Circular No. 03/2001/TT-BXD guiding the adjustment of construction project budgets

CIRCULAR

OF THE MINISTRY OF CONSTRUCTION NO. 03/2001/TT-BXD
DATE February 13, 2001 GUIDELINES FOR ADJUSTING
ESTIMATES OF BASIC CONSTRUCTION PROJECTS

Implementing Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government on adjusting the minimum wage level, allowances, and living expenses for those entitled to wages, allowances, and subsidies; based on the adjusted electricity prices and fuel prices decided by the competent authority.

To implement adjustments to the estimates of basic construction projects due to the aforementioned changes affecting construction projects funded by state budget, state-guaranteed credit, state investment development credit, and state-owned enterprise investment development funds as stipulated in Articles 10, 11, and 12 of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government and Clause 4, 6 of Article 1 of Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government amending and supplementing certain provisions of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP; the Ministry of Construction provides guidelines for adjusting the estimates of basic construction projects as follows:

I - ADJUSTMENT OF THE ESTIMATED VALUE OF INSTALLATION AND CONSTRUCTION:

1. Adjustment of labor costs:

Labor costs in the installation and construction estimate of construction projects established according to the current basic construction unit prices of provinces and centrally administered cities shall be multiplied by the factor KNC = 1.46.

For construction projects that establish estimates according to the current basic construction unit prices of provinces and centrally administered cities and which additionally enjoy wage supplements, salary allowances, and other policies not included in the unit price or receive higher than 20% mobility allowances or more than 10% unstable production allowances, these additional amounts shall be added to labor costs following the guidance provided in Appendix Enterprises importing tobacco raw materials and cigarette paper for producing tobacco products for export or processing tobacco products for export shall submit registration applications according to Form

2. Adjustment of construction machinery costs:

Construction machinery costs in the installation and construction estimate of construction projects established according to the current basic construction unit prices of provinces and centrally administered cities shall be multiplied by the factor KMTC = 1.07. This adjustment factor does not apply to the adjustment of construction machinery costs in the installation and construction estimate of construction projects where the construction machinery costs in the installation and construction estimate are determined based on machine shift prices issued separately by the competent authority and not included in the machine shift price list issued together with Decision No. 1260/1998/QĐ-BXD dated November 18, 1998 of the Minister of Construction. 3. Common costs and pre-tax income:

- Common costs: Calculated as a percentage (%) of the adjusted labor costs in the installation and construction estimate. The amount of common costs is specified for each type of project in Table 2 of Appendix 2 of Circular No. 09/2000/TT-BXD dated July 17, 2000 of the Ministry of Construction.

- Pre-tax income: Calculated as a percentage (%) specified for each type of project in Table 2 of Appendix 2 of Circular No. 09/2000/TT-BXD dated July 17, 2000 of the Ministry of Construction relative to the adjusted direct costs (labor costs and construction machinery costs) and

the aforementioned common costs. 4. Value-added tax: Calculated at the current VAT rate applicable to construction and installation work on the pre-tax value of the installation and construction estimate after adjusting the cost items as

mentioned above. The contents of the cost items in the installation and construction estimate value of construction project sections as attached in this Circular. II - ADJUSTMENT OF OTHER COSTS IN

THE TOTAL ESTIMATE OF CONSTRUCTION PROJECTS

1. Adjustment of
construction survey estimate:

The construction survey cost estimate established according to the construction survey unit prices decided by the Chairman of the People's Committee of provinces and centrally administered cities based on the construction survey estimate norms issued together with Decision No. 06/2000/QĐ-BXD dated May 22, 2000 of the Minister of Construction, Circular No. 07/2000/TT-BXD dated July 12, 2000 of the Ministry of Construction guiding the establishment of construction survey unit prices and management of construction survey costs and the minimum wage of VND 180,000/month stipulated in Decree No. 10/2000/NĐ-CP dated March 27, 2000 of the Government, the Construction Department bases on the new minimum wage of VND 210,000/month (stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government and Joint Circular No. 32/2000/TTLT/BLĐTBXH-BTC dated December 29, 2000 of the Joint Circular of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance guiding the implementation of adjustments to the minimum wage and allowances in enterprises) to determine the adjustment of the construction survey cost estimate to submit to the People's Committee of the province or city for issuance and application. For provinces and cities that have not yet completed the construction survey unit prices according to the construction survey estimate norms issued together with Decision No. 06/2000/QĐ-BXD dated May 22, 2000 of the Minister of Construction and the new regulations of the State, the Construction Department of the province or city takes the lead in coordinating with relevant departments to promptly complete the establishment of construction survey unit prices in accordance with the spirit of Circular No. 07/2000/TT-BXD dated July 12, 2000 of the Ministry of Construction for application.

2. Adjustment of investment consulting and construction costs; design costs of construction projects; project management board costs: 2.1 Investment consulting and construction costs calculated as a percentage (%) (stipulated in Decision No. 14/2000/QĐ-BXD

dated July 20, 2000 of the Minister of Construction) on the pre-tax value of the installation and construction estimate or the pre-tax value of the installation and construction estimate and equipment before adjustment according to the guidance in Part I of this Circular.

Specifically, the cost of consulting for preparing tender documents for purchasing materials and equipment and analyzing and evaluating tender documents for purchasing materials and equipment, calculated as a percentage (%) on the value of materials and equipment

without VAT according to the provisions in Decision No. 14/2000/QĐ-BXD dated July 20, 2000 of the Minister of Construction shall be multiplied by the factor KTVT 2.2 Design costs of construction projects calculated as a percentage (%) (stipulated in Decision No. 01/2000/QĐ-BXD dated January 3, 2000 of the Minister of Construction) on the pre-tax value of the installation and construction estimate already adjusted according to the guidance in Part I of this Circular.

Specifically the cost of consulting for preparing tender documents for purchasing materials and equipment and analyzing and evaluating tender documents for purchasing materials and equipment, calculated as a percentage (%) of the value of materials and equipment excluding value-added tax as stipulated in Decision No. 14/2000/QĐ-BXD dated July 20, 2000 of the Minister of Construction, multiplied by the coefficient KTVT = 1,11.

2.2 The design cost of construction projects is calculated as a percentage (%) (as prescribed in Decision No. 01/2000/QĐ-BXD dated January 3, 2000 of the Minister of Construction) based on the pre-tax construction and installation budget estimate before adjustment according to the guidance in Part I of this Circular.

2.3 The Project Management Board's costs shall be calculated as a percentage rate (%) as prescribed in Circular No. 09/2000/TT-BXD dated July 17, 2000 of the Ministry of Construction on the construction and equipment value that has been adjusted according to the guidance provided in Part I. and the value of equipment adjusted according to the guidance in Part I this Circular.

2.4 For the budget estimate of planning work costs for urban construction: The pre-tax cost estimate for this work is determined based on the urban construction planning price list issued with Decision No. 502/BXD-VKT dated September 18, 1996 of the Minister of Construction, multiplied by the factor KQH = 1.13.

III - IMPLEMENTATION:

This Circular replaces Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction guiding the adjustment of construction project estimates and will be uniformly applied nationwide from January 1, 2001. This Circular shall not be applied to adjust the construction project estimates of investment projects that do not use the aforementioned sources of funds.

- For new investment projects in 2001, the above adjustment factor must be calculated immediately when determining the total investment amount of the project.

- For construction works, construction work items that have been approved with investment decisions approving general estimates, estimates but have not yet or are currently organizing bidding or direct contracting, the Investor shall adjust the general estimates, estimates according to the guidance of this Circular to submit for approval by the investment decision-making authority. adjust the total budget estimate, budget estimate according to the guidance of this Circular to submit to the investment decision-making authority for re-approval.

- For construction works applying direct contracting, bidding under contracts with adjustable implementation prices as stipulated in Clause a, b Point 2 Article 7 of the Tendering Regulation issued together with Decree No. 88/1999/NĐ-CP dated September 1, 1999 of the Government, with quantities carried over from the previous year to 2001, the Investor shall determine the value of the construction quantity completed up to December 31, 2000 and the remaining construction quantity to be implemented from January 1, 2001 to apply the adjustment of the basic construction project estimate as prescribed in this Circular. In 2001, the Investor shall determine the value of the completed construction work up to December 31, 2000 and the remaining construction work to be carried out from January 1, 2001 to apply the adjustment of the basic construction project budget estimate as prescribed in this Circular.

- The value of the estimate shall not be adjusted according to the provisions of this Circular for construction works implemented from the beginning of 2001 which have been approved with investment decisions approving tender results through the "Turnkey Contract" method.

- For important State construction works permitted to establish separate unit prices (basic construction work unit prices), the unit price board shall base on the system and policies allowed to be applied at the works and the principles of adjusting the basic construction project estimate as guided by this Circular, to determine the adjustment level of labor costs, machinery operation costs, and other expenses (if any) in the construction estimate. If there are any issues encountered, it is recommended that Ministries, Sectors, localities report to the Ministry of Construction for consideration and resolution. COMBINED ESTIMATE TABLE FOR CONSTRUCTION

During the implementation process WORK ITEM

ANNEX

CONSTRUCTION
(Accompanying Circular No. 03/2001/TT-BXD of the Ministry of Construction in February 2001) ) x KNC

x KMTC number (T + C) x prescribed ratio
- Recombinant Hepatitis : Quantity of construction work item j; : Material, labor, machinery costs in the construction work item j unit price;

Where:

Article 24^{9. Travel distance is the distance traveled without using mechanical means (cars, motorcycles, motorboats) to reach locations for implementing technical forest management measures and patrolling to protect forests.} - Group I

D^jvl, D^jnc, D^jm- Group II of - Group III

F₁ - Group IV

: Factor representing the relationship between labor costs in the unit price compared to the grade wage of group n wages:

h_1n: General cost rate (%);

: Pre-tax income; : h_1.1 = 2,342

: Pre-tax construction estimate value; : h_1.2 = 2,493

: Post-tax construction estimate value; : h_1.3 = 2,638

: Material difference (if any); : h_1.4 = 2,796

h_2nKNC, KMTC: Labor cost adjustment factor, machinery operation cost adjustment factor;

: Pre-tax income; : h_2.1 = 1,378

: Pre-tax construction estimate value; : h_2.2 = 1,370

: Post-tax construction estimate value; : h_2.3 = 1,363

: Material difference (if any); : h_2.4 = 1,357

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below: : Value-added tax rate specified for construction, installation work;

TL VAT: Total output value-added tax (including input value-added tax paid when purchasing various materials, fuels, energy... and the portion of value-added tax that the construction enterprise must pay).

g_XL : Pre-tax construction and installation budget estimate value;

G_xl : Post-tax construction and installation budget estimate value;

CL_vl : Material price difference (if any);

KNC, KMTC: Labor cost adjustment factor, machinery cost adjustment factor;

d.1. Amount of taxable income in Vietnam:^XL_VAT: Value-added tax rate applicable to construction and installation work;

VAT: Total output value-added tax (including input value-added tax paid when purchasing various types of materials, fuels, energy... and the portion of value-added tax that the construction enterprise must pay).

added tax output tax (including input value-added tax paid when purchasing various types of materials, fuels, energy... and the portion of value-added tax that the construction enterprise must pay). để trả khi mua các loại vật tư, vật liệu, nhiên liệu, năng lượng... và phần thuế giá trị gia tăng added tax that the construction enterprise must pay).