Vietnam: Calculating norms of project-related administrative costs and investment counseling costs

Norms of administrative costs of investment and construction projects issued in Circular No. 16/2019/TT-BXD of the Ministry of Construction of Vietnam serve as a basis to determine costs incurred from administration of investment and construction projects (hereinafter referred to as project-related administrative costs) in order for authorized entities to carry out management of these projects from the project pre-execution, execution, completion and operation stage. Norms of investment counseling costs issued herein shall be used for determining costs incurred from investment and construction consulting services (hereinafter referred to as counseling costs) according to contents and requirements of consulting products and investment and construction procedures.

According to Circular No. 16/2019/TT-BXD of the Ministry of Construction of Vietnam, as for projects, construction works or contracts with the amount of expenses falling within the range of expenses specified in Appendices hereto, norms of project-related administrative costs and investment counseling costs shall be calculated according to the following formula:

Where:

- Nt: Norm of project-related administrative costs and investment counseling costs which corresponds to the gross amount of construction expenses or equipment expenses, or the gross amount of construction expenses and equipment expenses to be calculated; unit: %;

- Gt: The gross amount of construction expenses or the gross amount of equipment expenses or the gross amount of construction expenses and equipment expenses required for calculation of the norm of project-related administrative costs and investment counseling costs; unit: value;

- Ga: The gross amount of construction expenses or the gross amount of equipment expenses or the gross amount of construction expenses and equipment expenses bounding from above the gross amount of expenses which is required for calculation of the norm; unit: value;

In case where a project has the gross amount of expenses (including construction and equipment expenses) greater than the gross amount of expenses specified in Appendix No. 1 hereto or, due to particular characteristics of a project, its administrative costs determined according to the norms issued herein are not adequate, the project owner may make an estimate in order to determine project-related administrative costs, ensuring the project’s efficiency.

If a project, construction work or contract has the gross amount of expenses greater than the gross amount of expenses stated in Appendix No. 2 hereto, or norms of costs of several counseling activities have not yet been issued, the owner may make an estimate of counseling costs according to the instructions given in Appendix No. 3 herein.

View details 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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