Regulations on construction prices and construction investment rates in Vietnam

Regulations on construction prices and construction investment rates in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Regulations on construction prices in Vietnam

Construction prices according to Article 24 of Decree 10/2021/ND-CP are as follows:

-  Construction prices include specific construction unit price and mixed construction prices and serve as the basis for determining total construction investment and construction estimates.

= Specific construction unit price is determined for construction operations;

= Mixed construction prices are determined by group, type of construction operations, structural or component units of constructions.

- 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.

2. Regulation on construction investment rates in Vietnam

Construction investment rates under Article 25 of Decree 10/2021/ND-CP is as follows:

- Construction investment rates are costs necessary for a unit of measurement by area, volume, length, capacity or capability of structures by design and serve as the basis for determining preliminary total investment and total construction investment.

- Construction investment rates include:

= Construction costs;

= Equipment costs;

= Project management costs;

= Construction investment consultancy costs;

= Other costs and vat for said costs.

Construction investment rates do not include backup costs and costs for several affairs depending on separate requirements of projects and structures.

3. Management of construction prices and construction investment rates in Vietnam

Article 26 of Decree 10/2021/ND-CP stipulates the management of construction prices and construction investment rates as follows:

- Ministry of Construction shall provide guidelines for determining construction prices, construction investment rates and publicize mixed construction prices, construction investment rates periodically.

- People’s Committees of provinces shall publicize construction unit price of local administrative divisions; decentralize and authorize Departments of Construction to publicize construction price information in provinces according to Points a and b of Clause 2 Article 26 of Decree 10/2021/ND-CPas follows:

= Prices of construction materials and equipment: publicize on a quarterly basis or earlier if necessary;

= Unit price of construction personnel, construction machinery and equipment per shift, construction machinery and equipment rental: publicize on an annual basis or earlier if necessary.

- Investors shall employ construction price systems under Clauses 1 and 2 of Article 26 of Decree 10/2021/ND-CP as the basis for determining total construction investment, construction estimates and managing construction investment or organizing determination of construction prices satisfactory to technical requirements, construction conditions, constructions solutions and specific plans of constructions.

- Investors may hire organizations and/or individuals that provide advice on management of construction investment capable of operating according to Decree elaborating to regulations on management of construction investment to perform tasks or parts of tasks related to determination and appraisal of construction prices under Clause 3 of Article 26 of Decree 10/2021/ND-CP.

- Expenditure on collecting figures, determining and publicizing construction prices and information on prices and construction investment rates under Clauses 1 and 2 of Article 26 of Decree 10/2021/ND-CP shall be allocated from annual budget.

Quoc Dat

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