The approach to preliminary estimate of total investment in Vietnam

The approach to preliminary estimate of total investment in Vietnam (Image from the Internet)

The approach to preliminary estimate of total investment is prescribed in Article 4 of Circular 09/2019/TT-BXD as follows:

- Preliminary estimated total investment shall be calculated under clause 1 of Article 5 in the Decree No. 68/2019/ND-CP.  In case there is no sufficient conditions for determination of the operational size, scale, capacity or service capability according to the preliminary design plan of the project, or these criteria have been determined despite none of available data on investment costs per unit, the preliminary estimate of total construction investment shall be made in reference to data about costs of projects similar in type and grade of works, operational size, capacity or service capability which are already completed or under construction, and shall be adjusted or supplemented with other necessary costs which are then converted to be relevant to the time of preliminary estimation of total investment, construction site, characteristics and nature of the project.

- For any project implemented in the form of turnkey contracts, construction costs and equipment expenses defined in the preliminary estimate of total construction investment shall be calculated according to the approach to determining costs based on construction work quantity mainly measured according to the preliminary design in combination with the approach to determining costs by using investment costs per unit or cost data of similar project, and in compliance with correct and adequate costing rules for estimation of costs for the turnkey bid package.

- Review and approval of the preliminary estimate of total investment shall be regulated as follows:

+ Review and approval of the preliminary estimate of total investment in projects using state budget capital and non-budgetary state capital shall be subject to regulations of laws on public investment and investment legislation.

+ Review and approval of the preliminary estimate of total investment in PPP projects shall be subject to laws on PPP.

- Costs of turnkey bid packages shall be estimated under the provisions of clause 2 of Article 11 herein. Investment decision makers shall have authority to review and approve estimates of costs of turnkey bid packages.

- Details about approaches to the preliminary estimate of total investment shall follow instructions given in the section 1 of Appendix No. 1 hereto.

Best Regards!