Vietnam Railway Authority (VNRA) has been assigned to appraise and approve price plans from November 1, 2023 in Vietnam

Vietnam Railway Authority (VNRA) has been assigned to appraise and approve price plans from November 1, 2023 in Vietnam

On September 15, 2023, the Ministry of Transport issued Circular 25/2023/TT-BGTVT amending and supplementing some articles of Circular 11/2021/TT-BGTVT guiding the pricing method and management of public service prices in the field of management, maintenance of national railway infrastructure implemented under the order method using state budget from the source of regular operating expenses.

At Article 5 of Circular 11/2021/TT-BGTVT as amended by Clause 1, Article 1 of Circular 25/2023/TT-BGTVT (effective from November 1, 2023), there are regulations on the authority, deadline, and procedure for appraising and deciding on pricing plans as follows:

Authority, deadline, procedure for appraising and deciding on prices

1. The decision on the price of public services in the field of management, maintenance of national railway infrastructure is carried out after the budget for state budget expenditure is assigned to the Ministry of Transport by the competent authority.

2. The service provider is responsible for organizing the construction of the price plan for public services in the field of management, maintenance of national railway infrastructure implemented under the order method, submitting to the VNRA before January 31 of the planning year.

3. Authority, deadline, procedure for appraising and deciding on pricing plans

a) Assign the VNRA to carry out the appraisal and approval of the price plan.

b) The deadline, procedure for appraising and deciding on pricing plans is carried out according to the provisions of Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of some articles of the Law on Prices and Decree No. 149/2016/NĐ-CP dated November 11, 2016 of the Government amending and supplementing some articles of Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of some articles of the Law on Prices.

Therefore, from November 1, 2023, the VNRA will be assigned to appraise and approve the pricing plan.

What are the principles for determining the price of public service in railway infrastructure management and maintenance in Vietnam?

According to Article 3 of Circular 11/2021/TT-BGTVT, the determination of the price of public service in railway infrastructure management and maintenance must ensure the following principles:

- Reasonable actual costs to complete one unit of public service volume specified in railway infrastructure management and maintenance.

- In accordance with the technical standards, technical regulations, and norms issued by competent state agencies and the technical status of each structure, or specific work items.

- In accordance with the market situation at the place of construction and the volume, quality of public service.

- Do not include in the price of public service any costs already guaranteed by the state budget.

What are the methods for determining the price of public service in railway infrastructure management and maintenance in Vietnam?

According to Clause 2, Article 4 of Circular 11/2021/TT-BGTVT, the determination of the price of public service in railway infrastructure management and maintenance is carried out according to the following method:

Price of public service for management and supervision of maintenance work of railway structures = Management and supervision cost rate (%) x Total budget for maintenance of railway infrastructure (excluding VAT).

The method for determining the standard management and supervision cost rate is carried out according to the instructions in Appendix 3 attached to Circular 11/2021/TT-BGTVT.

Note: Circular 25/2023/TT-BGTVT is effective from November 1, 2023.

Best regards!