Instructions on determination and management of construction investment costs in Vietnam

Instructions on determination and management of construction investment costs in Vietnam (Illustration image)

According to this Circular, Construction costs include detailed unit costs and total construction costs, in which:

 - Specific construction unit price of constructions is determined on the basis of construction norms, prices of construction materials, components, personnel, construction machinery and equipment and other necessary cost factors satisfactory to price market of construction sector at a definite point in time and other relevant law provisions, on the basis of construction unit price issued by People’s Committees of provinces or on the basis of market price or similar prices of implemented constructions.

- Mixed construction price is determined on the basis of combining specific construction unit price of a unit of measurement of operation, structural or component unit according to prices issued by competent authorities, identified on the basis of market price or similar prices in implemented constructions.

The investor uses construction cost system announced by the provincial People's Committee  as a basis to determine and manage construction investment costs

n case where construction costs are determined based on detailed unit costs or total construction costs on the basis of construction norms, costs of building materials, labor unit costs, per-shift costs of machines and equipment may be determined under that:

(1) Costs of building materials:

- Costs of building materials announced by competent regulatory authorities under clause 3 of Article 8 herein serve as a basis for determining construction costs.

- With respect to building materials of which costs have not yet been announced or are already available but proved to be inappropriate, costs of these building materials used for determining construction costs shall be determined under the instructions given in 1.2.1 of Circular 11/2021/TT-BXD of Vietnam

- When preparing a feasibility study report, engineering design and determining construction investment costs for a construction work or project, building materials meeting less mineral consumption, energy saving and eco-friendly requirements are preferred on condition that investment effectiveness and conformance to the project’s requirements are ensured.

- If any project needs particular types of building materials, those not common on the market or imported ones, explanatory notes to the pre-feasibility study report, the feasibility study report, the economic-technical report and the construction design should be given in detail.

(2) Unit labour costs

- Unit costs of building labor announced by competent regulatory authorities under clause 4 of Article 8 herein serve as a basis for determining construction costs.

- If any unit cost of building labor announced by competent regulatory authorities is inappropriate to particularities of the construction job, work or project, the investor must conduct a survey to determine the unit cost of building labor according to the method prescribed in the Circular, providing instructions about methods for determination of economic-technical indicators and construction quantity takeoff before making their decision to apply such unit cost when determining construction costs. While determining unit costs of building labor, the Department of Construction shall follow instructions about accuracy and relevance of bases and methods for determining unit costs of building labor upon the investor's request.

- The investor shall send dossiers on results of determination of unit costs of building labor under point b of this clause to the Department of Construction for its monitoring and management; these dossiers should describe bases, methods and results of determination of unit costs of building labor, forms (if any) according to the stipulated method; on an annual basis, upon receipt of these dossiers, the Department of Construction shall compile a report for submission to the Ministry of Construction.

(3)  Per-shift costs of building machines and equipment:

- Per-shift costs of building machines and equipment announced by competent regulatory authorities under Clause 5, Article 8 of Circular 11/2021/TT-BXD of Vietnam serve as a basis for determining construction costs

- In case where per-shift costs of building machines and equipment that have not yet been announced by competent regulatory authorities, or that have been announced but inappropriate to their uses and conditions for implementation of a construction work or project, the investor shall conduct a survey for determination of per-shift costs of building machines and equipment according to the method prescribed in the Circular providing methods for determination of economic-technical indicators and construction quantity takeoff before making their decision to such unit costs when determining construction costs. While determining per-shift costs of building machines and equipment, the Department of Construction shall follow instructions about accuracy and relevance of bases and methods for determining per-shift costs of building machines and equipment upon the investor's request.

- The investor shall send dossiers on results of determination of per-shift costs of building machines and equipment under point b of this clause to the Department of Construction for its monitoring and management; these dossiers should describe bases, methods and results of determination of per-shift costs of building machines and equipment, forms (if any) according to the stipulated method; on an annual basis, upon receipt of these dossiers, the Department of Construction shall compile a report for submission to the Ministry of Construction

Note: With respect to any construction project located in at least 02 administrative units, the investor shall take charge of determining construction costs under the provisions of clause 3 of Article 26 in the Decree No. 10/2021/ND-CP of Vietnam to facilitate determination of costs, ensure anti-wastefulness and effectiveness for the project as well as adaptation to the capability of supplying resources according to the project implementation plan.

Circular 11/2021/TT-BXD of Vietnam takes effect from October 15, 2021 and replaces Circular 09/2019/TT-BXD ; Circular 11/2019/TT-BXD; Circular 14/2019/TT-BXD; Circular 15/2019/TT-BXD; Circular 16/2019/TT-BXD; Circular 18/2019/TT-BXD; Circular 02/2020/TT-BXD.

 Bao Ngoc

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