CIRCULAR

INSTRUCTIONS ABOUT SEVERAL REGULATIONS ON DETERMINATION AND MANAGEMENT OF CONSTRUCTION INVESTMENT COSTS

Pursuant to the Law on Construction dated June 18, 2014; the Law on Amendments and Supplements to the Law on Construction dated June 17, 2020;

Pursuant to the Government's Decree No. 81/2017/ND-CP dated 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 dated February 9, 2021 on administration of investment and construction costs and expenses;

Upon the request of the Director of the Construction Economics Department;

The Minister of Construction herein promulgates the Circular providing instructions about several regulations on determination and management of construction investment costs.

Article 1. Scope

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Article 2. Subjects of application

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

Article 3. Preliminarily estimated total investment, total investment in construction

1. Preliminarily estimated total investment is determined under clause 1 and 2 of Article 4 in the Decree No. 10/2021/ND-CP and the method under the instructions given in Section I of Appendix I herein. In case where none of data on unit cost rate of investment in construction has been announced, the preliminarily estimated total investment is calculated based on data on costs of similar projects already completed, adjusted or supplemented with other necessary costs and requires component costs to be converted depending on the construction site, characteristics and property or attribute of the project and time of determination.

2. Total investment is determined under Article 6 in the Decree No. 10/2021/ND-CP and the method under the instructions given in Section II of Appendix I herein and under several specific regulations as follows:

a) Bases for determination of total investment include conceptual or feasibility design, applicable regulations for standards and standards, solutions related to main technologies, techniques and equipment; solutions related to main architecture and structures; solutions related to main construction activities and building materials; conditions and plans for implementation of the project and other necessary requirements of the project.

b) If there is none of regulations or bases for calculation of several cost items included as components of project management costs, construction investment consultancy costs or other project costs, these cost items may be part of the estimate of total investment in construction.

3. As regards any project using the official development assistance capital (shortly called ODA), preferential loans from foreign sponsors, in addition to the costs calculated in the preliminary estimate of total investment, when calculating total investment in construction, other necessary cost items may be added with the aim of ensuring it matches property and characteristics or attributes of a construction investment project using this capital source in accordance with the regulations of treaties, ODA capital or preferential loan agreements already in effect and other regulations of relevant laws.

4. As for investment projects existing in the public-private partnership mode (hereinafter referred to as PPP projects), in the calculation process, other necessary cost items prescribed in laws on investment made in the public-private partnership mode are taken into account.

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1. Construction cost estimate is made under Article 12 in the Decree No. 10/2021/ND-CP and the method under the instructions given in Section 1 of Appendix II herein. Cost items included in a construction cost estimate include: Construction costs, equipment costs, project management costs, construction investment consultancy costs, other costs and contingency costs.

2. Construction costs included in a construction cost estimate is determined under clause 2 of Article 12 in the Decree No. 10/2021/ND-CP and the method under the instructions given in Appendix III herein. Construction costs included in a construction cost estimate include: Direct costs, indirect costs, pre-assessed taxable income and value-added taxes. Direct costs are determined under point a of clause 2 of Article 12 in the Decree No. 10/2021/ND-CP, the detailed instructions given in Section I of Appendix III herein and several specific regulations as follows:

a) Quantities or volumes taken off or calculated based on the engineering design put to use following the conceptual design under the instructions of the Circular providing guidance on methods of determination of economic and technical indicators and construction quantity takeoff;

b) Detailed unit costs and total cost that are determined under the instructions given in Appendix IV hereto.

3. Equipment costs included in a construction cost estimate are determined under clause 3 of Article 12 in the Decree No. 10/2021/ND-CP, the detailed instructions given in Section 1 of Appendix II herein and several specific regulations as follows:

a) Equipment purchase costs are determined according to the volume, quantity, category and purchase price of the respective equipment. Volume, quantity or category of equipment is defined on the basis of the design put to use following the conceptual design and the approved list of equipment for use. Equipment purchase costs are calculated on a par with the market price on the basis of information about equipment prices available on the database of the competent regulatory authority; or the price proposals provided by suppliers or manufacturers; or based on prices of equipment with similar capacity, technologies and origins for use in completed construction projects that have been converted over time to adapt to the calculation period.

b) Costs of manufacturing of equipment are calculated on the basis of volume, quantity of equipment to be manufactured and unit manufacturing costs depending on the characteristics, attributes, property and categories of equipment; or information about manufacturing prices available in the price database of a competent regulatory authority; or based on price proposals of manufacturers or suppliers; or based on manufacturing prices of similar equipment of the completed construction project which are converted over time to adapt to the calculation period.

c) Administrative costs of equipment purchase (if any); costs of purchase of copyrights to software used for construction equipment and technological equipment (if any); costs of training and technology transfer (if any); transportation costs; insurance costs; taxes and fees and other relevant costs, are determined based on the cost estimate or based on regulations issued by competent regulatory authorities.

d) Equipment installation costs are estimated like construction costs under clause 2 of this Article.

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4. Project management costs included in a construction cost estimate are determined under clause 4 of Article 12 and 30 in the Decree No. 10/2021/ND-CP based on the norm in per cent (%) which is taken into account when calculating total investment in construction; or are estimated provided that they correspond to project management costs included in the approved total investment. Project management cost norms are stipulated under the Circular issuing construction cost norms.

5. Construction investment consultancy costs included in a construction cost estimate are determined under clause 5 of Article 12 in the Decree No. 10/2021/ND-CP and Article 13 herein. Construction investment costs included in a construction cost estimate are exclusive of consultancy costs of the entire project.

6. Other costs included in a construction cost estimate are determined under clause 6 of Article 12 in the Decree No. 10/2021/ND-CP and several specific regulations as follows:

a) Other costs included in the construction cost estimate are determined based on norms in percent (%) under the instructions of competent authorities; or based on cost estimates; or are values of bids concluded in accordance with laws; or are estimated as part of the construction cost estimate in line with the approved total investment in construction if there are no grounds for calculation.

b) If costs of construction of machinery sheds, foundations, power, compressed air or water supply systems in place on site; costs of installation and demolition of cement concrete or asphalt concrete mixer stations, gantry cranes, and other construction equipment similar in characteristics, are separate from costs of the entire project, they can be charged into other costs included in the construction cost estimate. These costs are determined by using the estimate to ensure relevance to design, construction method and particular conditions of the project.

c) Other costs included in the construction cost estimate do not include costs incurred from payment of loan interest during the construction period; expenses for demining of bombs, mines and other explosive objects; audit; review and approval of investment capital settlements; expenses for scientific and technological researches, application and use of new materials related to the project; initial working capital required for construction investment projects for commercial purposes; expenses for the process of off-load or on-load commissioning of technology or production lines according to the pre-transfer inspection processes; costs of assessment of the feasibility study report for investment in construction and the economic-technical investment report; resource-related taxes; fees, charges and a number of other relevant cost items generally charged for the entire project.

7. Contingency costs included in a construction cost estimate are determined under clause 7 of Article 12 in the Decree No. 10/2021/ND-CP, specifically as follows:

a) Contingency costs of quantity or jobs involved are calculated by the ratio in percent (%) of these costs to total of construction costs, equipment costs, project management costs, construction investment consultancy costs and other costs.

b) The contingency costs offset against inflation elements are determined on the basis of the proposed execution duration and schedule (expressed in quarters or years) and the construction price index appropriate for the type of construction project, taking into account the possibilities of variation in domestic and international prices.

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9. Construction cost estimate can be adjusted under the provisions of Article 15 in the Decree No. 10/2021/ND-CP and the method under the instructions given in Section 4 of Appendix II hereto.

Article 5. Cost elements of the bid cost estimate

1. The estimate of costs of a construction bid is composed of several or all of the following cost components: Construction costs, other associated costs and contingency costs of the bid package.

2. The estimate of costs of an equipment purchase contact is composed of several or all of the following cost components:

Costs of purchase of construction equipment and technological equipment; costs of manufacturing of equipment; costs of equipment purchase management; costs of purchase of copyrighted software for equipment; costs of training, technology transfer; transportation costs; other relevant costs and contingency costs of the bid.

3. The estimate of costs of an installation contact is composed of several or all of the following cost components: Costs of installation, testing or calibration; costs of trial operation of equipment subject to technical requirements; other relevant costs and contingency costs for the bid.

4. The estimate of costs of a construction investment consultancy bid is composed of several or all of the following cost components: Costs incurred from performing construction investment consulting work; other costs and contingency costs of the bid.

5. Estimate of costs of the mixed bid (including the estimate of the bid prescribed in clause 2 of Article 17 in the Decree No. 10/2021/ND-CP): Depending on the specific extent, attributes and conditions of the bid, the estimate of the mixed bid is composed of several or all of cost components of the bid specified in clause 1, 2, 3 and 4 of this Article.

Article 6. Estimation of costs of the bid prescribed in clause 2 and 3 of Article 17 in the Decree No. 10/2021/ND-CP

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a) Construction costs included in the estimate of costs of the construction bid are determined according to clause 2 of Article 4 herein.

b) Based on the specific conditions of each bid, the estimate of costs of the construction bid may be supplemented with one or a number of other relevant cost items for performing the jobs falling within the scope of the bid, such as: Expenses for movement of special-purpose machines and equipment to and out of the construction site; expenses for ensuring traffic safety for construction activities; expenses for restoration of technical infrastructure affected by construction activities; costs of material storage facilities; expenses for construction of sheds or canopies for machines, machine foundations, electricity, compressed air and water supply systems at construction sites, installation and dismantlement of cement or asphalt concrete mixing plants, gantry cranes, tower cranes, some other building machines and equipment having similar characteristics, and several cost items related to the bid.

c) Contingency costs included the estimate of costs of the construction bid comprise provisions for quantities or jobs and provisions against price slippage elements arising during the construction period.

2. Estimate of costs of the equipment procurement bid

a) Cost components included in the estimate of costs of the equipment procurement bid are determined according to point a, b and c of clause 3 of Article 4 herein.

b) Based on the specific conditions of each bid, the estimate of costs of the equipment procurement bid may be supplemented with one or a number of other relevant cost items for performing the jobs falling within the scope of the bid.

c) Contingency costs included in the estimate of costs of the equipment procurement bid comprise provisions for quantities or jobs and provisions against price slippage elements arising during the construction period.

3. c) Estimate of costs of equipment installation bid:

a) Costs of installation, testing, calibration and trial operation of equipment included in the estimate of costs of the equipment installation bid are determined according to point d and dd of clause 3 of Article 4 herein.

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c) Contingency costs included in the estimate of costs of the equipment installation bid comprise provisions for quantities or jobs and provisions against price slippage elements arising during the construction period.

4. Estimate of costs of construction investment consultancy bid:

a) Consultancy costs included in the estimate of costs of the construction investment consultancy bid are determined according to clause 5 of Article 4 herein.

b) Based on the specific conditions of each bid, the estimate of costs of the construction investment consultancy bid may be supplemented with one or a number of other relevant cost items for performing the jobs falling within the scope of the bid.

c) Contingency costs included in the estimate of costs of the construction investment consultancy bid comprise provisions for quantities or jobs and provisions against price slippage elements arising during the construction period.

5. Estimate of costs of the mixed bid and estimate of costs of the bid prescribed in clause 2 of Article 17 in the Decree No. 10/2021/ND-CP: Based on the specific substance and attributes or property of each bid, the estimate of costs of the bid is composed of several or all of cost items specified in clause 1, 2, 3 and 4 of this Article.

6. The estimates of costs of the bids prescribed in clause 1, 2, 3 and 4 in this Article are made according to the instructions given in Section 2 of Appendix II hereto.

Article 7. Estimation of costs of the bid prescribed in clause 4 of Article 17 in the Decree No. 10/2021/ND-CP

1. Based on the approved construction cost estimate, the investor can, at their discretion, produce the bid cost estimate, specifically including the followings:

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b) Determine cost components and items included in the bid cost estimate according to the scope of work or activities that need to be carried out in the bid on the basis of the approved construction cost estimate.

c) Update volumes, unit costs, prices of cost elements on a par with the price level at the local market where the construction project is executed, relevant regulatory policies in effect at the time of estimation of costs of the bid, technical directions, specific requirements of the bid with respect to cost components or items that have already been determined at point b of clause 1 of this Article.

2. Other relevant costs of the bid is determined under point b of clause 1, point b of clause 2, point b of clause 3 and point d of clause 4 of Article 6 herein according to specific conditions and characteristics of the bid and the approved construction cost estimate.

3. Contingency costs included in the bid cost estimate are determined like those included in the construction cost estimate prescribed in section 1 of Appendix II hereto and need to ensure that total contingency cost included in the bid cost estimate does not exceed contingency costs included in the approved construction cost estimate.

Article 8. Management and announcement of construction prices prescribed in clause 2 of Article 26 in the Decree No. 10/2021/ND-CP

1. Construction unit prices announced by provincial People’s Committees under clause 2 of Article 26 in the Decree No. 10/2021/ND-CP serve as a basis to determine and manage construction investment costs of construction projects within their remit. Construction unit prices announced by provincial People’s Committees are determined according to construction cost norms issued by competent regulatory authorities and prices of cost elements prescribed in clause 3, 4 and 5 of this Article provided that they are appropriate to the calculation period. Prices of cost elements including: Prices of building materials, unit prices of building labor, costs of building machine and equipment per shift.

2. Prices of building materials, unit prices of building labor, costs of building machine and equipment per shift are announced by the Department of Construction on a periodic basis under the provisions of clause 2 of Article 26 in the Decree No. 10/2021/ND-CP and regulations laid down in clause 3, 4 and 5 of this Article.

3. Management and announcement of prices of building materials:

a) Prices of building materials that are announced must be in line with market prices, quality standards, origins, capacity and scope of supply of building materials at the announcement date. The announced list of building materials is compiled on the basis of the list of building materials available in the set of norms issued by competent regulatory authorities and the list of building materials available on the market.

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c) Where necessary, the Department of Construction can announce prices of building materials subject to changes on a monthly basis to meet requirements of management of construction investment costs. The deadline for quarterly and monthly announcement of prices of building materials must be earlier than the 15^th day of the first month of the following quarter, and the 10^th day of the following month, respectively.

4. Management and announcement of unit labor costs:

a) Unit labor costs put to use locally must be on a par with labor prices on the local market, appropriate to the characteristics, attributes and property of the work performed by construction workers; must be inclusive of wages, salaries and fringe benefits depending on the characteristics of construction work and several costs payable by employees in accordance with regulations in force. Costs payable by employees in accordance with regulations in force shall include: social insurance, health insurance, unemployment insurance contributions and union dues as well as several other payables.

b) Per-day unit costs of labor are determined according to the statutory working time-length (8 hours/day and 26 days/month) of direct construction workers and vary depending on workmanship levels stated in the worker's qualification rating available in the set of norms issued by competent state authorities.

c) The list of groups and levels of construction worker's qualification and methods for determination of unit labor costs are specified in the Circular providing instructions about economic and technical indicators and construction quantity takeoff.

d) Departments of Construction shall take charge of and cooperate with related entities in: conducting or hiring qualified consultants to conduct surveys, information collection, consulting unit labor price brackets announced by the Ministry of Construction to determine unit costs of construction labor for use in their localities; making price announcements by using the sample No. 2 of Appendix VIII of this Circular; sending these announcements to the Ministry of Construction for monitoring and management purposes, enclosing electronic data files (Microsoft Excel-formatted files) to be entered into the database as prescribed in clause 3 of Article 29 in the Decree No. 10/ 2021/ND-CP.

dd) The deadline for annual announcement of unit labor prices should be prior to January 15^th of the following year.

5. Management and announcement of per-shift costs of machines and equipment:

a) Per-shift costs of construction machines and equipment that are announced must be appropriate to categories, output, main technical specifications, characteristics and attributes of each machine or equipment. The announced list of construction machines and equipment is compiled on the basis of the list of construction machines and equipment available in the set of norms issued by competent regulatory authorities, and the list of construction machines and equipment available on the market.

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c) Per-shift costs of machines and equipment are composed of all or several of cost items such as depreciation costs, repair costs, fuel costs, energy costs, machine operating labor costs and other costs of machines. Per-shift costs of machines and equipment are exclusive of those costs specified in point b of clause 6 of Article 4 herein.

d) Consumption norms, basic data used for determining per-shift costs and methods for determination of per-shift costs of machines and equipment shall be subject to instructions given in the Circular providing instructions about economic and technical indicators and construction quantity takeoff.

dd) Departments of Construction shall take charge of and cooperate with related entities in: conducting or hiring qualified consultants to conduct surveys, information collection, consulting historical costs of machines per shift announced by the Ministry of Construction to determine per-shift costs of machines and equipment for use in their localities; making price announcements by using the sample No. 3 of Appendix VIII hereto; sending these announcements to the Ministry of Construction for monitoring and management purposes, enclosing electronic data files (Microsoft Excel-formatted files) to be entered into the database as prescribed in clause 3 of Article 29 in the Decree No. 10/2021/ND-CP.

e) The deadline for annual announcement of per-shift costs of machines and equipment should be earlier than January 15^th of the following year.

6. Manufacturers and suppliers of building materials, labor; businesses supplying and leasing machines and equipment within localities; investors, successful bidders of construction projects, shall be responsible for providing information about prices of cost elements for Departments of Construction for their announcement thereof as per clause 2 of this Article.

Article 9. Determination of construction costs

1. Construction costs include detailed unit costs and total construction costs. Construction costs are determined under clause 2 and 3 of Article 24 in the Decree No. 10/2021/ND-CP and the detailed instructions given in Appendix IV hereto.

2. Investors may use construction costs prescribed in clause 1 and 2 of Article 26 in the Decree No. 10/2021/ND-CP, and clause 1 and 2 of Article 8 herein, as a basis to determine and manage construction investment costs. In case where construction costs are determined based on detailed unit costs or total construction costs on the basis of construction norms, costs of building materials, labor unit costs, per-shift costs of machines and equipment may be determined under clause 3, 4 and 5 in this Article.

3. Costs of building materials:

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b) With respect to building materials of which costs have not yet been announced or are already available but proved to be inappropriate, costs of these building materials used for determining construction costs shall be determined under the instructions given in 1.2.1 of Appendix IV hereto.

c) When preparing a feasibility study report, engineering design and determining construction investment costs for a construction work or project, building materials meeting less mineral consumption, energy saving and eco-friendly requirements are preferred on condition that investment effectiveness and conformance to the project’s requirements are ensured.

d) If any project needs particular types of building materials, those not common on the market or imported ones, explanatory notes to the pre-feasibility study report, the feasibility study report, the economic-technical report and the construction design should be given in detail.

4. Unit labour costs

a) Unit costs of building labor announced by competent regulatory authorities under clause 4 of Article 8 herein serve as a basis for determining construction costs.

b) If any unit cost of building labor announced by competent regulatory authorities is inappropriate to particularities of the construction job, work or project, the investor must conduct a survey to determine the unit cost of building labor according to the method prescribed in the Circular, providing instructions about methods for determination of economic-technical indicators and construction quantity takeoff before making their decision to apply such unit cost when determining construction costs. While determining unit costs of building labor, the Department of Construction shall follow instructions about accuracy and relevance of bases and methods for determining unit costs of building labor upon the investor's request.

c) The investor shall send dossiers on results of determination of unit costs of building labor under point b of this clause to the Department of Construction for its monitoring and management; these dossiers should describe bases, methods and results of determination of unit costs of building labor, forms (if any) according to the stipulated method; on an annual basis, upon receipt of these dossiers, the Department of Construction shall compile a report for submission to the Ministry of Construction.

5. Per-shift costs of building machines and equipment:

a) Per-shift costs of building machines and equipment announced by competent regulatory authorities under clause 5 of Article 8 herein serve as a basis for determining construction costs.

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c) The investor shall send dossiers on results of determination of per-shift costs of building machines and equipment under point b of this clause to the Department of Construction for its monitoring and management; these dossiers should describe bases, methods and results of determination of per-shift costs of building machines and equipment, forms (if any) according to the stipulated method; on an annual basis, upon receipt of these dossiers, the Department of Construction shall compile a report for submission to the Ministry of Construction.

6. With respect to any construction project located in at least 02 administrative units, the investor shall take charge of determining construction costs under the provisions of clause 3 of Article 26 in the Decree No. 10/2021/ND-CP to facilitate determination of costs, ensure anti-wastefulness and effectiveness for the project as well as adaptation to the capability of supplying resources according to the project implementation plan.

Article 10. Construction price indices

1. Construction price indices announced by competent regulatory authorities under clause 3 of Article 27 in the Decree No. 10/2021/ND-CP must meet the requirements concerning timeliness, objectivity, conformance to price fluctuation trends in the market within the given period, exclusive of costs of compensation, support and resettlement, loan interest incurred during the construction time, initial working capital for manufacturing and business activities. A construction price index is expressed in percent (%).

2. It is necessary to consult managerial requirements and regulations on management of projects, management of construction investment costs and characteristics of local construction projects to list out construction projects needed for the process of determination and announcement of construction price indices. The number of representative construction projects used for calculating construction price indices applied to all construction projects on the predetermined list is not fewer than 03 construction projects.

3. The cost structure used for calculation of construction price indices is generated from statistical data, and corresponds to the cost structure prescribed in regulations on management of construction investment expenses, and is used in a stable manner until there is any change in a base period of time prescribed in point a of clause 5 of this Article.

4. Selecting input cost factors for determination of construction price indices:

a) Representative input cost factors used for determining construction price indices are costs related to main categories of building materials, labor or machinery for construction projects or types of construction projects; and are selected according to the principle that total proportion of costs for main categories of building materials, labor or machinery must account for more than 80% of the respective total cost of building materials, labor or machinery in a construction project. The list of building materials used for determining construction price indices must be identical in terms of their types, specifications, markings or labels. The list of construction workers used for determining construction price indices must be identical in terms of their classifications and levels. The list of construction machines and equipment used for determining construction price indices must be identical in terms of their types and capacity.

b) Prices of building materials, unit costs of building labor, per-shift costs of building machine and equipment are determined under clause 2 of Article 8 and other regulations laid down in point b of clause 3, point b of clause 4, point b of clause 5 of Article 9 herein.

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a) The base period is the year 2020 and the comparison period is the period of announcement of construction price index compared to that in the base period. The Ministry of Construction regulates the time of change in the base period so that local authorities make appropriate adjustments.

b) As for construction price indices announced on a quarterly basis, the announcement time is prior to the 15^th day of the first month of the following quarter. As for construction price indices announced on an annual basis, the announcement time is prior to the 15^th day of the first month of the following year.

c) Where it is necessary to announce construction price indices on a monthly basis, competent state authorities shall consider issuing decisions to meet requirements concerning management of construction investment costs and adjustment of construction contract prices in effect locally. The time of announcement of construction price indices on a monthly basis is prior to the 10^th day of the following month.

6. Based on the list of construction projects, methods for determining construction price indices under the Circular providing instructions about economic and technical indicators and construction quantity takeoff, and regulations laid down in clause 1, 2, 3, 4 and 5 of this Article, Departments of Construction shall take charge of determining construction price indices before announcing them under point b of clause 3 of Article 27 in the Decree No. 10/2021/ND-CP.

7. Determining construction price indices for adjusting contract prices under clause 4 of Article 27 in the Decree No. 10/2021/ND-CP as follows:

a) The type of construction price index chosen for any adjustment in the construction contract price must resemble the type of construction price index prescribed in clause 2 of Article 27 in the Decree No. 10/2020/ND-CP and must be agreed upon in the contract.

b) The cost structure used for determining the construction price index must be conformable to regulations of the Circular on adjustment of construction contract prices and the Circular providing instructions about economic and technical indicators and construction quantity takeoff.

c) Selecting input cost factors for determination of construction price indices shall be subject to regulations laid down in clause 4 of this Article.

d) The base period and comparison period used for determining construction price indices must be based on agreements entered into in the contract, the schedule of execution of the contract provided that they conform to laws on construction contracts.

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Article 11. Unit cost rate of investment in construction

1. Unit cost rates of investment in construction announced by the Ministry of Construction under clause 1 of Article 26 in the Decree No. 10/2021/ND-CP serve as a basis for determination of preliminarily estimated total investment and total investment in construction projects, calculation and management of construction investment costs at the project preparatory stage. The deadline for announcement of unit cost rate of investment in construction should be prior to January 31^st of the following year.

2. Unit cost rates of investment in construction prescribed in clause 2 of Article 25 in the Decree No. 10/2021/ND-CP are announced annually and exclusive of costs of several jobs particularly required in a construction project, including:

a) Compensation, support and resettlement cost;

b) Loan interest incurred during the period of investment in the construction project using loans;

c) Initial working capital (with respect to investment and construction projects developed for manufacturing and business purposes);

d) Contingencies or provisions for work volumes and quantities and price slippage elements that may occur during the project execution period;

dd) Several particular costs specific to projects, such as environmental impact assessment of and response to impacts of projects on the environment; register of international quality inspection and monitoring of project deformation; costs of project quality inspection; special reinforcement of project foundations; expenses for hiring foreign consultants; other particular expenses.

3. Unit cost rates of investment in construction are determined based on data collected or calculated in actual situations; or based on data obtained from the existing database; or based on both of the aforesaid. The method for determining unit cost rate of investment in construction shall be subject to the Circular providing instructions about economic and technical indicators and construction quantity takeoff.

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1. Conversion of construction investment capital is conversion of investment cost items, including: Costs of compensation, support and resettlement costs (if any); construction costs; equipment costs; project management costs; construction investment consultancy and other costs, all of which have already been settled according to price levels determined at the time of transfer for operation. The purpose of converting construction investment capital is to ensure all recognized investment costs of a construction project must be fully reflected at the conversion time. The report on conversion of construction investment capital should be prepared together with settlement dossiers for submission to investment decision makers to seek their approval decisions.

2. Conversion of construction investment capital shall be required for construction projects and works of which the period of execution is more than 02 years from the date of commencement to the date of pre-acceptance testing date.

3. Methods for conversion of construction investment capital and sample reports on conversion results shall be subject to the instructions given in Appendix VII hereto.

Article 13. Construction investment consultancy costs

1. Construction investment consultancy costs are determined subject to Article 31 in the Decree No. 10/2021/ND-CP, and several specific regulations as follows:

a) Construction investment consultancy costs are calculated by percent ratios (%) stipulated in the Circular issuing construction cost norms.

b) Costs of consultancy work not yet controlled by norms or controlled by norms that are, however, inappropriate are determined according the cost estimate appropriate to jobs to be done according to the instructions given in Section II of Appendix VI hereto.

c) Before determination of total investment or estimated construction costs of several consultancy works, construction investment consultancy costs are determined according to the approved values; or consultancy contracts concluded in accordance with laws.

d) Testing costs are estimated like construction costs as provided in clause 2 of Article 4 herein.

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2. Costs of hiring of foreign consultant for several types of consultancy work are determined according to Article 32 in the Decree No. 10/2021/ND-CP, other relevant laws and international practices. The method for cost estimating for hiring of foreign consultants shall be subject to the instructions given in Section III of Appendix IV hereto.

Article 14. Entry into force

1. This Circular is entering into force as of October 15, 2021.

2. This Circular shall replace the Circular No. 09/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about determination and management of construction investment costs; the Circular No. 11/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about the calculation of per-shift costs of construction machinery and equipment; the Circular No. 14/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about the calculation and management of construction price indices; the Circular No. 15/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about the calculation of unit labor costs in construction; the Circular No. 16/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about determination of project management and construction investment consultancy costs; the Circular No. 18/2019/TT-BXD dated December 26, 2019 of the Minister of Construction, providing instructions about conversion of construction investment capital; the Circular No. 02/2020/TT-BXD dated July 20, 2020 of the Minister of Construction, amending and supplementing several Articles of 04 Circulars related to management of construction investment costs./.

PP. MINISTER
DEPUTY MINISTER




Bui Hong Minh