What are the guidelines on the proposal to approve the increase in material prices as one of the adjustments of public investment projects in Vietnam?
What are the regulations on the adjustment of public investment programs and projects in Vietnam?
According to Article 43 of the Law on Public Investment 2019, the provisions are as follows:
Adjustment of public investment programs and projects
1. Adjustment of a program shall be made:
a) in case of adjusting objectives and changing requirements for implementation thereof in the socio-economic development strategy and plan and other related planning scheme as provided for in law on planning;
b) in case of adjusting or ceasing the investment policy under the competent authority's direction;
c) due to causes of force majeure resulting in changes in investment objectives, scale, expenses for and duration of implementation of a public investment program.
2. Adjustment of a project shall be made:
b) in case of adjusting or ceasing the investment policy under the competent authority's direction;
b) in case of adjustment in the planning scheme resulting in direct impacts on the project;
c) due to causes of force majeure resulting in changes in investment objectives, scale, expenses for and duration of implementation of a public investment project;
d) under the impact of emergencies arising from natural disasters, conflagration or other force majeure events upon expiry of the project’s insurance policy;
dd) if factors creating more financial or socio-economic efficiency arise by reason of such Adjustment and such efficiency is evaluated by the competent authority;
e) if the price index quoted during the time of implementation of the project is higher than the price index used for calculation of the allowance for depreciation included in the project’s gross investment that is decided by the competent authority.
3. The regulatory authority mandated to make its decision on investment in a public investment program or project shall be authorized to issue a decision to modify that program or project, and shall be responsible for its own decision.
4. The regulatory authority may modify a public investment program or project only when that program or project has already undergone the evaluation, inspection or assessment as provided herein.
5. In case where the Adjustment results in any increase in the gross investment greater than the one already obtaining the investment policy decision from the competent authority, the project must follow procedures and processes for grant of decisions on Adjustment of investment policies before receipt of the decision on Adjustment of the project from the competent authority.
6. Contents of, procedures and processes for design and evaluation of Adjustment of public investment programs and projects shall be subject to the Government’s regulations.
What is the response to the proposal to approve the increase in material prices as one of the adjustments of public investment projects in Vietnam? (Image from the internet)
What is the adjustment of prices as stipulated in the Law on Construction of Vietnam?
According to Clause 3, Article 143 of the Law on Construction 2014, amended by Point c, Clause 64, Article 1 of the Law on Amendments to Law on Construction 2020, the provisions are as follows:
"Article 143. Adjustment of construction contracts
...
3. In addition to the provisions of Clauses 1 and 2 of this Article, the adjustment of prices of construction contracts under projects using public investment funds, non-public investment state funds must also comply with the following provisions:
a/ The adjustment of unit prices for contract performance is applicable only to adjustable unit price-based and time-based contracts;
b/ Unit prices in contracts may be adjusted according to the contents, scope, methods and bases for contract adjustment agreed upon by the parties in the contracts in accordance with law;
c/ Permission of investment deciders shall be sought for contract adjustments that would change the investment objectives and contract performance time or increase the approved construction bidding package cost estimate.
What is the adjustment of prices as stipulated in the Law on Bidding in Vietnam?
According to Article 67 of the Law on Bidding 2013, the provisions are as follows:
Principles of adjustment to contract
1. Adjustment to contracts must be specified specifically in the written contract, written agreement on contractual conditions (if any).
2. Adjustment to contracts shall only apply within validity period of contract.
3. Adjustment to contract price shall only apply unit price contract, adjustable unit rate contract and time-based contract.
4. The adjusted contract sum shall not exceed package price or estimated budget already been approved. In case of projects, estimates on procurement including many packages, the adjusted contract sum shall not exceed the total investment, the estimated budget for procurement already been approved.
5. For contracts based on modifiable unit price, the adjustment of unit price shall be performed as from time of arising the elements causing changes of price and only be applied for the performed volume in accordance with the progress stated in contract or the adjusted progress as prescribed in Clause 6 and Clause 7 of this Article.
6. The contract time for performance shall be only adjusted in the following case:
a) In case of force majeure, not relating to any violation or mistake of parties in contract;
b) Changes of the work scope, design, measures for construction due to objective requirements affect to the contract time for performance;
c) Handing over of ground inconsistently with agreements in contract affect to the contract time for performance but cause is not fault of contractor.
7. In case of adjustment to the contract time for performance which do not prolong the progress of finishing project, contractual parties may agree and unify such adjustments. In case of adjustment to the contract time for performance which prolong the progress of finishing project, it must report to the competent person for consideration and decision.
What is the response to the proposal to approve the increase in material prices as one of the adjustments of public investment projects in Vietnam?
According to Section 8 of Official Dispatch 5015/CV-TCT issued in 2022 guiding the contents of implementing public investment projects as follows:
- The handling of increases in material prices in public investment projects is not only stipulated in the Law on Public Investment No. 39/2019/QH14 but also in the Procurement Law and Construction Law for specific cases.
Thus, the regulation on the basis for adjusting investment projects in cases of material price increases has been stipulated in the Law on Public Investment No. 39/2019/QH14.
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