Decision No. 4907/QD-BGTVT dated December 24, 2014, approving project " mobilization of private sector investment in railway infrastructure"

DECISION

APPROVING PROJECT " MOBILIZATION OF PRIVATE SECTOR INVESTMENT IN RAILWAY INFRASTRUCTURE"

THE MINISTER OF TRANSPORT

Pursuant to the Law on Railways in 2005

Pursuant to the Law on Investment in 2005

Pursuant to the Government’s Decree No. 108/2009 / ND-CP dated November 27, 2009 on investment in the form of BOT, BTO and BT contracts and the Government’s Decree No. 24/2011 / ND-CP dated April 5, 2011, amending a number of articles of Decree No. 108/2009 / ND-CP;

Pursuant to the Government’s Decree No. 107/2012 / ND-CP dated December 20, 2012 defining the functions, tasks, entitlements and organizational structure of the Ministry of Transport;

Pursuant to the Prime Minister’s Decision No. 355 / QD-TTg dated February 25, 2013 on approving the adjusted strategy for Vietnam’s transport development towards 2020, and the orientation towards 2030;

At the request of the Director of the Vietnam Railway Administration and Head of the Investment the management board of projects of public - private,

DECISION

Article 1. Approving project " mobilization of private sector investment in railway infrastructure" ( hereafter referred as project) shall be as follows:

1. Viewpoints and targets

1.1. Viewpoints and general targets

- Contribute to the successful implementation of Resolution No. 13-NQ / TW dated 16/01/2012 in 4th conference of the 11th Central Executive Committee of Communist Party on constructing system of synchronous infrastructure aiming to our country become a modern-oriented industrial country in 2020.

- Radically and effectively mobilize all resources other than the state budget to invest in development of the infrastructure of railway, gradually reduce the burden on the state budget, and meet the target of socio-economic development, industrialization - modernization of the country. Ensure compliance with all policies and guidelines of the Party, the Government, the Ministry of Transport and practical requirements set out in the restructuring of the sector reform that shall focus on restructuring the investments, the transport and the State-owned enterprises in the transport sector.

- Restructure the railway sector investment, enhance private sector involvement investment ratio in the railway infrastructure commensurating with other transport fields.

1.2. Specific targets

- Assess the reality of mobilization of the resource in investment, development the railway infrastructure.

- Propose the solutions, mechanisms and policies to mobilize all resources other than the budget of business and development investment of the railway infrastructure.

- Propose the list of projects, works that need private sector involvement and schedule.

2. Orientation for mobilization of private sector investment in railway infrastructure"

 Seek private sector involvement in investment in railway infrastructure shall be under the following principles: The state shall focus on the investment in construction of railway infrastructure items which directly serve the train operation; other items like: stations, station depots, station platforms, freight yards and other supportive services will be invested, operated and developed in association with the private sector.

2.1. For existing railway infrastructure systems

Private sector involvement in operation and development the railway construction shall be as follows

- For terminals: Attract investors in construction, renovation, upgrade, and expansion of terminals in order to operate them in cooperation.

- For station depots, freight yards and service areas: Attract investors in construction, renovation, upgrade, and expansion. The investors shall be responsible for construction maintenance and entitled to operate the constructions for a certain period of time.

- Effectively develop the land fund for railway.

b) Grant franchise for railway route operation.

Select railway routes or segments suitable for pilot franchise for railway operation, which is the basis for improvement of franchise for other railway routes. Depend on the extent of the franchise, investors shall be entitled to operate and develop the railway infrastructure for a certain period of time and be responsible for the infrastructure maintenance; ensure safety for train operation and social security on the routes. Grant franchise for operation shall be flexible and specific for each segment and each route.

2.2. For newly built railway infrastructure systems

Call for and attract the investment in the construction of a part or the whole project in the form of public-private partnerships (PPP), built - owned - operate - transfer (BOOT) ... on the base of the mechanism and supportive policies of the State (taxes, fees, interest, loan term, rate, ...); the capital of the State involved in premises clearance, the investment capital of work items directly involved in the train operation.

(The list of projects called for private sector investment shall be provided in Appendix 1 of this Decision)

3. Solution for mobilization of private sector investment in railway infrastructure"

3.1. Solutions for legislative document system

Proposals for amending and supplementing one law and one decree shall be as follows:

1. Amend and supplement a number of articles of the Law on Railways: Specifically supplement the provisions on granting franchise the railway infrastructure development operation and management rights; Amend and supplement the provisions on the rents for railway infrastructure which shall replace the provisions on use fee of the railway infrastructure and fee of providing the service of operating railway transport on the national railway constructed by the State.

2. Build up and promulgate a new decree on the management, use and develop the national railway infrastructure property constructed by the state, in order to closely manage and efficiently develop the rail infrastructure and increase capital sources serving the maintenance and development of railway infrastructure property. Which shall include the mandate to manage and maintain the collector road system along the rail constructed by the State?

3.2. Solution of mechanisms and policies

Proposals for amending and supplementing one decision of the Prime Minister; one Circular, one Decision of the Minister of Finance and the provisions shall be as follows:

1. Amend and supplement the Prime Minister’s Decision No. 84/2007 / QD-TTg dated June 11, 2007 on the charge’s method and level of the rents for the national railway constructed by the State, under the direction:  

- The rents for railway infrastructure shall be depended on the level of actual use, instead of the current charge based on the turnover of transport enterprises under the contents of the Law on Railway (as amended).

- Strengthen inspection and supervision of state agencies to improve the business efficiency of national railway infrastructure invested by the state (in the direction of strengthening the competitiveness of the lease of railway infrastructure and being implementated or monitored by the state agencies).

2. Amend and supplement the Minister of Finance’s Circular No. 21/2008 / TT-BTC dated March 04, 2008, guiding the collection methods, fees and rents for the national railway infrastructure invested by the State in accordance with the Prime Minister’s Decision No. 84/2007 / QD-TTg dated June11, 2007 in the direction of strengthening the competitiveness of the lease of rail infrastructure to increase revenues for the State budget; ensure the publicity, transparency and strengthen the inspection and supervision of state agencies.  

3. Amend and supplement the Minister of Finance’s Decision No. 1129 / QD-BTC dated May 27, 2014, defining the minimum rent for the national railway infrastructure invested by the State in the direction that the minimum charge must conform with the of each regional market and be adjusted each year.  

4. Promulgate provisions and guidelines in implementing the sample project contract and investment for PPP rail infrastructure projects.

(The list of legal documents amended, supplemented or newly promulgated shall be provided in Appendix 2 of this Decision)

3.3. Solutions for management innovation

- Continue to promote the implementation of the project of comprehensive innovation the State management of Vietnam Railway Administration and the project of restructuring Vietnam Railway Corporation on the correct route and quality assurance.

- Review and arrange the existing railway infrastructure, assign the railway infrastructure business enterprises to manage and operate in order to ensure the consistency in management and business of the railway infrastructure, increase efficiency of operation and development commensurating with the size and value of the property and advantages of such transport support works.

3.4. Solution for private sector investment in railway transport operation.

- Promote the organizational separation between infrastructure business enterprises and railway transport business enterprises to ensure a fair competitive environment, do not discriminate in rail transport business, encourage investors to invest in the field of railway transport business.

- Call for private sector investment in locomotives, compartments to promote the efficiency in rail infrastructure investment. Encourage the domestic or foreign-invested business enterprises, railway industry organizations to invest or associate to invest in new production of locomotives, compartments and in the rail transport development and business.

3.5. Solution for planning, plan and organizing the implementation

- Accelerate the implementation of the adjusted strategy for development of Vietnam railway transport up to 2020 with a vision toward 2050 on which completing the adjusted master plan on development of Vietnam's railway transportation up to 2020, with a vision toward 2030 shall be based so that the competent authorities shall approve the detailed master plan to modernize north – south railway lines.

- Review, assess the situation and use purpose of current land for railway and plan the use of land fund for the construction of railways, land allocated to the railway enterprises for management; determine land use rights for railway.

- Plan the system of passenger terminals, cargo terminals to take advantage of the premises of the unused goods yards within the land for the railway, make a list to call for investment in such works.

4. Organization of implementation

4.1. Vietnam Railway Administration shall:

a) Take charge to advise the establishment of an implementation direct board of the project of private sector investment in rail infrastructure, including:

Its head is the Deputy Minister of Transport; the deputy heads are: PPP Leaders, Leader of Vietnam Railway Administration; Members are leader representatives of the related departments and the Corporation of Vietnam Railway.

b) Take charge to propose the plan of inspecting and reviewing the system of legal documents related to the private sector investment in railway infrastructure; develop the documents under the approval decision of the Ministry of Transport.

c) Take charge to propose the list of programs and projects calling for private sector investment and request the Ministry of Transport. Organize the implementation the programs and projects of private sector investment in railway infrastructure for the new railway routes

d) Develop regulations and guidances for implementing the sample project contract and investment for railway infrastructure sector PPP projects.

4.2. Vietnam Railway Administration shall :

a) Take charge to complete the project of management, development and business of the national rail infrastructure.

b) Cooperate with Vietnam Railway Administration to propose the list of programs and projects calling for private sector investment.

c) Organize the implementation the programs and projects of private sector investment in railway infrastructure for the existing works and railway routes under the hierarchy and mandate by the Ministry of Transport Coordinate with the central-affiliated cities and provinces in planning of infrastructure development in the existing station to call for private sector investment.

4.3. Related Departments under the Ministry

a)The investment management board of public - private projects shall.

- Take charge to advise, monitor the implementation of the project; review, report and propose to the leader of the Ministry of Transport for solving difficult problems arising.

- Take charge to advise and review the mechanisms and policies to request the Government, ministries and regulatory bodies for consideration and settlement.

- Take charge to advise the Ministers of departments or coordinate with ministries and regulatory bodies to promulgate provisions guiding the implementation of the sample project contract and investment for railway infrastructure sector PPP projects  

- Take charge to advise to request the Minister to approve the list of projects calling for investment in the form of PPP.

b) Legal Department shall: Take charge to advise to request the leader of the Ministry of Transport to approve the plan of inspecting, reviewing and systematizing of legal documents related to the private sector investment in railway infrastructure requested by the Department of Vietnam Railway.

c) Finance Department shall : Take charge to advise the legal documents so that the Ministry of Transport shall request the Government, the Ministry of Finance to amend and supplement the contents related to property and charge related to the railway infrastructure and other relevant contents.

d) Planning – Investment Department shall:

- Take charge to advise the development of the content related to planning and strategy in the railway infrastructure.

- Take charge to advise the including the State capital on support PPP projects.

e) The Department, Ministry inspection, Ministry office, Department of Construction Management and Quality of transport works and relevant agencies and units within the functions and duties assigned to implement the viewpoints and targets and coordinate the implementation of the tasks specified in Appendix 1 and Appendix 2 of the Decision

Article 2. This Decision takes effect after the date of signing.

Article 3. The Chief of the Ministry Office, the Chief Inspector of Department, the Directors, Heads of Investment Management Board of public – private projects, the Director of Vietnam Railway Administration, Department of Construction Management and Quality of transport works, General Director of the Vietnam Railway Corporation and heads of agencies and units under the Ministry of Transport shall implement this Decision

APPENDIX 1:

PROPOSAL LIST OF RAILWAY PROJECTS FOR PRIVATE SECTOR INVOLVEMENT.
(Enclosed with the Minister of Transport’s Decision No. 4907 / QD-BGTVT dated December 24, 2014)

APPENDIX 2:

LIST OF LEGAL DOCUMENTS REQUIRED TO AMEND OR SUPPLEMENT OR NEWLY ISSUE
(Enclosed with the Minister of Transport’s Decision No. 4907 / QD-BGTVT dated December 24, 2014)

Notes: Based on the contents of Appendix 1 and Appendix 2, agencies, units shall research and register a specific time in program of building annual legal documents, proposals, projects of Ministry of Transport.