Vietnam: 07 principles for determination and administration of construction price indices

According to Article 3 of Circular No. 14/2019/TT-BXD of the Ministry of Construction of Vietnam, 07 principles for determination and administration of construction price indices are specified as follows:

- Once already being determined, a construction price index must reflect any fluctuation in local market prices in a fair and appropriate manner.

- Determination and public disclosure of construction price indices must be timely and conformable to regulations on administration of construction investment expenses.

- It shall be obliged that a particular list and quantity of representative construction works are defined before calculation and public disclosure of a construction price index.

- A construction price index is calculated according to a mean formula during the specified period of time without taking into account several costs of compensation, support and resettlement, lending interest incurred during construction period and initial outlay. A construction price index is expressed in percent (%).

- Cost structure used for calculation of construction price indices must correspond to the cost structure covered by regulations on administration of construction investment expenses, be based on statistical data and be used in a stable manner until there is any change in a benchmark point of time.

- Management and use of construction price indices must comply with regulations related to management of construction investment expenses.

- During the process of determining price indices, entities specialized in construction need to carry out review and assessment of these price indices by using information about those of adjacent regions or localities in order to ensure they adapt to tendencies of fluctuation in the regional market and there is none of great difference between local price indices.

View details at Circular No. 14/2019/TT-BXD of the Ministry of Construction of Vietnam, effective from February 15, 2020.

Thu Ba

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