DECISION No. 228/2003/QD-TTg OF NOVEMBER 6, 2003 ON THE EXPERI-MENTAL LEASE OF CAI LAN PORT BERTH INFRASTRUCTURE FOR MANAGEMENT AND EXPLOITATION

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 30, 1990 Maritime Code of Vietnam;

Pursuant to the Prime Minister's Decision No. 202/1999/QD-TTg of October 12, 1999 approving the overall plan on the development of Vietnam's seaport system till 2010;

At the proposal of the Ministry of Communications and Transport (Report No. 3248/TTr-BGTVT of July 30, 2003) and the opinions of the Ministry of Justice (Official Dispatch No. 628/BTP-PLQT of September 1, 2003),

With a view to efficiently using Cai Lan port berth infrastructure; contributing to recovering investment capital and raising the State's revenue source; helping enterprises to be active and take self-responsibility in the commercial exploitation of seaports; and laying grounds for the formulation of legal documents on the mechanisms for investment in, as well as construction and exploitation of, seaports throughout the country,

DECIDES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope and subjects of application

1. This Decision prescribes principles for the experimental lease of Cai Lan port berth infrastructure for management and commercial exploitation.

2. This Decision shall apply to the lessor, the lessee, as well as organizations and individuals involved in the management and exploitation of Cai Lan port berth infrastructure.

Article 2.- Interpretation of terms

In this Decision, the following terms and phrases shall be construed as follows:

1. "Lease contract" means the document signed between the lessor and the lessee for the management and exploitation of Cai Lan port berth infrastructure.

2. "Leased property" means Cai Lan port berth infrastructure defined in Clause 1, Article 3 of this Decision.

3. "Rental" means the money amount to be paid in each period by the lessee to the lessor for the right to manage and exploit Cai Lan port berth infrastructure.

4. "Lease term" means the period starting from the time when the lessor assigns Cai Lan port berth infrastructure to the lessee for management and exploitation till the time when the lessee returns such port berth infrastructure.

5. "Cai Lan port project" means the investment project on the construction of Cai Lan port, approved by the Prime Minister in Decision No. 483/QD-TTg of July 25, 1996.

Article 3.- Cai Lan port berth infrastructure

1. Cai Lan port berth infrastructure prescribed in this Decision includes: port berth No. 5, port berth No. 6, port berth No. 7, port water, offices, warehouses, yards, workshops, water- and electricity-supply systems, and intra-port roads, which belong to Cai Lan port project.

2. Cai Lan port berth infrastructure is invested and built with the State budget capital and belongs to the State's ownership with Vietnam Maritime Bureau acting as the owner's representative.

Article 4.- Equipment, machinery and facilities of Cai Lan port project

1. All cargo-handling equipment, ashore cargo transportation means; waste-gathering and -treating barges, towing ships and other equipment already invested under Cai Lan port project are the property capital assigned by the State.

2. The Ministry of Finance shall assign the property capital defined in Clause 1 of this Article to Quang Ninh port under Vietnam National Shipping Lines according to current regulations.

3. Quang Ninh port shall have to manage, exploit and preserve its assigned capital and assets according to regulations.

Chapter II

HIRING AND LEASING CAI LAN PORT BERTH INFRASTRUCTURE

Article 5.- Contract on the lease of Cai Lan port berth infrastructure for management and exploitation

1. The hire and lease of Cai Lan port berth infrastructure shall be effected through a lease contract.

2. The lease contract must ensure the major principles prescribed in Article 9, Article 10 and Article 11 and be approved by the competent agency defined in Article 8 of this Decision.

Article 6.- The Lessor

1. To assign Vietnam Maritime Bureau under the Ministry of Communications and Transport, which is the owner's representative, to act as the lessor to sign the lease contract with the lessee.

2. Vietnam Maritime Bureau shall, in the capacity as the lessor, have the following tasks and powers:

a/ To lease the property according to the lease contract and relevant law provisions;

b/ To manage rentals paid by the lessee and remit them into the State budget;

c/ To inspect and supervise the management, exploitation, repair and maintenance of the leased property by the lessee in order to ensure that such property is used for the right purposes and according to its technical properties as prescribed;

d/ To inspect and supervise the application of measures to ensure maritime safety, prevent and fight fires and explosions and prevent environmental pollution according to law provisions by the lessee;

e/ To carry out the irregular repair of Cai Lan port berth infrastructure and perform other tasks falling beyond the lessee's responsibility;

f/ To be permitted to use a part of the rentals for the performance of tasks to be done by the lessor according to the Finance Ministry's regulations;

g/ To consider and satisfy the lessee's need for the renovation or expansion of the leased property's items according to law provisions;

h/ To exercise other rights and fulfill other obligations of the owner according to law provisions.

Article 7.- The lessee

1. To designate Quang Ninh port under Vietnam National Shipping Lines to act as the lessee for the management and exploitation of the leased property and sign the lease contract with the lessor.

2. The lessee, which is Quang Ninh port, shall have the following tasks and powers:

a/ To manage and exploit the leased property in strict accordance with the lease contract and relevant law provisions;

b/ To pay rentals as prescribed in the lease contract;

c/ Not to change the technical properties of Cai Lan port berth infrastructure without the lessor's written consent;

d/ To carry out the periodical repair and regular maintenance of Cai Lan port berth infrastructure;

e/ To dredge and maintain the water in front of berths already leased in order to ensure its depth as announced by competent agencies;

f/ To apply measures to ensure maritime safety, prevent and fight fires and explosions and prevent environmental pollution;

g/ Not to let the leased property be lost or damaged and to ensure its good working conditions;

h/ To employ to the utmost local labor in the course of management and exploitation of Cai Lan port berth;

i/ To be allowed to register and publicize its trademark for the exploitation of the leased property;

j/ To be allowed to collect charges for service provision according to law provisions;

k/ To be allowed to additionally invest in equipment, machinery and facilities in order to raise the exploitation efficiency. In cases where the equipment and/or machinery are affixed to, or cause changes in, Cai Lan port berth infrastructure, the investment thereon must be approved in writing by the lessor and carried out according to current regulations on construction and investment management;

l/ To exercise other rights and fulfill other obligations according to law provisions.

Article 8.- Agency approving the lease contract

The Ministry of Finance shall be the agency that approves the lease contract after obtaining written agreement of the Ministry of Communications and Transport.

Chapter III

MAJOR PRINCIPLES OF THE LEASE CONTRACT

Article 9.- Lease charge

1. The grounds for calculating the rental shall include the following elements:

a/ The capital invested in the construction of Cai Lan port berth infrastructure, which are settled by the time the works are put into use, taking into account the lease term, capital-borrowing term, grace period, loan interest rate and the repair and maintenance of Cai Lan port berth infrastructure;

b/ Geographical advantages of the port berth as well as practical situation of the market during the performance of the lease contract;

c/ The assurance of the State budget capital recovery percentage and the lessee's profits from the commercial exploitation of the port berth.

2. The rental shall be specified in the lease contract.

3. The rental shall be adjusted once every 05 years or in cases where market price fluctuation or inflation rate is recorded at 10% or more in a year.

Article 10.- Payment mode and term

The payment mode and term shall be specifically decided in the lease contract.

Article 11.- Lease term

The lease term shall comply with the lease contract with the maximum duration of 25 years as from the date the leased property is handed over to the lessee under the lease contract.

Article 12.- Adjustment of the lease contract

During the lease term, the lease contract may be adjusted but in compliance with the principles defined in Article 9, Article 10 and Article 11 of this Decision.

The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Communications and Transport in, stipulating the order and procedures for adjustment of the lease contract.

Chapter IV

IMPLEMENTATION ORGANIZATION

Article 13.- Responsibilities of concerned agencies

1. The Ministry of Communications and Transport

a/ To inspect and supervise the experimentation;

b/ Annually, to assume the prime responsibility for, and coordinate with the Ministry of Finance, the Ministry of Planning and Investment, the People's Committee of Quang Ninh province and concerned agencies in, evaluating and reporting on the experimentation results to the Prime Minister.

c/ The Minister of Communications and Transport shall have to consider and settle any problems arising in the course of experimentation according to his/her competence and to report on matters which fall beyond his/her competence to the Prime Minister for consideration and settlement.

d/ The Ministry of Communications and Transport shall, basing itself on the experimentation situation, assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned agencies in, taking initiative in evaluating and reporting on the experimentation results to the Prime Minister. If the experimentation's purposes and requirements are attained, to report thereon to the Prime Minister for the latter to consider the termination of the experimentation and permit the application of this Decision to other seaports.

In cases where the experimentation fails to achieve its purposes and requirements, to report thereon to the Prime Minister for the latter to consider and decide on the suspension of the experimentation and the application of appropriate measures so as to efficiently manage and exploit Cai Lan port berth infrastructure.

e/ To direct Vietnam Maritime Bureau to perform the State management functions at the seaport with a view to creating conditions for the fruitful experimentation.

2. The Ministry of Finance:

a/ To inspect and supervise the payment and settlement of amounts paid under the lease contract already approved;

b/ To guide the lessor and the lessee to perform payment operations according to this Decision and other relevant law provisions;

c/ To perform other tasks prescribed in this Decision.

3. The Ministry of Planning and Investment:

To coordinate with the Ministry of Finance and the Ministry of Communications and Transport in synthesizing and evaluating the economic efficiency of the lease, including the repayment of borrowed capital according to regulations.

4. The People's Committee of Quang Ninh province:

To coordinate with the Ministry of Communications and Transport, the Ministry of Finance and concerned agencies in supervising the lease process, to create all favorable conditions for the lessee and the lessor so as to obtain good results in the management and exploitation of the infrastructure, equipment and facilities of Cai Lan port project.

5. Vietnam National Shipping Lines:

To direct and support Quang Ninh port to strictly comply with the provisions of this Decision.

Article 14.- Implementation effect

This Decision takes effect 15 days after its publication in the Official Gazette.

The termination of the experimentation shall be reported by the Ministry of Communications and Transport to the Prime Minister for consideration and decision according to Item d, Clause 1, Article 13 of this Decision.

Article 15.- Implementation responsibility

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of Quang Ninh province as well as concerned provinces and centrally-run cities, the director of Vietnam Maritime Bureau, the chairman of the Management Board and the general director of Vietnam National Shipping Lines, the director of Quang Ninh port, the heads of concerned agencies, units and individuals shall have to implement this Decision.

For the Prime Minister
Deputy Prime Minister

NGUYEN TAN DUNG