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THE
MINISTRY OF CONSTRUCTION
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
06/2003/TT-BXD
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Hanoi,
April 14, 2003
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CIRCULAR
GUIDING THE ESTIMATION AND MANAGEMENT OF EXPENDITURES ON
CONSTRUCTION OF WORKS WITH CAPITAL OF INTERNATIONAL DONORS
Pursuant to the Regulation on Management of
Investment and Construction, promulgated together with the Government's Decree No.52/1999/ND-CP
of July 8, 1999, Decree No.12/2000/ND-CP of May 5, 2000 and Decree
No.07/2003/ND-CP of January 30, 2003 amending and supplementing a number of
articles of the Regulation on Management of Investment and Construction,
promulgated together with 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.17/2001/ND-CP of May 4, 2001
promulgating the Regulation on Management and Use of Official Development
Assistance Sources;
Pursuant to the Government's Decree No.15/CP of March 4, 1994 defining the
functions, tasks, powers and organizational structure of the Ministry of
Construction;
In order to uniformly manage the expenditures on construction of works with
international donors' capital, the Ministry of Construction hereby guides the
principles for estimation and management of expenditures on construction of
works as follows:
I. GENERAL PROVISIONS
1. This Circular guides the uniform estimation
and management of expenditures on construction of works under construction
investment projects with the use of international donors' capital, which are
implemented through international bidding in Vietnam.
2. International donors' capital mentioned in
this Circular means the capital belonging to the Government's foreign loans and
international aids for development investment (including official development
assistance (ODA) capital), which shall be uniformly managed according to the
State Budget Law.
3. Where the guidances in this Circular are different
from the provisions of international treaties, agreements and/or documents
which the Government or the State of Vietnam has signed with international
donors, the provisions of such international treaties, agreements and/or
documents already signed with international donors shall be complied with.
4. The estimation of expenditures on
construction of works with the use of international donors' capital, which are
subject to international bidding in Vietnam, must comply with the guidances in
this Circular in order to manage expenditures on construction of works
according to laws.
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1. Total investment amount
The total amount of investment in projects using
international donors' capital shall be formed from the source of international
donors' capital and the source of domestically mobilized reciprocal capital.
The total investment amount shall be calculated and determined in the stage of
making the feasibility study reports and inscribed in the project investment
decisions.
The use of international donors' capital and
domestically mobilized reciprocal capital for work volumes, construction items
or bidding packages shall be calculated and specified for each project. The
contents, order of approval or adjustment (if any) of the total investment
amount of the projects shall comply with the current regulations.
2. The total cost estimates of
works
All works built with the use of international
donors' capital must be subject to the elaboration of total cost estimates of
the works and managed according to the provisions of this Circular.
The total cost-estimate of a work is the total
expenditure needed for the construction of the work and shall be calculated in
the stage of technical design. The total cost estimate of work covers the
expenses for construction and installation, for equipment, expenses for
consultancy, expenses for ground clearance, resettlement and rehabilitation,
other expenses, taxes and reserve expenditures.
All expenditure items in the total cost estimate
of work shall be determined according to the following principles and methods:
2.1. Expenses for construction and installation:
The construction and installation expense in the
total cost estimate means the expense for the performance of the entire
construction and installation volume of the work. The construction and
installation volume of a work shall cover:
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- The construction and installation volumes of
items, bidding packages performed by mode of selection of domestic
constructors;
- Other construction and installation volumes.
2.1.1. For construction and installation volumes
performed by mode of international bidding, the construction and installation
expenditures shall be determined on the basis of construction and installation
volume under the technical designs (or equivalent designs of the donors'
countries) and the unit prices of construction and installation under international
bidding. The elaboration of international bidding construction and installation
unit prices is guided in Section 3 below in cases where the volume cannot be
determined specifically by design or jobs with small, separate volumes, the
expenditure packages shall be made in lump sum in cost estimates, total cost
estimates.
2.1.2. For construction and installation volumes
performed through selection of domestic contractors, the construction and
installation expenses shall be determined according to the approved technical
designs and the capital construction unit prices in localities where the works
are constructed.
2.1.3. Other construction and installation
expenses: Depending on the specific nature of each work, other construction and
installation expenses mean the expenses for works in support and service of
construction such as makeshifts, camps, field offices, power and water supply,
information, temporary passages in service of construction, laboratories,
health stations, the expenses for traffic safety assurance, construction site
safety, post-construction ground restoration, removal of construction
equipment... shall be determined by method of estimation based on the specific
requirements of each work.
Other construction and installation expenses
constitute an independent item of the construction and installation expenses or
shall be distributed into various construction and installation items and
bidding packages.
2.2. Equipment expenses:
Equipment expenses (equipment procured from
overseas and domestically) shall be determined according to the quantity of
each type of equipment and the value for one ton or the corresponding type of
equipment. The equipment value covers the purchase price, expenses for
transportation, preservation, taxes, charges, insurance and other expenses (if
any).
For non-standard equipment domestically
manufactured or processed, the equipment expenses shall be determined on the
basis of the quantity of the to be-manufactured, a processed equipment and the
production and processing cost for one ton or the corresponding equipment and
other expenses as mentioned above. The production and processing costs of
non-standard equipment shall be determined under the current regulations.
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2.3. Consultancy expenses:
The consultancy expenses include the expenses
for works performed by foreign and domestic consultants.
For works performed by foreign consultants, the
consultancy expenses shall be determined on the basis of independent estimates
suitable to the requirements of using consultancy for projects, the guidance in
using consultancy of international donors and other regulations of Vietnam.
Where the works performed by foreign consultants are tendered, the consultancy
expenses shall be determined according to the value of signed consultancy
contracts.
For works performed by domestic consultants, the
consultancy expenses shall be calculated as equal to 1.2 time of the norm for
similar construction and investment consultancy work under the current
regulations. For consultancy works without any provisions on expense norms, the
Construction Ministry's guidance shall be complied with.
2.4. Expenses for ground clearance, resettlement
and rehabilitation:
The ground clearance, resettlement and
rehabilitation expenses include compensations for land, crops, architectures,
expenses for relocation, ground clearance, resettlement support or investment
in construction of resettlement areas, support for construction of technical
infrastructure (if any) and restoration of original state.
The above expenses shall be determined on the
basis of the current regulations of the State, the provisions of concluded
international agreements and other regulations as well as guidance of
international donors.
2.5. Other expenses
For other expenses related to the use of capital
of international donors such as expenses for compilation of project documents;
expenses for appraisal, supplementation and finalization of project documents,
expenses for project-preparing boards, payment of loan interests during the
construction period, expenses for international auditing, enhancement of
institutions, raising of community awareness, insurance premiums, bidding
participation guarantee and contract performance charge..., if there have been
no regulations of the State on spending norms, they shall be determined
according to international practice, regulations and guidance of international
donors, or determined by method of elaborating estimates to be submitted to
competent persons for approval. Other expenses of works shall be determined
under the State's current guidance.
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Including assorted taxes and charges payable
under the current regulations of the State, the provisions in concluded
international agreements and other regulations as well as guidance of
international donors (if any).
2.7. Reserve expenses:
Reserve expenses used for arising work volumes,
inflation and other unforeseeable cases during the construction period. The
reserve expenses represent 10% of the total expenses in the total cost
estimate. For projects with inflation reserve expenses being determined with
grounds or calculated in detail, the reserve expense for arising work volume
shall be equal to 7%.
3. International bidding
construction and installation unit prices
The unit prices for volume of construction and
installation performed through international bidding (hereinafter referred to
as international bidding construction and installation unit prices) shall
include constituents of expense, direct expenses, general expenses and profits
of contractors.
The contents and method of determining the
constituents of expenses in international bidding construction and installation
unit price shall be as follows:
3.1. Direct expenses in the unit price include
the expense for materials, labor expense, construction machinery expense.
3.1.1. Materials expense:
The materials expense in the unit price shall be
determined on the basis of the consumption of each type of materials and the
prices of such corresponding materials.
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The prices of building materials which are not
available on the domestic market and must be imported from regional countries
or international donors' countries (if so provided in the international
agreement. The domestic construction material prices shall be determined
according to the construction materials price notices of the competent
authorities in localities where the works are constructed. Types of
construction materials which are not mentioned in the price notices shall be
determined according to the market prices at the time of forming the unit
prices or similar reasonable prices of other completed works. The materials
prices do not include value added tax.
3.1.2. Labor expense:
The labor expense in the unit price shall be
determined on the basis of labor consumption level and corresponding workday
pay.
The labor consumption level means the number of
workdays (professional and non-professional), based on the current capital
construction estimated norms. For works with such level not yet prescribed or
already prescribed but not yet suitable to the characteristics, aesthetic and
technical requirements of the works, it shall be determined on the basis of the
specific requirements of the works.
The workday pay cover the basic wage, wage
allowances, expenses contracted directly to laborers and other particular
expenses (if any) shall be determined on the following principle: for works
requiring foreign labor, the workday pays shall be determined on the basis of
the wage floor of the equivalent labor titles in the region, for works
involving domestic labor, the wage shall be determined according to the current
regulations.
Where the conditions prescribed in Clause 1 of
Article 1 and Article 2 of the Government's Decree No.03/2001/ND-CP of January
11, 2001 amending and supplementing a number of articles of the Government's
Decree No.28/CP of March 28, 1997 are met when determining domestic labor's
wages, the increase coefficients prescribed in Circular No.04/2003/TT-BLDTBXH
of February 17, 2002 of the Ministry of Labor, War Invalids and Social Affairs
can be applied.
3.1.3. Expenses for construction machines
The construction machine expense in the unit
price shall be determined on the basis of a number of construction machine
working shifts and the construction machine working shift price.
The number of construction machine working
shifts shall be based on the current estimated norms.
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3.2. General expenses:
The general expenses include expenses in service
of the contractors' activities in the course of preparing for, implementing and
completing the construction of works such as expenses for managerial apparatus,
travel means, information and communications, offices and office equipment,
expenses in service of operation of the offices and other general expenses. The
general expenses shall be determined in percentages of the direct expenses in
the construction and installation unit prices according to the current
regulations.
3.3. Profits of contractors:
The contractors' profits shall be determined as
equal to 6% of the direct expenses and general expenses.
4. International bidding
package estimates
4.1. Based on the project bidding plans, the
bidding package estimates (consultancy, equipment, construction and
installation...) shall be elaborated to determine the bidding packages or serve
as basis for evaluation of bid dossiers. Where the bidding package estimates
are elaborated when the total cost estimates are not yet approved, the
elaboration of total work cost estimates must still comply with the provisions
in Section 2 of Part II above.
4.2. Depending on the bidding requirements and
scopes, the construction and installation bidding package estimates shall cover
only construction and installation expenses or cover both the construction and
installation expenses and other expenses distributed to each bidding package.
The construction and installation expense (including the reserve expense) of
each bidding package shall be determined under the guidance in Clause 2.1,
Section 2, Part II above.
4.3. For construction bidding packages performed
through bidding in form of design- equipment and supplies provision -
construction contracts (called EPC bidding packages for short), the value of
the EPC bidding package in the elaborated total construction cost estimate
shall cover a part or whole of the consultancy and designing expense,
construction and installation expense, equipment expense, reserve expense and
other distributed expenses (if any).
The management of the EPC contract expenditures
shall comply with the current regulations of the Ministry of Construction.
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1. Estimate norms and
international bidding construction and installation unit price
1.1. When elaborating the international bidding
construction and installation unit prices, the current estimate norm system
shall apply. For construction and installation works not yet included in the
current estimate norm system or for which the application of the current
estimate norm system is not suitable and foreign norms and standards should be
used or norms suitable to the characteristics of the work construction and
installation shall be applied, the Construction Ministry's consent is required.
1.2. The international bidding construction and
installation unit prices shall be elaborated together with the total
construction estimates by the construction designing consultants. They shall be
examined by investors in term of their reasonability and forwarded together
with the total cost estimates when submitting to the competent authorities the
designs and total cost estimates for approval. The total cost
estimate-appraising agencies shall check the compliance of these construction and
installation unit prices with the current regulations.
2. Currencies and exchange
rates in the total cost estimates, construction estimates
The currencies used for elaboration, appraisal
and approval of the total cost estimates shall be the currencies inscribed in
the credit agreements with international donors and the Vietnamese currency.
The total cost estimate values shall be converted into Vietnam dong (VND) or US
dollars (USD) at the exchange rates available at the time of submitting the
total cost estimates, estimates for appraisal and approval.
3. Adjustment of total
construction cost estimates
3.1. In the course of executing projects, if any
works, construction items or bidding packages should be added under the written
approvals of the competent persons and the international donors, the investors
must adjust and add the total cost estimates, estimates.
3.2. If the post-adjustment/ supplementation
value of the total cost estimate exceeds 10% of the approved total cost
estimate (including reserve expenses after offsetting, subtracting the values
of construction items), the investors must re-approve the total cost estimate
according to current regulations.
3.3. The post adjustment/supplementation value
of the total cost estimate must not exceed the total investment amount already
approved. In cases where it exceeds the approved total investment, it must be
submitted to the persons competent to decide on the investment for
consideration and decision and the total investment must be adjusted before adjusting
and supplementing the total cost estimate.
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4.1. Investors may get the payment for the
arising volumes strictly according to the current regulations and take
responsibility therefor.
4.2. For the arising volumes with unit prices
inscribed in the signed contracts, they shall be determined according to these
unit prices. In cases where the arising volumes still lack the unit prices to
be inscribed in the contracts signed between the investors and the contractors,
the investors shall have to elaborate the unit prices under the guidance in
this Circular and submit them to the competent persons for approval. Pending
the approval by the competent persons, the investors shall be allowed to pay to
the contractors a maximum amount equal to 70% of the cost estimate value
according to those temporarily calculated unit prices. The payment for the
arising volumes without unit prices shall be made according to the unit prices
already approved by the competent persons.
5. Expenses for newly added
project items
5.1. For newly added project items, which are,
however, still implemented by the contractors that are constructing the
projects, the expenses therefor shall be determined according to the similar
unit prices of the same type stated in the previously signed contracts. In case
of the absence of the similar unit prices of the same type in the contracts
signed between investors and contractors, the provisions in Clause 4.2 of
Section 4, Part III above shall be complied with.
Expenses for consultancy on investment in the
construction of these newly added items shall be determined according to the
current regulations.
5.2. For newly added items which are implemented
through bidding or designation by other contractors, the construction and
installation unit prices for works belonging to these items shall comply with
the current regulations.
IV. IMPLEMENTATION
ORGANIZATION
1. This Circular uniformly applies nationwide
and takes effect 15 days after its publication on the Official Gazette.
2. Construction projects which are funded with
other capital sources and opened to international bidding in Vietnam may
consult and apply the provisions in this Circular to the elaboration and
management of expenditures on the construction of works.
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MINISTER OF CONSTRUCTION
Nguyen Hong Quan