Guidelines on applying the norms of general production costs, management costs for railway projects in Vietnam from January 1, 2025

Guidelines on applying the norms of general production costs, management costs for railway projects in Vietnam from January 1, 2025​ (Image from the internet)

On November 15, 2024, the Minister of Transport of Vietnam issued Circular 42/2024/TT-BGTVT promulgating cost norms applicable to public service operations in the management and maintenance of national railway infrastructure following the order placement method using state budget funds from recurrent expenditure sources.

Guidelines on applying the norms of general production costs, management costs for railway projects in Vietnam from January 1, 2025

Circular 42/2024/TT-BGTVT provides guidelines on applying norms for general production costs and management costs in Vietnam as follows:

(1) General Production Costs

General production costs comprise all expenses for the management machinery of the enterprise at the construction site, including the following expenses:

- Costs for on-site staff: wages, salary-like allowances to be paid to on-site management staff and contributions for social insurance, health insurance, unemployment insurance, and union fees in accordance with the Labor Code 2019, state policies, and related legal provisions;

- Materials costs used at the site such as materials for repairing fixed assets used at the site, and materials for site management;

- Depreciation costs for fixed assets used in the activities of the site, carried out in accordance with regulations of the Ministry of Finance on the policies of management, utilization, and depreciation of fixed assets;

- Purchased services costs serving on-site activities such as: costs for electricity, water, telephone, costs for repairing fixed assets, fixed asset rental fees, payments to contractors (if any), and other purchased outside costs (if any);

- Other reasonable and legitimate monetary expenses as stipulated by law beyond those costs mentioned above serving site activities;

- Employer's costs to pay for employees directly involved in production off-site as stipulated (social insurance, health insurance, union fees, unemployment insurance, occupational accident insurance, other insurances...).

(2) Management Costs

Management costs are the enterprise's management expenses allocated for construction projects which include:

- Management staff costs include salaries and wage-like allowances payable to management departments, contributions for social insurance, health insurance, unemployment insurance, union fees for management personnel in accordance with the Labor Code 2019, government policies, and related legal provisions;

- Material costs used for management activities, materials for repairing fixed assets, instruments, and tools;

- Repair costs for fixed assets, transport mediums, transmission devices, machinery, and equipment, tools used for management;

- Depreciation costs for fixed assets used by the management team such as workrooms of departments, transport mediums, transmission devices, office management equipment, and other assets. Depreciation of fixed assets is carried out in accordance with regulations of the Ministry of Finance on policies of management, utilization, and depreciation of fixed assets;

- Purchased services costs serving management activities; expenditures on acquiring and using technical documents, and patents inadequately recorded as fixed assets calculated using amortization into management costs; fixed asset rental fees, payments to contractors (if any);

- Various taxes, fees, charges (if any) in accordance with legal regulations;

- Other monetary costs under general management, beyond the aforementioned costs such as: conference costs, guest reception, travel expenses, tickets, costs for female laborers, research, training, association participation fees, and other reasonable and legitimate expenses (if any) according to law;

- Employer's costs for the benefit of the employees as required (social insurance, health insurance, union fees, unemployment insurance, occupational accident insurance, other insurances...).

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