Circular No. 12/2017/TT-BXD dated November 30, 2017 of the Ministry of Construction guiding the determination and management of urban investment and development costs

THE MINISTRY OF CONSTRUCTION 

Circular No. 12/2017/TT-BXD dated November 30, 2017 of the Ministry of Construction guiding the determination and management of urban investment and development costs

Pursuant to the Resolution No. 1210/2016/UBTVQH13 dated May 25, 2016 of the Standing Committee of the National Assembly on classification of urban areas;

Pursuant to the Resolution No.1211/2016/UBTVQH13 dated May 25, 2016 of the Standing Committee of the National Assembly on standards and classification of administrative divisions;

Pursuant to the Government’s Decree No. 81/2017/ND-CP dated July 17, 2017 defining Functions, Tasks, Powers and Organizational Structure of Ministry of Construction;

Pursuant to the Government’s Decree No. 11/2013/ND-CP dated January 14, 2013 on management of urban investment and development;

At the request of the Director of the Institute of Construction Economics, the Director of the Department of Construction Economics, and the Director of the Urban Development Agency;

Minister of Construction promulgates a Circular to provide guidance on determination and management of urban investment and development costs.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of adjustment

This Circular provides guidance on determination and management of urban investment and development costs, including: formulation of urban classification project, urban development program, and proposals for development of an area into urban areas, and relevant costs.

Article 2. Subject of application

This Circular shall apply to organizations and individuals that use state funding to determine and manage the costs of formulation of urban classification project, urban development program, and proposals for development of an area into urban areas, and relevant costs.

Article 3. Principles for cost determination and management

1. Standard costs specified in the Appendix 1 enclosed herewith may be referred to in course of determining and managing costs of formulation of urban classification project and urban development program, and relevant costs.

2. Costs of formulation of urban classification project and urban development program, which are determined according to standard costs prescribed herein, shall be the basis for determining the estimate of consultancy procurement so as to serve the selection of consulting contractor as regulated by law.

3. Costs of formulation of formulation of urban classification project and urban development program, which are determined according to standard costs prescribed herein, shall include direct labor cost, management cost, and other costs of performing duties, and estimated taxable income, and exclude cost of making films illustrating the reality of urban development and VAT as regulated by law.

4. If the urban population scale or the number of district-level administrative divisions of a province falls into between two scales prescribed in the Appendix enclosed herewith, standard costs shall be determined by adopting interpolation method.

5. If the urban population scale or the number of district-level administrative divisions of a province is greater than the scale mentioned in this Circular, or costs of formulation of formulation of urban classification project and urban development program, which are determined according to standard costs prescribed herein, are not appropriate, cost estimates shall be made in accordance with guidance in the Appendix enclosed herewith.

Chapter II

DETERMINATION AND MANAGEMENT OF URBAN INVESTMENT AND DEVELOPMENT COSTS

Article 4. Cost determination

1. Urban investment and development costs determined according to standard costs:

a) Costs of formulating urban classification project shall be determined according to standard costs specified in Table 1 (the Appendix 1 enclosed herewith) in corresponding with the type of urban area to be upgraded.

b) Costs of formulating urban development program for the whole province shall be determined by multiplying the standard costs specified in Table 2 (the Appendix 1 enclosed herewith) by the number of district-level administrative divisions of that province.

c) Costs of formulating development program for an urban area shall be determined by multiplying the standard costs specified in Table 3 (the Appendix 1 enclosed herewith) by the population estimated according to the planning period of the approved master planning (regardless of the population estimated according to vision).

2. Urban investment and development costs determined according to cost estimates:

a) Costs of formulating project on classification of special-class urban areas, the national urban development program, the program for development of special-class urban areas and proposals for development of an area into urban areas are determined according to cost estimates which are prepared on the basis of duties given approval by competent authorities, contents and volume of works, and cost items specified in the Appendix 2 enclosed herewith.

b) In case of modification of the urban development program or the proposal for development of an area into urban area, the modification costs shall be determined according to cost estimates provided that the modification costs shall not exceed 70% of costs determined according to standard costs specified in this Circular (if standard costs of certain works are available) and 70% of costs specified in the approved cost estimate (for costs of works determined by preparing cost estimate).

c) Costs of appraisal council or collecting opinions from relevant organizations and specialists about the appraisal of the urban classification project, the urban development program or the proposal for development of an area into urban area shall be determined according to costs estimates provided that such costs shall not exceed 5% of the corresponding costs of formulating the urban classification project, the urban development program or the proposal for development of an area into urban area.

d) Costs of announcing decision on certification of urban area class, the urban development program or the area to be developed into an urban area shall be determined according to costs estimates provided that such costs shall not exceed 2% of the corresponding costs of formulating the urban classification project, the urban development program or the proposal for development of an area into urban area.

e) Costs of travel and accommodation of members of inspection teams in charge of comparing the project’s contents with the urban development status in a province; costs of travel and accommodation of officials of an local regulatory authority for preparing and submitting reports to the higher-level appraisal council shall be determined according to cost estimates in conformity with work-trip allowances regulated by the Ministry of Finance.

g) Costs of selecting consulting contractors and costs of appraising cost estimates shall be determined by application of relevant regulations.

Article 5. Cost management

1. People s Committees at all levels shall direct the planning of funding for performing duties specified in Article 1 herein in administrative divisions under their management. Funding for performing duties specified herein shall be provided by local government budget and mobilized from other legal sources of funding.

2. If a regulatory authority directly formulates the urban classification project or the urban development program without hiring any consultancy units, costs thereof shall be determined according to cost estimates and not exceed 70% of costs determined according to standard costs specified in this Circular. In such cases, costs of directly performing duties of such regulatory authority shall be managed and spent in accordance with financial policies for state administrative agencies.

3. If hiring consultancy units for formulation of the urban classification project, the urban development program or the proposal for development of an area into urban area, the cost estimate shall include VAT and management cost under signed consultancy agreements. Contents of a consultancy agreement for formulation of the urban classification project, the urban development program or the proposal for development of an area into urban area must conform to the law regulations on construction agreements and contracts.

4. The costs specified in Sections c, d, e Clause 2 Article 4 herein must be managed according to the approved cost estimates. Payment for such costs must be made in conformity with relevant regulations.

5. An investor may hire qualified and experienced consultants to determine and verify consulting costs for formulation of the urban classification project, the urban development program or the proposal for development of an area into urban area.

Article 6. Power to appraise and approve cost estimates

1. For urban classification projects:

a) People’s Committees of provinces or central-affiliated cities or authorized authorities shall organize appraisal and approval for cost estimates for formulation and appraisal of projects on classification of urban areas of special class and class I (for central-affiliated cities);

b) People’s Committees of districts shall organize appraisal and approval for cost estimates for formulation and appraisal of projects on classification of urban areas of class I (for provincial cities and cities affiliated to central-affiliated cities), and urban areas of class II, class III, class IV and class V.

2. For urban development programs and proposals for development of areas into urban areas:

a) Ministry of Construction organizes appraisal and approval for cost estimates of urban development programs and proposals for development of areas into urban areas (if the area to be developed into urban area comprises two provinces or more).

b) People’s Committees of provinces or authorized authorities organize appraisal and approval for estimates of costs of formulating and appraising the urban development program for the whole province and proposals for development of areas into urban areas (if the area to be developed into urban area comprises two districts of a province or more);

c) People’s Committees of districts organize appraisal and approval for estimates of costs of formulating and appraising the program for development of each urban area and proposals for development of areas into urban areas (if the area to be developed into urban area comprises administrative divisions under the management of the people’s committee of that district and area to be expanded);

3. The authorities competent to consider approving costs of formulating urban development programs or costs of formulating proposals for development of areas into urban areas shall have the power to consider approving cost estimates for modification thereof.

Chapter III

IMPLEMENTION ORGANIZATION

Article 7. Transitional provisions

1. If urban classification projects, urban development programs and proposals for development of areas into urban areas are formulated under contracts, payment of costs shall be made based on terms and provisions of the signed contracts.

2. If consulting contractors for formulation of urban classification projects, urban development programs and proposals for development of areas into urban areas have been selected but consultancy agreements are not yet signed, the competent authorities prescribed in Article 6 herein shall decide contract prices based on regulations of this Circular.

3. If estimates of costs of formulating urban classification projects, urban development programs and proposals for development of areas into urban areas have been given approval but selection of consulting contractors is not yet made, the competent authorities prescribed in Article 6 herein shall decide to adjust cost estimates based on regulations of this Circular.

Article 8. Effect

1. This Circular takes on February 01, 2018.

2. This Circular shall supersede the Circular No. 23/2010/TT-BXD dated December 23, 2010 of the Ministry of Construction providing guidance on determination of costs of formulating and appraising urban classification projects; Article 4 of the Circular No. 12/2014/TT-BXD dated August 25, 2014 of the Ministry of Construction providing guidance on formulating, appraising and approving urban development programs.

3. Any difficulties arising in the course of implementation of this Circular should be reported to the Ministry of Construction for consideration.

For the Minister

The Deputy Minister

Phan Thi My Linh