Joint Circular No. 38/2004/TTLT-BTC-BXD dated April 26, 2004 of the Ministry of Finance and the Ministry of Construction guiding the notification and control of construction-material prices in the construction investment domain

JOINT CIRCULAR

GUIDING THE NOTIFICATION AND CONTROL OF CONSTRUCTION-MATERIAL PRICES IN THE CONSTRUCTION INVESTMENT DOMAIN

Pursuant to the Government's Decree No. 52/1999/ND-CP of July 8, 1999 promulgating the Regulation and Investment and Construction Management; Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Regulation and Investment and Construction Management, promulgated together with the Government's Decree No. 52/1999/ND-CP of July 8, 1999; and Decree No. 07/2003/ND-CP of January 30, 2003 amending and supplementing a number of the Regulation and Investment and Construction Management, promulgated together with the Government's Decree No. 52/1999/ND-CP of July 8, 1999 and Decree No. 12/2000/ND-CP of May 5, 2000;

Pursuant to the Government's Decree No. 170/2003/ND-CP of December 25, 2003 detailing the implementation of a number of articles of the Price Ordinance;

Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government's Decree No. 36/2003/ND-CP of April 4, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

In order to manage expenditures in construction investment, the Ministry of Finance and the Ministry of Construction hereby jointly guide the notification and control of construction-material prices in the construction investment domain for construction works as follows:

I. OBJECTS AND SCOPE OF REGULATION

This Circular guides the notification and control of construction-material prices in the construction investment domain for investment projects on construction of works using the State budget capital, the State-guaranteed credit capital, the State's development investment credit capital, State enterprises' development investment credit capital and other capital sources which are borrowed and paid by State enterprises themselves without the State's guarantee, prescribed in Articles 10, 11 and 12 of the Government's Decree No. 52/1999/ND-CP of July 8, 1999 promulgating the Regulation on Investment and Construction Management; Clauses 4, 5 and 6, Article 1 of the Government's Decree No. 12/2000/ND-CP of May 5, 2000 and Clauses 4, 5 and 6, Article 1 of the Government's Decree No. 07/2003/ND-CP of January 30, 2003. Besides, investment projects on construction of works using capital sources other than those mentioned above are encouraged for the application of this Circular's provisions.

For centrally-managed construction works which are built in any locality, the prices notified by such locality shall apply.

The construction material price levels notified to construction and installation sites are the maximum price levels used for calculation of unit prices, calculation of material expenditure compensation or adjustment of estimated value.

Prices of equipment in construction investment shall comply with the State's current regulations.

II. NOTIFICATION OF CONSTRUCTION-MATERIAL PRICES TO CONSTRUCTION AND INSTALLATION SITES

1. Quarterly, the provincial/municipal Finance Services shall coordinate with the provincial/municipal Construction Services (the two provincial/municipal Services) in notifying construction-material prices to construction and installation sites in compatibility with the price levels in their respective localities.

In case of necessity, monthly, the two provincial/municipal Services may make additional price notification and adjust prices of a number of new materials and materials with great price fluctuations.

2. The list of major and common materials in the material price notifications sent to construction and installation sites is in Appendix No. 1 to this Circular (not printed herein).

3. Basing themselves on the price levels and specific situation in their respective provinces or centrally-run cities, the provincial/municipal Finance Services and Construction Services shall determine the common construction-material prices on the local markets in order to notify the construction-material prices to construction and installation sites in their respective localities.

Where there are adequate grounds to determine construction-material prices at construction and installation sites according to Appendix No. 2 (not printed herein), the provincial/municipal Finance Services and Construction Services shall determine the supply sources, the average transport distances, road grades and quality categories of major and common construction materials for determination of construction material prices to construction and installation sites.

4. Construction materials used in works must satisfy technical requirements according to approved designs. For construction materials which are not included in price notifications, investors and construction and installation-contracting units shall base themselves on vouchers and invoices made according to the Finance Ministry's regulations, with their prices suitable to the market prices at the time of purchase and sale, to determine construction-material prices for the works and be totally responsible for the truthfulness and accuracy of such determination.

5. For construction works subject to separate construction unit prices, the methods of calculating construction-material prices to construction and installation sites in Appendix No. 2 shall serve as bases for determination of construction-material prices for use as basis for elaborating work construction unit prices.

6. In cases where works are situated in deep-lying areas or remote areas far from district townships of mountainous or island provinces, or where works are carried out according to lines,... with different conditions for the transport of construction materials to works, investors and relevant units shall base themselves on the methods of calculating construction-material prices to construction and installation sites (Appendix No. 2) to determine construction-material prices to works' construction and installation sites and report thereon to the two provincial/municipal Services for inspection and notification.

7. For localities adjacent to provinces or centrally-run cities, the two provincial/municipal Services shall exchange information with each other before making price notifications in order to avoid big disparities in construction-material prices.

III. IMPLEMENTATION ORGANIZATION

1. The Ministry of Finance and the Ministry of Construction shall conduct periodical or extraordinary examination and supervision of the notification of construction-material prices to construction and installation sites by the provinces and centrally-run cities.

2. The provincial/municipal People's Committees shall direct the provincial/municipal Finance Services and Construction Services to strictly notify the construction-material prices to construction and installation sites in their respective localities. Notifications of construction-material prices to construction and installation sites in localities must be sent to the Ministry of Finance and the Ministry of Construction.

3. The provincial/municipal Finance Services and Construction Services as well as relevant agencies shall regularly inspect and control the notification of construction-material prices to construction and installation sites in their respective localities.

If any violations are detected through the above-said inspection, all money differences paid contrary to regulations shall be handled according to current law provisions.

4. Investors and construction and installation contractors must base themselves on design requirements, regulations on management of quality of construction works, and this Circular's provisions to select the plans on purchase and use of construction materials for works with the highest economic efficiency.

This Circular replaces Joint Circular No. 03/TT-LB of July 27, 1996 of the Government Pricing Committee, the Ministry of Finance and the Ministry of Construction, guiding the notification and control of prices of construction materials and equipment in the investment and construction domain, and takes implementation effect 15 days after its publication in the Official Gazette.

If any problems arise in the course of implementation, the provincial/municipal People's Committees should report them to the Ministry of Finance and the Ministry of Construction for timely handling.