Circular No. 12/2000/TT-BXD dated October 25, 2000 of the Ministry of Construction guiding the management of investment expenditures on the construction of infrastructure projects under program 135

The construction cost estimate of an infrastructure project shall be elaborated on the basis of construction and installation work volume calculated according to the technical design for construction, capital construction unit costs promulgated by the provincial-level People’s Committees and such costs and expenses as: General costs, pre-calculated taxable income and output value added tax (Appendix No.1 to this Circular). Concretely as follows:

1. Labor cost in the unit costs shall be applied under the guidance in the capital construction unit cost index of localities. In cases where

When it is necessary to separate the labor cost from the construction and installation cost estimates in order to employ local laborers under a package labor contract, the capital construction cost estimate norms and workday unit cost in the capital construction unit cost index of the localities shall serve as basis.

2. Materials cost: shall apply according to the capital construction unit cost index of localities. For projects executed by communes themselves or with appointed contractors that use assorted construction materials exploited on the spot such as bamboo, sand, stone, gravel, etc., the costs of such construction materials shall be calculated at their actual purchasing prices suitable to the construction materials price platform in such localities, and the construction materials price difference shall be accounted for clearing in the projects cost estimates.

3. Construction machine cost: shall be calculated according to the machine shift cost index promulgated together with the Construction Minister’s Decision No.1260/1998/QD-BXD of November 28, 1998

4. For general cost and pre-calculated taxable income, Appendix No.2 to this Circular shall apply.

Particularly for construction and installation volumes performed by communes themselves (under-taking to perform package volumes), the general cost shall be calculated equal to 40% of the prescribed general cost level. The use of such cost must be is Committees on the basis of actual implementation.

5. Value added tax (VAT) shall apply according to the current regulations. Particularly for infrastructure projects executed by communes themselves, value added tax amounts shall not be accounted in the projects cost estimates.

1. For an infrastructure project with a total investment capital level of under VND 1 billion, only the investment report is required. Content of investment reports shall comply with the Ministry of Planning and Investment’s guidance in Circular No.06/1999/TT-BKH of November 24, 1999 and Circular No.07/2000/TT-BKH of July 3, 2000. Projects eligible for investment reports shall not have to be evaluated. Investors shall have to submit investment reports to the authorities competent to decide the investment for examination, consideration and decision.

2. The expense level for making investment reports applicable to all infrastructure projects shall be equal to 0.37% of the total capital invested in the construction of projects already approved by the competent authorities.

Some other costs and expenses arising in the stage of construction investment execution mentioned below shall be calculated in the projects cost estimates:

1. Expenses for damage compensations and construction site clearance:

The determination of expenses for payment of compensations for damage in land, assets, crops and project construction site clearance (if any) shall comply with the provisions of the Government’s Decree No.22/1998/ND-CP of April 24, 1998 on compensations for damage when the State recovers land for use for purposes of national defense, security, national interest and public interest. The applicable compensation unit prices shall be those promulgated by the presidents of the provincial People’s Committees.

Basing themselves on their respective localities specific situation and conditions and the approved plans for damage compensations and site clearance, the provincial People’s Committees shall decide the content and unit prices applicable to the damage compensation and site clearance for the projects construction on the basis of fully mobilizing all on-spot resources for use for this work.

2. Construction survey costs:

Construction survey costs for geological and hydrological probing drills, earth and rock sampling, and measurement and drawing of maps of construction sites shall be determined according to the cost estimates norms of construction survey promulgated together with the Construction Ministry’s Decision No. 06/2000/QD-BXD of May 22, 2000 and Circular No.07/2000/TT-BXD of July 12, 2000 guiding the elaboration of construction survey unit costs and management of construction survey costs and construction survey cost index promulgated by the provincial-level People’s Committees.

3. Construction project designing cost:

a/ For infrastructure projects under Program 135, due to their small scale and simple techniques, the construction designing shall be made according to the one-step designing process (technical designing -construction).

CLvl: Difference in materials prices (if any);

TXL Value added tax rate prescribed for construction and installation activities;