1. The programme was discussed with Mme. Nguyen Thi Hang, Minister of Labour, Invalids and Social Affairs, on 30 July 1999 and was formally approved by Prime Minister Phan Van Khai, on behalf of the Vietnamese Government, at a meeting held at his office on 6 August 1999.

2. The purpose of the programme is to assist the rural population residing in some of the 1,760 poorest communes located in remote areas of the country within the framework of the government's Poverty Alleviation Programme.

3. The programme will focus on the development of communal infrastructure such as the construction or upgrading of roads, primary schools, drinking water, irrigation and bridges.

4. An Aide Memoire was signed with the Ministry of Labour, Invalids and Social Affairs on 30 July 1999 under which "every effort" would be made to provide sufficient funding for some 40 projects focusing on the poorest communes in the least-developed parts of the country.

5. The provinces in which the projects are to be implemented are to be determined in mutual agreement with the Ministry of Labour, Invalids and Social Affairs (MOLISA).

6. The first batch of ten projects are to be implemented in the northern provinces of Ha Giang, Yen Bai, Lao Cai and Lai Chau; the second batch in the central provinces of Thua Thien Hue, Quang Nam and Quang Ngai and the third batch in the central provinces of Quang Tri and Quang Binh. The fourth and final batch of ten projects will be carried out in the southern provinces of Tra Vinh, Soc Trang and Bac Lieu.

7. The local authorities in the selected provinces are to draw up project proposals, including detailed specifications and budgets, and submit them to us through MOLISA for consideration.

8. A preliminary determination as to which projects will be considered will depend on the nature and quality of the submissions, the amount requested, the location of the project, the number of beneficiaries and whether the proposal addresses the needs of the community in the most effective way.

9. A final determination as to which projects are funded will be made only after preliminary visits to the project sites, undertaken jointly by MOLISA and ourselves, and following on-site discussions with the local authorities.

10. The maximum amount of financial assistance to be provided to each project should not exceed US$30,000. Any costs incurred above that amount will be covered by the local authorities.

11. Our contribution will cover only those items directly relevant to the implementation of the project, such as the purchase of building materials, the transportation of materials, labour costs, etc. It will not cover indirect costs such as administrative expenses or local taxes. These will be covered by the local authorities.

12. Once the projects have been approved, the required funds will be transferred to the bank account of MOLISA for onward transfer to the local authorities in the relevant provinces indicating the specific projects to be financed.

13. The projects will be implemented by the local authorities in accordance with instructions from MOLISA and in accordance with relevant financial rules and regulations of the Vietnamese government.

14. The projects will normally be implemented within a period of four to six months following the transfer of funds, depending on the nature of the project and weather conditions.

15. MOLISA will ensure that each project is carried out according to the agreed-upon specifications and according to schedule.

16. Upon completion of each project, a joint visit will be undertaken by MOLISA and ourselves to the project site to ensure that the project has been properly implemented.

17. A final financial report for each project will be submitted by the local authorities, through MOLISA, indicating how the funds have been utilized.