Circular 16: Determination of administrative costs of PPP investment projects in Vietnam

16:12, 30/12/2019

On December 26, 2019, the Ministry of Construction of Vietnam officially issued Circular No. 16/2019/TT-BXD providing instructions on determination of project administrative and investment counseling costs.

According to Circular No. 16/2019/TT-BXD of the Ministry of Construction of Vietnam, project-related administrative costs are determined by competent authorities on the basis of cost estimates relevant to respective project management duties and policies.

To be more specific, operating overheads of a project management unit under the control of a competent authority determined in percent (%) (issued in the Table No. 1.2 in Appendix No. 1 attached to Circular No. 16/2019/TT-BXD) are multiplied by construction and equipment costs (not including VAT yet) constituting total investment amount. Operating overheads of a project management unit controlled by a competent authority with respect to projects stretched along the direction within at least two provinces or projects comprising separate construction works built within different provinces shall be determined according norms issued in Table No. 1.2 in Appendix No. 1 hereto, and may be adjusted with the coefficient k = 1.1.

Notably, if an investor in a project wishes to determine its administrative costs, such costs must be determined according to instructions given in Article 5 herein and may be adjusted with the coefficient k = 0.7.

View full text at Circular No. 16/2019/TT-BXD of the Ministry of Construction of Vietnam, effective from February 15, 2020.

Thu Ba

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