Circular 11/2021/TT-BXD determination and management of construction investment costs

CIRCULAR

Guiding a number of provisions on determination and management of construction investment costs^[1]

Pursuant to the June 18, 2014 Construction Law; and the June 17, 2020 Law Amending and Supplementing a Number of Articles of the Construction Law;

Pursuant to the Government’s Decree No. 81/2017/ND-CP of July 17, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government’s Decree No. 10/2021/ND-CP of February 9, 2021, on management of construction investment costs;

At the proposal of the Director of the State Authority of Construction Economics;

The Minister of Construction promulgates the Circular guiding a number of provisions on determination and management of construction investment costs.

Article 1. Scope of regulation

This Circular guides a number of provisions on determination and management of construction investment costs, including preliminary total construction investment amounts, total construction investment amounts, work construction cost estimates, bidding package cost estimates, construction prices, work construction prices, construction price indexes, construction investment unit costs, construction investment capital conversion, and construction investment consultancy expenses.

Article 2. Subjects of application 

This Circular applies to the subjects specified in Article 2 of the Government’s Decree No. 10/2021/ND-CP of February 9, 2021, on management of construction investment costs (below referred to as Decree No. 10/2021/ND-CP).

Article 3. Preliminary total construction investment amounts and total construction investment amounts

1. Preliminary total construction investment amounts shall be determined under Clauses 1 and 2, Article 4 of Decree No. 10/2021/ND-CP and by the method guided in Section I of Appendix I to this Circular. In case no data on construction investment unit costs have been announced, preliminary total construction investment amounts shall be determined on the basis of cost data of implemented similar projects with modification and addition of other necessary costs and conversion of expenses and costs conformable to construction locations, features and characteristics of projects and time of determination of preliminary total construction investment amounts.

2. Total construction investment amounts shall be determined under Article 6 of Decree No. 10/2021/ND-CP and by the method guided in Section II of Appendix I to this Circular and must comply with the following specific provisions:

a/ Bases for determination of total construction investment amounts include basic designs, applicable technical regulations and standards, technological and technical solutions, major equipment; work architecture solutions and main structures; construction solutions and major materials; project implementation conditions and plans, and other necessary requirements of projects.

b/ Some cost and expense items, such as project management expenses, construction investment consultancy expenses, and other costs and expenses of projects which have not yet been regulated or cannot be determined due to lack of bases, shall be estimated in total construction investment amounts.

3. For construction investment projects funded by official development assistance (ODA) loans or concessional loans of foreign donors, other necessary cost and expense items may be added to conform to features and characteristics of such projects under concluded treaties or international agreements on ODA loans or concessional loans and relevant domestic laws.

4. For investment projects in the form of public-private partnership (PPP projects), other necessary cost and expense items may be added in accordance with the law on investment in the PPP form.

Article 4. Work construction cost estimates     

1. Work construction cost estimates shall be determined under Article 12 of Decree No. 10/2021/ND-CP and by the method guided in Section 1 of Appendix II to this Circular. Cost and expense items in work construction cost estimates include construction costs, equipment costs, project management expenses, construction investment consultancy expenses, other costs and expenses, and contingency expenses.

2. Construction costs in work construction cost estimates shall be determined under Clause 2, Article 12 of Decree No. 10/2021/ND-CP and by the method guided in Appendix III to this Circular. Construction costs in work construction cost estimates include direct costs, indirect costs, presumed taxable income, and value-added tax. Direct costs shall be determined under Point a, Clause 2, Article 12 of Decree No. 10/2021/ND-CP, guided in detail in Section I of Appendix III to this Circular, and must comply with the following specific provisions:

a/ Quantities taken off and calculated from construction designs implemented following basic designs must comply with the Circular guiding methods of determination of techno-economic norms and takeoff of quantities of works;

b/ Detailed construction unit prices and general construction prices shall be determined under the guidance provided in Appendix IV to this Circular.

3. Equipment costs in work construction cost estimates shall be determined under Clause 3, Article 12 of Decree No. 10/2021/ND-CP, guided in detail in Section 1 of Appendix II to this Circular, and must comply with the following specific provisions:

a/ Expenses for procurement of equipment shall be determined according to equipment amounts, quantities and categories and corresponding equipment purchase prices. Equipment amounts, quantities and categories shall be determined on the basis of designs implemented following basic designs and approved lists of equipment for projects. Equipment purchase prices shall be determined based on market prices and information about equipment prices on databases of competent state agencies; or price quotations of suppliers or manufacturers; or prices of equipment that are similar in terms of capacity, technology or origin in constructed works which are converted to suit prices at the time of calculation.

b/ Expenses for processing or manufacturing of equipment shall be determined on the basis of volumes and quantities of equipment that need to be processed or manufactured and corresponding processing or manufacturing unit prices conformable to characteristics and categories of equipment; or information about equipment processing or manufacturing prices on databases of competent state agencies; or equipment processing or manufacturing price quotations of manufacturers or suppliers; or processing or manufacturing prices of similar equipment of constructed works which are converted to suit the time of calculation.

c/ Expenses for management of equipment procurement (if any); expenses for purchase of copyright of software to be used for work equipment and technological equipment (if any); expenses for training and technology transfer (if any); expenses for transportation; insurance costs; taxes and other related charges and expenses shall be determined according to cost estimates or regulations issued by competent state agencies.

d/ Expenses for installation of equipment shall be determined according to cost estimates as for construction cost estimates under Clause 2 of this Article.

dd/ Expenses for testing, calibration and trial operation of equipment according to technical requirements (if any) shall be determined according to cost estimates relevant to performed jobs.

4. Project management expenses in work construction cost estimates shall be determined under Clause 4, Article 12, and Article 30, of Decree No. 10/2021/ND-CP on the basis of norm percentages (%) already calculated in total construction investment amounts; or according to cost estimates suitable to project management expenses in approved total investment amounts. Norms of project management expenses are provided in the Circular issuing construction norms.

5. Construction investment consultancy expenses in work construction cost estimates shall be determined under Clause 5, Article 12 of Decree No. 10/2021/ND-CP and Article 13 of this Circular. Construction investment consultancy expenses in work construction cost estimates exclude consultancy expenses calculated for whole projects.

6. Other expenses in work construction cost estimates are specified in Clause 6, Article 12 of Decree No. 10/2021/ND-CP and must comply with the following specific provisions:

a/ Other expenses in work construction cost estimates shall be determined on the basis of norm percentages (%) as guided by competent authorities; or according to cost estimates; or marked according to value of signed contracts in accordance with law; or included in work construction cost estimates according to approved total construction investment amounts in case of lack of bases for determination.

b/ Expenses for building shelters for machinery, machinery foundations, power, compressed air and water supply systems at construction sites; expenses for installation or dismantlement of cement concrete mixers, asphalt concrete mixers, rail-travelling cranes and other similar construction equipment shall, if not calculated for whole projects, be estimated as other expenses in work construction cost estimates. Such expenses shall be determined according to cost estimates conformable to designs, construction measures and specific conditions of works.

c/ Other expenses in work construction cost estimates exclude expenses for payment of loan interests during the construction period; expenses for demining operations; expenses for audit; expenses for verification and approval of investment capital finalization reports; expenses for scientific and technological research, application and use of new materials related to projects; initial working capital amounts for construction investment projects for commercial purposes; expenses for non-load and load testing of technological and production lines under regulations before handover; expenses for appraisal of construction investment feasibility study reports and construction investment techno-economic reports; royalty tax amounts, charges, fees and other related cost and expense items calculated for whole projects.

7. Contingency expenses in work construction cost estimates shall be determined under Clause 7, Article 12 of Decree No. 10/2021/ND-CP, specifically as follows:

a/ Contingency expenses for newly arising volumes and jobs shall be calculated in percentages (%) of total construction costs, equipment costs, project management expenses, construction investment consultancy expenses and other expenses.

b/ Contingency expenses for inflation shall be determined on the basis of projected work construction time and schedule (in quarter or year) and construction price indexes conformable to types of construction works, taking into account possibilities of price fluctuations in the country and the world.        

8. Summarized total cost estimates specified in Clause 3, Article 11 of Decree No. 10/2021/ND-CP shall be made under the guidance provided in Section 3 of Appendix II to this Circular.

9. Adjustment of work construction cost estimates shall be carried out under Article 15 of Decree No. 10/2021/ND-CP and by the method guided in Section 4 of Appendix II to this Circular.

Article 5. Costs and expenses in bidding package cost estimates

1. Construction bidding package cost estimates include some or all of the following costs and expenses: construction costs, other related costs and expenses, and contingency expenses of bidding packages.

2. Equipment procurement bidding package cost estimates include some or all of the following expenses: expenses for procurement of work equipment and technological equipment; expenses for equipment processing and manufacturing; expenses for management of equipment procurement; expenses for purchase of copyright of software for use for equipment; expenses for training and technology transfer; expenses for transportation; other related expenses, and contingency expenses of bidding packages.

3. Equipment installation bidding package cost estimates include some or all of the following expenses: expenses for equipment installation, testing and calibration; expenses for trial operation of equipment according to technical requirements; other related expenses, and contingency expenses of bidding packages.

4. Construction investment consultancy bidding package cost estimates include some or all of the following expenses: expenses for performance of construction investment consultancy jobs; other related expenses, and contingency expenses of bidding packages.

5. Mixed bidding package cost estimates (including also the bidding package cost estimates specified in Clause 2, Article 17 of Decree No. 10/2021/ND-CP): Depending on the scope, characteristics and specific conditions of bidding packages, mixed bidding package cost estimates include some or all of the bidding package expenses specified in Clauses 1, 2, 3 and 4 of this Article.

Article 6. Determination of the bidding package cost estimates specified in Clauses 2 and 3, Article 17 of Decree No. 10/2021/ND-CP

1. Construction bidding package cost estimates:

a/ Construction costs in construction bidding package cost estimates shall be determined under Clause 2, Article 4 of this Circular.

b/ Based on specific conditions of bidding packages, construction bidding package cost estimates may be added with one or some of other related expenses for performance of jobs within the scope of such bidding packages, such as expenses for removal of special construction machinery and equipment into and out of construction sites; expenses for assurance of traffic safety for construction; expenses for restoration of technical infrastructure facilities affected by the construction; expenses for material warehouses and storing yards; expenses for building of shelters for machinery, machinery foundations, and power, compressed air and water supply systems at construction sites; expenses for installation and dismantlement of cement concrete mixers, asphalt concrete mixers, rail-travelling cranes, tower cranes, and other similar construction machinery and equipment, and some other expenses related to such bidding packages.

c/ Contingency expenses in construction bidding package cost estimates include contingency expenses for newly arising volumes and jobs and contingency expenses for inflation during the period of performance of such bidding packages.

2. Equipment procurement bidding package cost estimates:

a/ Expenses in equipment procurement bidding package cost estimates shall be determined under Points a, b and c, Clause 3, Article 4 of this Circular.

b/ Based on specific conditions of bidding packages, equipment procurement bidding package cost estimates may be added with one or some of other related expenses for performance of jobs within the scope of such bidding packages.

c/ Contingency expenses in equipment procurement bidding package cost estimates include contingency expenses for newly arising volumes and jobs and contingency expenses for inflation during the period of performance of such bidding packages.

3. Equipment installation bidding package cost estimates:

a/ Expenses for installation, testing, calibration and trial operation of equipment in equipment installation bidding package cost estimates shall be determined under Points d and dd, Clause 3, Article 4 of this Circular.

b/ Based on specific conditions of bidding packages, equipment installation bidding package cost estimates may be added with one or some of other related expenses for performance of jobs within the scope of such bidding packages.

c/ Contingency expenses in equipment installation bidding package cost estimates include contingency expenses for newly arising volumes and jobs and contingency expenses for inflation during the period of performance of such bidding packages.

4. Construction investment consultancy bidding package cost estimates:

a/ Consultancy expenses in construction investment consultancy bidding package cost estimates shall be determined under Clause 5, Article 4 of this Circular.

b/ Based on specific conditions of bidding packages, construction investment consultancy bidding package cost estimates may be added with one or some of other related expenses for performance of jobs within the scope of such bidding packages.

c/ Contingency expenses in construction investment consultancy bidding package cost estimates include contingency expenses for newly arising volumes and jobs and contingency expenses for inflation during the period of performance of such bidding packages.

5. Mixed bidding package cost estimates and bidding package cost estimates specified in Clause 2, Article 17 of Decree No. 10/2021/ND-CP: Based on contents and characteristics of specific bidding packages, cost estimates of such bidding packages may include some or all of the expenses specified in Clauses 1, 2, 3 and 4 of this Article.

6. Bidding package cost estimates specified in Clauses 1, 2, 3 and 4 of this Article shall be determined under the guidance provided in Section 2 of Appendix II to this Circular.

Article 7. Determination of the bidding package cost estimates specified in Clause 4, Article 17 of Decree No. 10/2021/ND-CP

1. Based on approved work construction cost estimates, project owners shall determine by themselves bidding package cost estimates, specifically as follows:

a/ Determining the scope and contents of to-be-performed jobs of bidding packages;

b/ Determining the composition and items of expenses in bidding package cost estimates according to the scope and contents of to-be-performed jobs of bidding packages on the basis of approved work construction cost estimates.

c/ Updating volumes, unit prices and prices of expense items conformable to market prices in work construction areas and the State’s relevant policies at the time of determination of bidding package cost estimates, technical instructions and specific requirements of bidding packages regarding the expense items determined under Point b, Clause 1 of this Article.

2. Other related expenses of bidding packages shall be determined under Point b, Clause 1; Point b, Clause 2; Point b, Clause 3; and Point b, Clause 4, Article 6 of this Circular to conform to specific conditions and characteristics of such bidding packages and approved work construction cost estimates.

3. Contingency expenses in bidding package cost estimates shall be determined like the contingency expenses in work construction cost estimates specified in Section 1 of Appendix II to this Circular, provided that total contingency expenses of bidding package cost estimates do not exceed contingency expenses in approved work construction cost estimates.

Article 8. Management and announcement of construction prices under Clause 2, Article 26 of Decree No. 10/2021/ND-CP

1. Work construction unit prices announced by provincial-level People’s Committees under Clause 2, Article 26 of Decree No. 10/2021/ND-CP serve as a basis for determination and management of work construction investment costs in their localities. Work construction unit prices announced by provincial-level People’s Committees shall be determined on the basis of construction norms issued by competent agencies and prices of the cost elements specified in Clauses 3, 4 and 5 of this Article as appropriate to the time of determination of such unit prices. Prices of cost elements include construction material prices, construction labor unit prices, and construction machinery shift and equipment prices.

2. Construction material prices, construction labor unit prices, and machinery shift and construction equipment prices shall be regularly announced by provincial-level Departments of Construction under Clause 2, Article 26 of Decree No. 10/2021/ND-CP and Clauses 3, 4 and 5 of this Article.

3. Management and announcement of construction material prices:

a/ Announced construction material prices must conform to market prices, quality standards, origin, and capacity and scope of material supply at the time of announcement. An announced list of construction materials shall be selected from lists of construction materials available in the system of norms issued by competent agencies and lists of construction materials available in the market.

b/ Provincial-level Departments of Construction shall assume the prime responsibility for, and coordinate with related agencies in, organizing survey, collection of information and determination of construction material prices in their localities; announce construction material prices according to Form No. 01 provided in Appendix VIII to this Circular; and send announcement results to the Ministry of Construction for monitoring and management, enclosed with Microsoft Excel files for updating to the database specified in Clause 3, Article 29 of Decree No. 10/2021/ND-CP.

c/ In case of necessity, provincial-level Departments of Construction shall announce construction material prices on a monthly basis for construction materials with fluctuating prices to meet requirements of the management of construction investment costs. The deadline for announcement of construction material prices in a quarter or a month is the 15^th of the first month of the subsequent quarter or the 10^th of the subsequent month, respectively.

4. Management and announcement of construction labor unit prices:

a/ Construction labor unit prices announced in localities must conform to construction labor prices on the labor market of such localities, and conform to the nature and characteristics of jobs of construction workers; and must be inclusive of wages and wage-based allowances depending on the nature and characteristics of construction production and some of expenses payable by workers under regulations. Expenses payable by workers under regulations include social insurance, health insurance and unemployment insurance premiums, trade union dues and some other payables.

b/ Workday unit prices of construction workers shall be determined for the law-prescribed working time (8 hours per day and 26 days per month) for different groups of workers directly engaged in construction production and suitable to occupational skills levels for different worker grades and ranks in the system of norms issued by competent state agencies.

c/ Lists of groups, grades and ranks of construction workers and methods of determination of construction labor unit prices are provided in detail in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of works.

d/ Provincial-level Departments of Construction shall assume the prime responsibility for, and coordinate with related agencies in, carrying out or hiring capable consultants to carry out surveys, collect information, and refer to the bracket of construction labor unit prices announced by the Ministry of Construction in order to determine construction labor unit prices in their localities; announce construction labor unit prices according to Form No. 02 provided in Appendix VIII to this Circular; and send announcement results to the Ministry of Construction for monitoring and management, enclosed with Microsoft Excel files for updating to the database specified in Clause 3, Article 29 of Decree No. 10/2021/ND-CP.

dd/ The deadline for announcement of construction labor unit prices in a year is January 15 of the subsequent year.

5. Management and announcement of construction machinery shift and equipment prices:

a/ Announced construction machinery shift and equipment prices must conform to categories, capacity, major technical indicators, nature and characteristics of each type of machinery and equipment. An announced list of construction machinery and equipment shall be selected from lists of construction machinery and equipment available in the system of norms issued by a competent state agency and the list of construction machinery and equipment available on the market.

b/ Construction machinery shift and equipment prices shall be determined for every law-prescribed work shift (8 hours) of machinery and equipment and must conform to waste norms and basic data for calculation of machinery shift prices issued by the Ministry of Construction and conform to lists of construction machinery and equipment available in the system of norms issued by a competent state agency.

c/ Construction machinery shift and equipment prices are inclusive of all or some of expense items such as expenses for depreciation, expenses for repair, expenses for fuel and energy, expenses for machinery and equipment operators, and other expenses for machinery. Construction machinery shift and equipment prices are exclusive of the expenses specified at Point b, Clause 6, Article 4 of this Circular.

d/ Waste norms and basic data for determination of machinery shift prices and methods of determination of construction machinery shift and equipment prices are provided in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of works.

dd/ Provincial-level Departments of Construction shall assume the prime responsibility for, and coordinate with related agencies in, carrying out or hiring capable consultants to carry out surveys, collect information, and refer to original costs of machinery shift prices announced by the Ministry of Construction in order to determine construction machinery shift and equipment prices in their localities; announce construction machinery shift and equipment prices according to Form No. 03 provided in Appendix VIII to this Circular; and send announcement results to the Ministry of Construction for monitoring and management, enclosed with Microsoft Excel files for updating to the database specified in Clause 3, Article 29 of Decree No. 10/2021/ND-CP.

e/ The deadline for announcement of construction machinery shift and equipment prices in a year is January 15 of the subsequent year.

6. Enterprises manufacturing and supplying construction materials or supplying construction labor; enterprises supplying or leasing construction machinery and equipment in localities; project owners and contractors winning bids for construction investment projects shall provide information on prices of cost elements to serve price announcement by provincial-level Departments of Construction under Clause 2 of this Article.

Article 9. Determination of work construction prices

1. Work construction prices are inclusive of detailed construction unit prices and general construction prices. Work construction prices shall be determined under Clauses 2 and 3, Article 24 of Decree No. 10/2021/ND-CP and guided in detail in Appendix IV to this Circular.

2. Project owners shall use the system of work construction prices specified in Clauses 1 and 2, Article 26 of Decree No. 10/2021/ND-CP and Clauses 1 and 2, Article 8 of this Circular as a basis for determination and management of construction investment costs. In case of organizing the determination of work construction prices according to detailed construction unit prices or general construction prices based on construction norms, construction material prices, construction labor unit prices, and construction machinery shift and equipment prices shall be determined under Clauses 3, 4 and 5 of this Article.

3. Construction material prices:

a/ Construction material prices announced by competent state agencies under Clause 3, Article 8 of this Circular serve as a basis for determination of work construction prices.

b/ In case construction materials are not yet included in price announcements or are included in price announcements but their prices remain inappropriate, construction material prices used for determination of work construction prices must comply with the guidance provided in Section 1.2.1 of Appendix IV to this Circular.

c/ It is encouraged to choose environment-friendly construction materials made with economical use of natural resources, minerals and energy upon formulation of feasibility study reports and construction designs and determination of construction investment costs for works and projects while ensuring investment efficiency and meeting projects’ requirements.

d/ In case projects require the use of special construction materials that are not common on the market or the use of imported materials, such requirement shall be accompanied by specific commentaries in prefeasibility study reports, feasibility study reports, techno-economic reports, and construction design commentaries.

4. Construction labor unit prices:

a/ Construction labor unit prices announced by competent state agencies under Clause 4, Article 8 of this Circular serve as a basis for determination of work construction prices.

b/ In case construction labor unit prices announced by competent state agencies are not conformable to specific characteristics of jobs, works or projects, project owners shall organize surveys and determine construction labor unit prices by the methods provided in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of works for application upon the determination of work construction prices. In the course of determination of construction labor unit prices, provincial-level Construction Departments shall provide guidance on correctness and appropriateness of bases for and methods of determination of construction labor unit prices when investors so request.

c/ Project owners shall send dossiers of results of determination of construction labor unit prices under Point b of this Clause to provincial-level Departments of Construction for monitoring and management; such dossiers must show bases for, and methods and results of, the determination of construction labor unit prices, forms (if any) required by such methods; and provincial-level Departments of Construction shall summarize and report them on an annual basis to the Ministry of Construction.

5. Construction machinery shift and equipment prices:

a/ Construction machinery shift and equipment prices announced by competent state agencies under Clause 5, Article 8 of this Circular serve as a basis for determination of work construction prices.

b/ In case construction machinery shift and equipment prices have not yet been announced by competent state agencies or have been announced but remain unconformable to use requirements and construction conditions of works or projects, project owners shall organize surveys and determine such prices by the methods provided in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of works for application upon the determination of work construction prices. In the course of determination of construction machinery shift and equipment prices, provincial-level Departments of Construction shall provide guidance on correctness and appropriateness of bases for and methods of determination of such prices when project owners so request.

c/ Project owners shall send dossiers of results of determination of construction machinery shift and equipment prices under Point b of this Clause to provincial-level Departments of Construction for monitoring and management; such dossiers must show bases for, and methods and results of, the determination of construction machinery shift and equipment prices, forms (if any) required by such methods; and provincial-level Departments of Construction shall summarize and report them on an annual basis to the Ministry of Construction.

6. For a work constructed in 2 or more provincial-level administrative units, its owner shall determine work construction prices under Clause 3, Article 26 of Decree No. 10/2021/ND-CP, ensure convenience in the determination of costs and expenses, economy and efficiency of projects, and suitability to capacity to supply resources under implementation plans. 

Article 10. Construction price indexes

1. Construction price indexes shall be announced by competent state agencies under Clause 3, Article 27 of Decree No. 10/2021/ND-CP in a timely and objective manner to reflect fluctuation of market prices during the given period, exclusive of expenses for compensation, support and resettlement and payment of loan interests during the construction, and initial working capital for production or business activities. The unit of calculation of construction price indexes is percentage (%).

2. The selection of the list of construction works serving the determination and announcement of construction price indexes must be based on management requirements, regulations on project and work construction investment cost management, and characteristics of work types in localities. The number of representative works on the selected list of construction works for which construction price indexes are determined must be at least 3.

3. The cost structure used for determination of construction price indexes must be aggregated from statistical data, conformable to the cost structure under regulations on management of construction investment costs, and used on a stable basis until there is a change in the original point of time specified at Point a, Clause 5 of this Article.

4. Selection of input cost elements for determination of construction price indexes

a/ Representative input cost elements for determination of construction price indexes are costs of materials of different types, labor and major construction machinery for works or work types; and shall be selected on the principle that costs of such types of materials, labor and construction machinery must account for more than 80% of total costs of materials, labor and construction machinery of such works. The list of materials for determination of construction price indexes must be consistent in terms of type, specification and label. The list of construction labor for determination of construction price indexes must be consistent in terms of construction worker group, grade and rank. The list of construction machinery and equipment for determination of construction price indexes must be consistent in terms of category and capacity.

b/ Construction material prices, construction labor unit prices, and construction machinery and equipment shift rates shall be determined under Clause 2, Article 8, and Point b, Clause 3; Point b, Clause 4; and Point b, Clause 5, Article 9 of this Circular.

5. Original point of time and point of time for announcement of construction price indexes by competent state agencies:

a/ Original point of time is the year 2020, comparison time is the time when construction price indexes are announced in comparison with those at the original point of time. The Ministry of Construction shall provide the original point of time as soon as it is changed for localities to make appropriate adjustments.

b/ Construction price indexes for a quarter shall be announced before the 15^th of the first month of the subsequent quarter. Construction price indexes for a year shall be announced before the January 15 of the subsequent year.

c/ Competent state agencies shall consider and decide cases of necessity to  announce construction price indexes on a monthly basis to meet requirements of the construction investment cost management and construction contract price adjustment in localities. Construction price indexes for a month shall be announced before the 10^th of the subsequent month.

6. Based on the list of construction works and methods for determination of construction price indexes provided in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of construction works, and Clauses 1 thru 5 of this Article, provincial-level Departments of Construction shall determine construction price indexes for announcement under Point b, Clause 3, Article 27 of Decree No. 10/2021/ND-CP.

7. The determination of construction prices indexes for adjustment of contract prices under Clause 4, Article 27 of Decree No. 10/2021/ND-CP shall be as follows:

a/ Construction price index types selected for calculation and adjustment of construction contract prices must conform to those specified in Clause 2, Article 27 of Decree No. 10/2021/ND-CP and agreements in such contracts.

b/ The cost structure for determination of construction price indexes shall be determined in accordance with the Circular guiding the adjustment of construction contract prices, and Circular providing methods of determination of techno-economic indicators and takeoff of quantities of construction works.

c/ The selection of input cost elements for determination of construction price indexes must comply with Clause 4 of this Article.

d/ Original point of time and time of comparison for determination of construction price indexes must be based on agreements in contracts  and contract performance progress in accordance with regulations on construction contracts.

dd/ The list of dossiers for collection of opinions on construction price indexes must comply with the guidance provided in Appendix IX to this Circular.

Article 11. Construction investment ratio

1. The construction investment ratio announced by the Ministry of Construction under Clause 1, Article 26 of Decree No. 10/2021/ND-CP serves as a basis for determination of preliminary total construction investment and total construction investment of projects, and determination and management of construction investment costs at the stage of project preparation. The construction investment ratio for a year shall be announced before January 31 of the subsequent year.

2. The construction investment ratio specified in Clause 2, Article 25 of Decree No. 10/2021/ND-CP shall be announced on an annual basis, exclusive of expenses for performance of a number of jobs to meet specific requirements of a project or work, including:

a/ Expenses for compensation, support and resettlement;

b/ Expenses for payment of loan interests during the construction investment period for projects borrowing loans;

c/ Initial working capital for construction investment projects for production or business purposes;

d/ Contingency expenses for additional volumes and jobs and for price inflation during the project implementation period;

dd/ A number of specific expenses of each project, such as expenses for environmental impact assessment and handling of environmental impacts of projects; expenses for international quality registration and monitoring of work deformities; expenses for inspection of work quality; expenses for special reinforcement of work foundations; expenses for hiring foreign consultants; and other specific expenses.

3. Construction investment ratio shall be determined based on collected data and practical calculations; or based on available databases; or based on all of them. The method of determination of construction investment ratio must comply with the guidance provided in the Circular guiding methods of determination of techno-economic indicators and takeoff of quantities of construction works.

Article 12. Conversion of construction investment funds

1. Conversion of work construction investment funds means conversion of investment cost and expense items, including expenses for compensation, support and resettlement (if any), construction costs, equipment costs, project management expenses, construction investment consultancy expenses, and other costs and expenses, to prices by the time of project handover for putting into operation. The conversion of construction investment funds must reflect all paid investment costs and expenses of construction investment projects at the time of conversion. Reports on conversion of construction investment funds shall be made together with account-finalization dossiers for submission to persons competent to decide on investment for approval.

2. The conversion of construction investment funds shall be carried out for projects and works with a work construction period exceeding 2 years from the date of construction commencement until the date of acceptance test of completed works.

3. Methods of conversion of work construction investment funds, and forms of reports on results of  conversion of work construction investment funds must comply with the guidance provided in Appendix VII to this Circular.

Article 13. Construction investment consultancy expenses

1. Construction investment consultancy expenses shall be determined under Article 31 of Decree No. 10/2021/ND-CP, and the following specific provisions:

a/ Construction investment consultancy expenses shall be determined in percentage (%) as specified in the Circular providing construction norms.

b/ For consultancy jobs for which norms are unavailable or available but inappropriate, consultancy expenses shall be determined by the estimation method to be conformable to to-be-performed jobs under the guidance provided in Section II, Appendix VI to this Circular.

c/ For a number of construction investment consultancy jobs to be performed before total construction investment and work construction cost estimates are determined, construction investment consultancy expenses shall be determined on the basis of the approved value or signed consultancy contracts in accordance with law.

d/ Expenses for specialized construction testing shall be determined by the estimation method like construction costs under Clause 2, Article 4 of this Circular.

dd/ Expenses for construction survey shall be determined under the guidance provided in Appendix V to this Circular.

2. Expenses for hiring foreign consultants to perform a number of  construction investment consultancy jobs shall be determined under Article 32 of Decree No. 10/2021/ND-CP and relevant regulations in conformity with international practices. Methods of estimation of expenses for hiring foreign consultants must comply with the guidance provided in Section III, Appendix VI of this Circular.

Article 14. Effect

1. This Circular takes effect on October 15, 2021.

2. This Circular replaces the Minister of Construction’s Circular No. 09/2019/TT-BXD of December 26, 2019, guiding the determination and management of construction investment costs; the Minister of Construction’s Circular No. 11/2019/TT-BXD of December 26, 2019, guiding the determination of construction machinery and equipment shift rates; the Minister of Construction’s Circular No. 14/2019/TT-BXD of December 26, 2019, guiding the determination and management of construction price indexes; the Minister of Construction’s Circular No. 15/2019/TT-BXD of December 26, 2019, guiding the determination of unit prices of construction labor; the Minister of Construction’s Circular No. 16/2019/TT-BXD of December 26, 2019, guiding the determination of project management and construction investment consultancy expenses; the Minister of Construction’s Circular No. 18/2019/TT-BXD of December 26, 2019, guiding the conversion of construction investment funds; and the Minister of Construction’s Circular No. 02/2020/TT-BXD of July 20, 2020, amending and supplementing a number of articles of 4 Circulars concerning management of construction investment costs.-

For the Minister of Construction
Deputy Minister
BUI HONG MINH