Thông tư 86/2019/TT-BTC

CIRCULAR

PROVIDING GUIDANCE ON DETERMINATION OF STARTING PRICES FOR AUCTION OF LEASING OR DEFINITE-TERM TRANSFER OF RIGHT TO OPERATE ROAD INFRASTRUCTURE ASSETS INVESTED AND MANAGED BY THE STATE

Pursuant to the pricing law No. 11/2012/QH13 dated June 20, 2012 and its instructional documents;

Pursuant to the Law No. 15/2017/QH14 on management and utilization of public assets dated June 21, 2017;

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

Pursuant to the Government’s Decree No. 33/2019/ND-CP dated April 23, 2019 on management, use and utilization of road infrastructure assets;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director of the Price Management Department;

The Minister of Finance promulgates this Circular providing guidance on determination of starting prices for auction of leasing or definite-term transfer of right to operate road infrastructure assets invested and managed by the State.

Article 1. Scope

This Circular provides guidance on determination of starting prices for auction of leasing or definite-term transfer of right to operate road infrastructure assets invested and managed by the State.

Article 2. Regulated entities

1. Lessees or transferees that are enterprises leasing or receiving definite-term transfer of right to operate road infrastructure assets invested and managed by the State in accordance with the Government’s Decree No. 33/2019/ND-CP dated April 23, 2019 on management, use and utilization of road infrastructure assets.

2. Lessors or transferors that are authorities assigned to manage road infrastructure assets invested and managed by the State in accordance with the Government’s Decree No. 33/2019/ND-CP dated April 23, 2019 on management, use and utilization of road infrastructure assets.

3. Other relevant organizations and individuals.

Article 3. Rules for determining starting prices for auction of leasing or definite-term transfer of right to operate road infrastructure assets

1. Ensure adequate funding for covering reasonable and allowable expenditures incurred in reality so as to form and manage infrastructure assets in conformity with the Government’s social - economic development policies or guidelines in each period.

2. Correspond to market prices of assets of the same type or of same technical standards and/or quality at the time of leasing or transfer and leasing or transfer purposes.

3. Correspond to technical regulations, standards, expenditure levels, technical and economic norms adopted by competent state authorities.

Article 4. Determination of starting prices for auction of leasing of right to operate road infrastructure assets

1. The starting price for auction of leasing of the right to operate the road infrastructure asset is the lowest price an auction of leasing of the right to operate road infrastructure assets begins with.

2. The starting price for auction of leasing of the right to operate the road infrastructure asset shall be determined on the basis of the market rent of asset of the same type or of same technical standards and/or quality at the time of leasing and of same leasing purposes; of estimated revenues and expenditures incurred when operating the asset during the leasing period in case the asset of the same type or of same technical standards and/or quality at the time of leasing and of same leasing purposes is not available for comparison.

3. The starting price for auction of leasing of the right to operate road infrastructure asset specified in this Article shall be determined by adopting valuation method or price appraisal methods included in Vietnam’s valuation standard system announced by the Ministry of Finance, provided that at least two (02) different methods for each asset shall be submitted to the Ministry of Transport or provincial People's Committee for consideration and decision.

4. Based on characteristics and specific supply and market conditions of the asset whose starting price needs to be determined, the Ministry of Transport or provincial People's Committee shall propose and assume responsibility for the selected valuation or price appraisal methods included in Vietnam’s valuation standard system announced by the Ministry of Finance in conformity with the asset and provisions of the Government’s Decree No. 33/2019/ND-CP dated April 23, 2019 and guidance herein.

If different valuation or price appraisal methods are adopted, the authority or unit responsible for determination of starting price should evaluate and clearly point out which method will be the main method and which method will be employed to check or verify valuation results, and then carry out analysis, computation and suggestion of the starting price for auction of leasing of right to operate road infrastructure asset.

5. If the Ministry of Transport or provincial People's Committee decides to employ one valuation or price appraisal method, reasons and actual evidences thereof must be given.

Article 5. Determination of starting price for auction of definite-term transfer of rights to operate road infrastructure assets

1. A starting price for auction of definite-term transfer of the right to operate road infrastructure asset is the lowest price that an auction of definite-term transfer of the right to operate road infrastructure asset begins with (excluding costs of maintenance of that asset).

2. A starting price for auction of definite-term transfer of the right to operate road infrastructure asset shall be determined on the basis of the residual value of the asset at the time of transfer according to the re-evaluation, traffic volume (if the asset is road), the remaining depreciation time of the asset, additional investment, estimated revenues and expenditures incurred when operating the asset during the transfer period.

Where:

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

b) Additional investment value is the value of investment made by the transferee of definite-term transfer of rights to operate road infrastructure asset in the transferred project according to the planning approved by a competent authority in accordance with law regulations on investment and relevant laws.

c) Traffic volume (if the asset is road), estimated revenues and expenditures incurred when operating the asset during the transfer period shall be determined according to proposal of the Ministry of Transport or provincial People's Committee that shall ensure the conformity of determined values with specific characteristics, properties as well as supply and market conditions of each asset.

d) Other reasonable and allowable expenditures (if any):

d1) Repayment of loan principal and interest shall be determined according to terms and conditions of specific loan agreement or loan facility for the purposes of investment and construction of road infrastructure assets. In case the repayment of loan principal and interest is included in the asset’s value, this repayment amount must be deducted from the residual value of the asset.

d2) Costs of management and operation of the asset by the transferee shall be determined for each type of asset during the transfer period, including:

- Managerial staff expenditures, including payments made to managers such as salaries, allowances, social insurance, health insurance and unemployment insurance contributions and premiums, and trade union fees. Salaries of managers shall be determined in accordance with law regulations on salaries and relevant legislative documents in corresponding with each type of road infrastructure asset.

- Costs of materials serving the performance of managerial duties, including office supplies, repair of fixed assets, machinery, equipment, working instruments and devices, etc.

- Costs of management equipment in office.

- Depreciation of fixed assets such as buildings, warehouses, structures, means of transport, transmission equipment, management machinery and equipment in offices (if any).

- Taxes, fees and charges as regulated by law.

- Land rents (if any).

- Costs of services from external suppliers serving managerial staff such as electricity, water, telephone, etc.; costs of consulting services, surveys and formulation of leasing or transfer plan (if any).

- Other cash expenses other than the aforementioned expenses such as convention expenses, business trip expenses, traveling expenses, expenditures on female workers, fees for attending conventions and other reasonable and allowable expenses incurred during the management of road infrastructure asset.

In case any cost items of management and operation of the asset are stipulated in technical – economic norms or policies promulgated by competent authorities or applicable laws (such as law on taxation, law on accounting, law on statistics and relevant laws), and have prices set by the Government, these regulations shall prevail; otherwise, the head of the authority or unit in charge of managing and operating the asset shall consider giving approval for determined cost items and assume responsibility for such approval.

If any cost item concerns different products, tasks or duties which cannot be separated such as depreciation of assets, salaries, social insurance, health insurance and unemployment insurance contributions or premiums, trade union dues, cost of management and operation of the asset, etc., they should be aggregated and distributed to each product or task according to relevant criteria and characteristics in conformity with applicable law regulations.

3. After determining the starting price for auction of definite-term transfer of the right to operate road infrastructure asset by adopting the methods prescribed in Clause 2 Article 5 hereof, based on specific characteristics and properties as well as supply and market conditions of each asset of which the starting price needs to be determined, the Ministry of Transport or provincial People’s Committee shall select an additional valuation method or price appraisal method included in Vietnam’s valuation standard system announced by the Ministry of Finance that it is deemed to be conformable with the asset and consistent with the Government’s Decree No. 33/2019/ND-CP dated April 23, 2019 and provisions herein.

If different valuation or price appraisal methods are adopted, the authority or unit responsible for determination of starting price should evaluate and clearly point out which method will be the main method and which method will be employed to check or verify valuation results, and then carry out analysis, computation and suggestion of the starting price for auction of definite-term transfer of the right to operate road infrastructure asset.

4. If the Ministry of Transport or provincial People's Committee decides to employ one valuation or price appraisal method, reasons and actual evidences thereof must be given.

Article 6. Implementation organization

1. This Circular comes into force as from January 20, 2020.

2. If the legislative documents referred to in this Circular are amended, supplemented or superseded, the new ones shall apply.

3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration.