What does the total construction investment in Vietnam nclude?

What does the total construction investment in Vietnam nclude? (Internet image)

Regarding this issue, LawNet responded as follows:

1. What does the total construction investment in Vietnam include?

Contents of total construction investment according to Article 5 of Decree 10/2021/ND-CP are as follows:

- Total construction investment refers to total construction investment of projects identified and satisfactory to fundamental design and other details under construction investment feasibility reports.

- Total investment includes: compensation, assistance and relocation costs (if any); construction cost; equipment cost; project management cost; construction investment and consultancy cost; other costs; backup costs and is prescribed as follows:

+ Compensation, assistance and relocation costs include:

Compensation costs for land, houses, constructions on land, assets attached to land, assets on water and other compensation costs as per the law;

++ Assistance costs when the government performs land appropriation;

++ Relocation costs;

++ Costs for organizing compensation, assistance and relocation;

++ Land use and rental costs during construction period (if any);

++ Costs for repositioning and repaying technical infrastructure invested for construction serving land clearance (if any) and other relevant costs;

+ Construction costs include:

++ Construction costs for constructions and work items of projects;

++ Temporary and/or auxiliary constructions and work items serving construction progress;

++ Deconstruction cost for constructions beyond deconstruction scope serving land clearance affairs identified under compensation, assistance and relocation costs;

+ Equipment costs include:

++ Cost for purchasing construction and technology equipment;

++ Administrative cost for equipment purchase (if any);

++ Cost for purchasing copyrights of software serving construction and technology equipment (if any);

++ Training and technology transfer costs (if any);

++ Costs for processing, manufacturing equipment to be processed (if any);

++ Cost for installing, experimenting, calibrating;

++ Cost for conducting test operation of equipment based on technical requirements (if any);

++ Transportation costs;

++ Insurance;

++ Tax and fees;

++ Other relevant costs;

+ Project management costs refer to costs necessary to organize management of implementation and implement management affairs from project preparation, project execution to conclusion of construction, bringing project constructions into operation and settlement of construction investment capital and are elaborated under Article 30 of Decree 10/2021/ND-CP;

+ Construction investment consultancy costs refer to costs necessary to perform construction investment consultancy affairs from project preparation, project execution to conclusion of construction, bringing project constructions into operation and settlement of construction investment capital and are elaborated under Article 31 of Decree 10/2021/ND-CP;

+ Other costs include costs necessary to execute construction investment projects, include:

++ Costs for clearing and disarming mines, explosive ordnances;

++ Costs for moving specific construction machinery and devices to and from construction sites;

++ Costs for guaranteeing traffic safety during construction period;

++ Costs for returning technical infrastructure damaged by construction period to its original state;

++ Costs for material storage;

++ Costs for constructing sheltering structures for machine, machine foundation, electrical and compressed air supply systems, on-site water supply systems, installing and/or dismantling machines;

++ Construction insurance costs during construction period;

++ Costs for registering international standards and monitoring construction deformation processes;

++ Costs for accounting, inspection and approval of investment capital settlement;

++ Costs for examining acceptance inspection during construction period and at completion of constructions and work items performed by agencies specialized in construction or councils established by prime minister;

++ Conducting scientific and technology research, applying and utilizing new materials related to projects;

++ Initial working capital for construction investment for business purposes, loan interests during construction period;

++ Costs for conducting unloaded and loaded test operation for technology and manufacturing lines before transfer (other than salvageable product value);

++ Costs for appraising construction investment feasibility reports, construction investment economic-technical reports; resource taxes, fees and charges as per the law and other necessary costs to execute construction investment projects not specified under points a, c, d, and dd of Article 5 of Decree 10/2021/ND-CP;

+ Backup costs include costs for additional work load and inflation that occurs during project execution.

- In case projects only require preparation of construction investment economic-technical reports, total construction investment shall include construction estimates according to Article 11 of Decree 10/2021/ND-CP, compensation, assistance, relocation costs (if any) and relevant costs of projects. Construction estimates are identified under Article 12 of Decree 10/2021/ND-CP.

2. Guidelines for determination, appraisal and approval of preliminary total investment in Vietnam

Guidance on determination, appraisal and approval of preliminary total investment in Vietnam according to Article 4 of Decree 10/2021/ND-CP is as follows:

- Preliminary total investment refers to estimated investment capital of projects in construction investment pre-feasibility reports. Preliminary total investment includes: compensation, assistance and relocation costs (if any); construction cost; equipment cost; project management cost; construction investment and consultancy cost; other costs; backup costs.

- Preliminary total investment is estimated on the basis of scale, capacity or capability according to preliminary design of projects and construction investment rates or data on costs of similar projects in terms of construction type, grade, scale, capacity or capability, characteristics of implemented projects with analysis and assessment to adjust shift in market price depending on building site and including other necessary costs of projects.

- Appraisal and approval of total construction investment shall be performed simultaneously with appraisal and approval of construction investment pre-feasibility reports according to regulations and law on public investment, investment form of public-private partnership, management and use of state capital in manufacturing and business in enterprises and other relevant law provisions.

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