No. 30/2015/ND-CP.

Article 3. Agencies responsible for paying investment capital and opening accounts

1. State treasury offices are tasked to control the payment of the State’s investment preparation capital and investment capital used for implementation of PPP projects of ministries, sectors and provincial-level People’s Committees.

2. Agencies assigned to manage the State’s investment preparation capital and investment capital used for implementation of PPP projects of ministries, sectors and provincial-level People’s Committees may open accounts at state treasury offices convenient for their transactions.

3. The State Treasury shall guide the procedures for account opening in accordance with current regulations.

Article 4. Project owners

The owner of a PPP project is a project enterprise established by the investor in accordance with law or is the investor in case no project enterprise is established.

Chapter II

MANAGEMENT AND USE OF INVESTMENT PREPARATION EXPENSES, SUPERVISION OF PERFORMANCE OF PPP PROJECT CONTRACTS AND QUALITY OF WORKS OF MINISTRIES, SECTORS AND PROVINCIAL-LEVEL PEOPLE’S COMMITTEES

Article 5. Sources for payment and items of expenses

1. State budget funds included in annual regular expenditure plans of ministries, sectors and provincial-level People’s Committees for payment of investment preparation expenses prescribed at Points d, dd, e, g and h, Clause 1, Article 5 of Decree No. 15/2015/ND-CP.

2. State budget funds included in annual development investment expenditure plans of ministries, sectors and provincial-level People’s Committees; proceeds from the sale of bidding dossiers for investor selection; amounts refunded by investors selected to implement projects; and other lawful sources to cover the expenses prescribed at Points a, b and c, Clause 1, Article 5 of Decree No. 15/2015/ND-CP.

Particularly for transport works invested in the PPP form, the sources set aside from project management expenses of project management units under the Ministry of Construction’s Decision No. 1486/QD-BXD of December 12, 2014, announcing norms of expenses for project management units of competent state agencies implementing PPP projects, may be additionally used to cover the expenses prescribed at Points a, b and c, Clause 1, Article 5 of Decree No. 15/2015/ND-CP.

3. Other lawful sources (if any).

4. Ministries, sectors and provincial-level People’s Committees shall establish project management units or assign project management units to carry out activities falling within their responsibilities according to the terms of project contracts; and concurrently allocate funds for project management units to exercise their rights and perform their obligations.

Article 6. Making, approval and assignment of cost estimates

1. Bases for estimation

a/ List of PPP projects approved by a competent authority, or the investor’s project proposal approved by a competent authority and added to this list under Decree No. 15/2015/ND-CP;

b/ Plan on implementation of PPP projects approved by a competent authority;

c/ Investor selection plan approved by a competent authority;

d/ Policies, regimes, criteria and norms under relevant current regulations.

2. Principles of estimation

a/ The expense items prescribed in Clause 1, Article 5 of this Circular must comply with the current regulations on estimation of regular expenses from the state budget;

b/ The expense items prescribed in Clauses 2 and 3, Article 5 of this Circular must comply with the current regulations on estimation of development investment expenses.

3. Making and execution of cost estimates

a/ Ministries, sectors, provincial-level People’s Committees and units tasked to prepare for investment and supervise the performance of project contracts and quality of works shall, pursuant to the Law on the State Budget, the Law on Public Investment, and Clauses 1 and 2 of this Article, make expense estimates by every expense item and according to the funding sources prescribed in Article 5 of this Circular and include such estimates in annual budget estimates of their agencies and units by every funding source, and then submit them to competent authorities for approval under current regulations;

b/ After having their annual budget estimates approved by competent authorities, ministries, sectors and provincial-level People’s Committees shall allocate such estimates to related units for compliance under regulations;

c/ If an additional project is approved in a year, the related competent state agency shall make additional cost estimates and submit them to a competent authority for approval under current regulations;

d/ Competent state agencies shall properly and strictly manage and use the allocated cost estimates.

Article 7. Finalization and handling of revenues

1. Annually, state agencies assigned to manage investment preparation expenses and expenses for supervision of the performance of project contracts and quality of works shall make finalization reports by every funding source and submit them to competent authorities for approval.

The finalized value of expenses from development investment capital shall be included in the finalized value of completed PPP projects.

2. The remainder of the amounts from project preparation expenses which are refunded by selected investors and proceeds from the sale of bidding dossiers (after paying expenses for organization of bidding under regulations) shall be remitted into the state budget.

Article 8. Examination and reporting regimes

1. Every year, on a regular or extraordinary basis, ministries, sectors, provincial-level People’s Committees and finance agencies at all levels shall examine the management and use of investment preparation funds by competent state agencies at the same level or agencies assigned to manage investment preparation expenses and expenses for supervision of the performance of project contracts and quality of works.

2. Biannually and annually, units using investment preparation funds and project implementation funds of ministries, sectors and provincial-level People’s Committees shall report on the use of these funds to same-level finance agencies of ministries, sectors and localities.

Chapter III

MANAGEMENT OF INVESTOR SELECTION EXPENSES

Article 9. Expenses in the course of investor selection

 Expenses in the course of investor selection include:

1. Expense for making dossiers of invitation for prequalification, bidding dossiers and dossiers of requirements.

2. Expenses for appraising dossiers of invitation for prequalification, bidding dossiers and dossiers of requirements.

3. Expense for evaluating dossiers of prequalification participation, bid dossiers and dossiers of proposals.

4. Expense for appraising prequalification results and investor selection results.

Article 10. Norms of investor selection expenses

Norms of investor selection expenses must comply with Article 7 of Decree No. 30/2015/ND-CP.

Article 11. Management and use of investor selection expenses

The management and use of investor selection expenses must comply with the Ministry of Finance’s regulations on management and use of expenses in the course of selection of contractors for projects using state budget funds or government bonds (now Circular No. 190/2015/TT-BTC of November 17, 2015).

Chapter IV

FINANCIAL PLANS OF PPP PROJECTS

Article 12. Principles of making a financial plan

1. All lawful expenses and revenues at the stages of investment preparation, project implementation and project operation shall be denominated in Vietnam dong and shown in a project’s financial plan.

2. Financial criteria of a project shall be calculated based on after-tax cash flows discounted at the weighted average rate.

3. For a project using official development assistance or concessional loans of foreign donors, its financial plan must comply with this Circular.

In case a donor sets regulations different from the provisions of this Circular, a financial plan may comply with such regulations or this Circular if the donor so agrees.

The management and use of official development assistance or concessional loans for implementation of PPP projects must comply with the Government’s current regulations on management and use of official development assistance or concessional loans of donors.

Article 13. Contents of a financial plan

1. Total investment amount.

2. Structure of investment sources:

a/ Equity;

b/ The State’s investment capital as support for construction of works or auxiliary works and for organizing payment of compensations, ground clearance and resettlement as prescribed in Clause 2, Article 11 of Decree No. 15/2015/ND-CP;

c/ Funds raised by investors.

3. Fund raising plan:

a/ Equity:

- Total;

- Fund raising plan;

- Disbursement schedule.

b/ The State’s investment capital as support (if any) prescribed in Clause 2, Article 11 of Decree No. 15/2015/ND-CP:

- Total;

- Funding sources;

- Contents of support;

 - Disbursement schedule.

c/ Raised funds (commercial loans, concessional credit, foreign loans, and other funding sources):

- Total raised funds (by each type of funding source);

- Time of loan borrowing and repayment and grace period (by each type of loan);

- Interest rate for each type of loans and average interest rate;

- Currency of loans and payment exchange rate;

- Conditions to raise funds;

- Necessary expenses for the fund raising (guarantee fee, commitment fee, credit insurance and brokerage);

- Disbursement schedule (by each type of fund);

- Plan on repayment of raised funds (by each type of fund).

4. Proposals on incentives (if any) to ensure implementation of the project’s financial plan.

5. The investor’s equity profit.

6. Implementation duration, operation, capital recovery and profit of the project.

7. Plan on recovery of investment capital and investor’s profit:

a/ Estimated lawful revenues;

b/ Estimated prices and service charge rates;

c/ Estimated turnover from every lawful revenue;

d/ For construction-transfer-lease (BTL) contracts and build-lease-transfer (BLT) contracts, a plan on the State’s payment to the investor is required;

dd/ For BT contracts, a land area with an equivalent value shall be projected for payment to the investor.

8. Criteria for assessing feasibility of a financial plan:

a/ The competent authority shall decide to select an investment project based on the following criteria:

- Net present value (NPV);

- Internal rate of return (IRR);

- Benefit-cost (B/C) ratio;

- Return on equity (ROE) rate;

- Project contract term;

- Sensitivity of the above financial criteria as a result of a change in the total investment amount, operation expense, turnover or project contract term.

b/ Based on specific characteristics of a project, the related state management agency may set additional financial criteria such as debt to equity ratio, debt service ratio, rapid conversion rate for property, solvency ratio, and capital preservation measures under current regulations in order to select an efficient investment project.

Article 14. Total investment amount

1. For a project involving construction activities, its total investment amount covers the total construction investment amount determined under the law on construction investment and initial working capital for commissioning the project according to standards and technical regulations approved by a competent authority.

2. For a project involving no construction investment activities, its total investment amount covers all investment expenses for commissioning the project and project operation expenses during the first year as approved by a competent authority.

3. The State’s investment capital as support for project implementation prescribed in Article 11 of Decree No. 15/2015/ND-CP shall not be included in the total investment amount when determining the equity ratio.

Article 15. Equity

1. Equity of project enterprises

a/ Equity of a project enterprise is equity of the investor that commits to contribute capital according to the charter of such enterprise;

b/ The investor shall ensure the ratio of equity of the project enterprise to the total investment amount as prescribed in Article 10 of Decree No. 15/2015/ND-CP and such ratio shall be stated in the project contract.

2. Equity of investors

a/ An investor’s equity shall be determined based on its/his/her latest annual financial statement audited by an independent audit firm and report on the use of equity at the time it/he/she participates in project implementation. For an institutional investor established in the year, its equity shall be determined based on its financial statement audited by an independent audit firm for the period from the time of its establishment to the time of its participation in the project; at the same time, the owner’s representative, owner or parent company shall make a written commitment to ensuring sufficient equity under the project’s financial plan;

b/ If the investor concurrently participates in different projects, it/he/she shall ensure that the total equity is equal to all amounts of equity it/he/she commits for all these projects under regulations;

c/ The investor shall send to a competent state agency a plan to ensure equity as committed and take responsibility before law for the accuracy and lawfulness of data and documents related to the equity, list of ongoing projects, and distribution of the equity to ongoing projects by the time of project contract negotiation.

Article 16. Raised capital

1. Capital amount raised by the time of project contract negotiation shall be determined based on a written commitment or agreement between the capital provider and investor. The total capital amount committed by the provider must be at least equal to the capital amount which the investor has to raise.

2. Raised capital amount must conform to the project implementation schedule stated in the project contract.

3. The investor or project enterprise shall report to a competent state agency on the capital raising progress stated in the project contract.

Article 17. Loan interests for raising investment capital

1. Loan interests for raising investment capital include the interest on loans borrowed during construction which is included in the project’s total investment amount and the interest on loans borrowed during the project’s commercial operation which is included in the project’s financial plan. Loan interests for raising investment capital shall only be calculated on the capital amount which the investor has to borrow but not on the investor’s equity committed in the project contract.

2. Loan interests shall be calculated from the time of disbursement of the first loan; the loan interest calculation term must not exceed the project implementation duration stated in the project contract. The interest on a raised loan shall be calculated based on the committed loan amount and loan raising progress stated in the project contract.

3. Loan interest rates shall be specified as follows:

a/ In case of bidding for investor selection, the loan interest rate shall be determined based on the bid dossier of the selected investor;

b/ In case of investor appointment, the loan interest rate shall be determined through negotiation and agreement between the competent state agency and investor. The loan interest rate used for reference for the negotiation and agreement must not exceed 1.3 times the simple average rate of the interest rates for 10-year-term government bonds issued through bidding for a period of 3 months before the time of project contract negotiation.

4. The determination of the loan interest rate prescribed at Point b, Clause 3 of this Article serves as a basis for calculating the loan interest rate in the project proposal and feasibility study report to be submitted to a competent authority for approval.

Article 18. Profits of investors

1. In case of bidding for investor selection, an investor’s profit shall be determined based on the investor selection result.

2. In case of investor appointment, an investor’s profit shall be estimated based on the project’s feasibility study report while ensuring the project’s efficiency, and on the result of negotiation between the competent state agency and investor.

The competent state agency shall refer to the average profit level of enterprises doing business in the relevant fields and profits of similar projects against the market prices in the project areas as well as profits of other sectors and fields as a basis for the negotiation with the investor.

3. When necessary, based on specific characteristics of every sector, related ministries and sectors shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, setting profit brackets for PPP projects under their management.

Chapter V

PAYMENT OF THE STATE’S INVESTMENT CAPITAL FOR IMPLEMENTATION OF PPP PROJECTS

Article 19. The State’s investment capital

1. The State’s investment capital and its use for implementation of PPP projects must comply with Article 11 of Decree No. 15/2015/ND-CP.

2. The State’s investment capital used for project implementation shall be specified in the project contract regarding contents of support, capital sources, and payment schedule.

3. The State’s investment capital shall be paid only after the completed construction investment volume has been tested for acceptance. The to-be-paid capital amount must correspond to the ratio of investment capital sources stated in the project contract to the value of completed construction investment volume already tested for acceptance.

Article 20. Payment of the State’s investment capital as support for building project works or auxiliary works and organizing payment of compensations, ground clearance and resettlement

1. Dossier for payment

1.1. Legal dossier for single submission

The agency assigned to manage the State’s capital amount shall send the project’s legal dossier as a basis for payment control to the state treasury office where it opens its account before or at the time of request for initial payment of the State’s capital for project implementation. A dossier must comprise:

a/ Project contract, contract annexes (if any), and legal documents enclosed with the project contract;

b/ Contract between the investor or project enterprise and the contractor or supplier and enclosed documents, such as contract annexes, payment-related specific conditions and general conditions; task assignment paper or internal contract, in case the investor itself/himself/herself implements the project;

c/ Cost estimates and a competent authority’s decision approving cost estimates for each activity or item of the project, in case the investor or project enterprise implements the project without signing a contract. A plan on payment of compensation, ground clearance support and resettlement approved by a competent authority, particularly for compensation, ground clearance support and resettlement work.

1.2. Dossier for payment

a/ In case the project enterprise and investor jointly form a party to the project contract under Point a, Clause 3, Article 31 of Decree No. 15/2015/ND-CP or the investor directly implements a BT project or group-C project under Clause 2, Article 42 of Decree No. 15/2015/ND-CP:

- For activities carried out by the investor or project enterprise under a construction contract signed with the contractor or supplier:

+ Written record of acceptance test of the value of completed volume and table calculating the value of contractual completed volume requested for payment, made by the investor according to Appendix No. 01. If an additional volume arises outside the contract, the investor shall make a written record of acceptance test of the value of this volume and a table calculating such value requested for payment according to Appendix No. 02;

+ Written request for payment of investment capital for completed volume, made by the agency assigned to manage the State’s investment capital used for implementation of PPP projects according to Appendix No. 03;

+ Money transfer document, issued under the Ministry of Finance’s regulations on accounting documents.

- For activities carried out by the investor or project enterprise without signing a contract:

+ Written record of acceptance test of the value of completed volume;

+ Approved cost estimates for each activity;

+ Written request for payment of the investment capital for completed volume, made by the agency assigned to manage the State’s investment capital used for implementation of PPP projects according to Appendix No. 03;

+ Money transfer document, issued under the Ministry of Finance’s regulations on accounting documents.

b/ In case the competent state agency or investor issues a document permitting the project enterprise to take over and exercise and perform the rights and obligations of the investor as stated in the investment registration certificate and project contract under Point b, Clause 3, Article 31 of Decree No. 15/2015/ND-CP:

- For activities carried out by the project enterprise under a construction contract signed with the contractor or supplier:

+ Written record of acceptance test of the value of completed volume and table calculating the value of contractual completed volume requested for payment, made by the investor according to Appendix No. 01. If an additional volume arises outside the contract, the investor shall make a written record of acceptance test of the value of this volume and a table calculating such value requested for payment according to Appendix No. 02;

+ Written request for payment of the investment capital for completed volume to the project enterprise, made by the agency assigned to manage the State’s investment capital used for implementation of PPP projects according to Appendix No. 03;

+ Money transfer document, issued under the Ministry of Finance’s regulations on accounting documents.

- For activities carried out by the project enterprise without signing a contract:

+ Written record of acceptance test of the value of completed volume;

+ Approved cost estimates for each activity;

+ Written request for payment of the investment capital for completed volume, made by the agency assigned to manage the State’s investment capital used for implementation of PPP projects according to Appendix No. 03;

+ Money transfer document, issued under the Ministry of Finance’s regulations on accounting documents.

1.3. Time limit for payment of the State’s investment capital

a/ Annual plan on allocation of funds as the State’s investment capital used for the project implementation only covers payment for the completed volume tested for acceptance under regulations (by December 31 of the plan year); the time limit for payment for the completed volume must comply with regulations (through January 31 of the subsequent year);

b/ If the State’s investment capital has not yet been fully paid in the plan year, the competent state agency shall report such to the competent authority for allowing extension of the project implementation and capital payment duration under regulations.

2. Advance payment and payment of the State’s investment capital as support for the activities prescribed at Point c, Clause 2, Article 11 of Decree No. 15/2015/ND-CP

a/ In case the State’s investment capital is provided for carrying out all activities of building auxiliary works and organizing payment of compensation, ground clearance and resettlement:

The dossier and documents for advance payment and payment of capital for a project to serve the paying agency’s capital control and payment; contents of advance payment and payment for completed volume; the State Treasury’s payment control principles; and the time limits for advance payment and payment must comply with the Ministry of Finance’s regulations on management and payment of investment capital and amending or supplementing documents (if any).

b/ In case the State’s investment capital is provided for carrying out part of activities of construction of building auxiliary works and organizing payment of compensation, ground clearance and resettlement: The order, procedures, dossier and time limit for payment must comply with Articles 19 and 20 of this Circular.

Article 21. Payment of investment capital to investors under BTL, BLT and similar contracts

1. Payment principles

a/ The payment of the State’s investment capital to an investor providing services under BTL, BLT or other similar contracts as prescribed at Point b, Clause 2, Article 11 of Decree No. 15/2015/ND-CP must comply with the project contract signed between the competent state agency and investor and regulations on management and payment of investment capital from the state budget.

Payment conditions, to-be-paid capital amount, time of payment, payment time limit, and payment dossier shall be stated in the project contract.

b/ The State’s investment capital shall be paid from the time the services are provided as agreed in the project contract. The payment shall be made periodically on the basis of volume and quality of services as agreed in the project contract.

2. Dossier for payment:

a/ Legal dossier for single submission

The agency assigned to manage the State’s investment capital shall send to the state treasury office where it opens its account a legal dossier for use as a basis for payment control. Such dossier must comprise the project contract, contract annexes and legal documents enclosed with the project contract.

b/ Dossier for payment

- Written record calculating the volume and quality of services, made by the investor or project enterprise;

- Written request for payment of investment capital (certified by the unit assigned to manage the project that is attached to the competent state agency);

- Money transfer document, issued under the Ministry of Finance’s regulations on accounting documents.

c/ Time limit for annual payment of the State’s investment capital

The annual capital plan covers payment of the State’s investment capital for the project through December 31 of the plan year (or must comply with regulations of the competent authority if this authority allows extension of the project implementation and capital payment duration under regulations).

Article 22. Finalization of the State’s investment capital used for project implementation

1. The state agency assigned to manage the State’s investment capital shall make a report finalizing the State’s capital amount as support for construction of auxiliary works and organization of payment of compensation, ground clearance and resettlement; and submit this report to a competent authority for verification and approval for use as a basis for finalizing the completed project.

2. The state agency assigned to manage the State’s investment capital shall include annual expenses from the State’s investment capital used for carrying out the activities prescribed at Points a and b, Clause 2, Article 11 of Decree No. 15/2015/ND-CP in the finalization of completed projects under the Ministry of Finance’s regulations.

Article 23. Examination and reporting regimes

1. Annually, periodically or extraordinarily, ministries, sectors, provincial-level People’s Committees and finance agencies at all levels shall examine the management and use of the State’s investment capital for implementation of PPP projects.

2. Quarterly, investors and project enterprises shall report on the use of the State’s investment capital for implementation of PPP projects to agencies assigned to manage the State’s investment capital.

Chapter VI

FINALIZATION OF WORKS OF COMPLETED PPP PROJECTS

Article 24. Finalization principles

After a completed PPP project having construction components is tested for acceptance, handed over and commissioned, its investment capital for construction of works shall be finalized under the Ministry of Finance’s Circular No. 09/2016/TT-BTC of January 18, 2016, on finalization of state-funded completed projects, and this Circular.

Article 25. Making, submission and approval of finalization reports

1. Agency making finalization reports: the project owner, or investor in case no project enterprise is established.

2. Dossier submitted for approval of finalization reports (with one set submitted to the agency verifying and approving finalization reports): to comply with the Ministry of Finance’s Circular on finalization of state-funded completed projects, project contract and contract annexes.

3. Competence to approve finalization reports: ministers, heads of ministerial-level agencies, chairpersons of provincial-level People’s Committees, or chairpersons of district-level People’s Committees in case they are authorized by provincial-level People’s Committees to sign and perform project contracts.

4. Agencies verifying finalization reports:

a/ Functional units under ministries or sectors shall verify finalization reports of projects managed by ministries or sectors;

b/ Provincial-level Finance Departments shall verify finalization reports of projects managed by provincial-level People’s Committees;

c/ District-level Finance-Planning Divisions shall verify finalization reports of projects with their contracts signed and performed by district-level People’s Committees.

5. Audit of finalization reports

Competent state agencies shall agree with investors on selecting capable and experienced independent audit firms to audit the value of investment capital for construction of project works.

6. Contents of verification of finalization reports must comply with the Ministry of Finance’s Circular on finalization of state-funded completed projects.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 26. Effect

This Circular takes effect on May 5, 2016, and replaces the Ministry of Finance’s Circular No. 166/TT-BTC of November 17, 2011, on management and use of project preparation expenses and operating funds of competent state agencies during project management; financial criteria of a project contract; conditions for and methods of making payment to investors performing BT projects; and finalization of the value of works of BOT, BTO or BT projects.

Article 27. Transitional provisions

1. For project proposals and feasibility study reports approved before the effective date of this Circular, competent state agencies shall, pursuant to this Circular, review and adjust their financial plans for carrying out subsequent steps.

2. For project contracts under negotiation and not yet signed by the effective date of this Circular, competent state agencies shall, pursuant to this Circular, review, adjust and update relevant terms of project contracts.

3. Project contracts and contract annexes signed before the effective date of this Circular shall continue to be performed.

4. Ministries, sectors and provincial-level People’s Committees shall report other cases in writing to the Ministry of Finance for study and guidance.