Circular No. 04/2002/TT-BXD guiding the adjustment of construction project budgets for basic construction projects

CIRCULAR

OF THE MINISTRY OF CONSTRUCTION NO. 04/2002/TT-BXD DATE JUNE 27, 2002 ON GUIDELINES FOR ADJUSTING THE ESTIMATED COST OF CONSTRUCTION PROJECTS
BASIC CONSTRUCTION

Implementing Decree No. 28/CP dated March 28, 1997 and Article 2 of Decree No. 03/2001/NĐ-CP dated January 11, 2001 of the Government on amending and supplementing certain articles of Decree No. 28/CP regarding the reform of wage and income management in state-owned construction enterprises. Based on the provisions set out in Sections II, III, and V of Circular No. 03/2002/TT-BLDTBXH dated January 9, 2002 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of Decree No. 28/CP dated March 28, 1997 and Decree No. 03/2001/NĐ-CP dated January 11, 2001 of the Government on the reform of wage and income management in state-owned construction enterprises.

To implement adjustments to the estimated cost of basic construction projects due to the above-mentioned changes for construction projects using state budget funds, state-guaranteed credit, state investment development capital, and state-owned enterprise investment development capital 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 Clauses 4 and 6 of Article 1 of Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government on amending and supplementing certain articles of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP; the Ministry of Construction guides the adjustment of the estimated costs of basic construction projects as follows:

I- ADJUSTMENT OF THE ESTIMATED INSTALLATION VALUE:

1. Adjustment of labor costs:

- The labor cost in the installation estimate of construction projects established according to the current basic construction unit price of provinces and centrally-administered cities calculated based on the minimum wage of 144,000.0 VND/month shall be multiplied by the adjustment factor K_NC for area 1 at 1.75, for area 2 at 1.89, for area 3 at 2.04.

- The labor cost in the installation estimate of construction projects established according to the current basic construction unit price of provinces and centrally-administered cities calculated based on the minimum wage of 210,000.0 VND/month shall be multiplied by the adjustment factor K_NC for area 1 at 1.20, for area 2 at 1.30, for area 3 at 1.40.

- For construction projects establishing estimates according to the current basic construction unit prices of provinces and centrally-administered cities that also enjoy additional allowances, salary supplements, and other policies not included in the unit price or receive higher mobility allowances of 20% or higher unstable production allowances of 10% more than the standard, these amounts shall be added to the labor costs according to current regulations.

2. Adjustment of machinery costs:

- The machinery cost in the installation estimate of construction projects established according to the current basic construction unit prices of provinces and centrally-administered cities; within which, the wages of machine operators and maintenance workers calculated based on the minimum wage of 144,000.0 VND/month shall be multiplied by the adjustment factor K_MTC for area 1 at 1.11, for area 2 at 1.12, for area 3 at 1.13.

- The machinery cost in the installation estimate of construction projects established according to the current basic construction unit prices of provinces and centrally-administered cities; within which, the wages of machine operators and maintenance workers calculated based on the minimum wage of 210,000.0 VND/month shall be multiplied by the adjustment factor K_MTC for area 1 at 1.04, for area 2 at 1.05, for area 3 at 1.06.

These adjustment factors do not apply to the adjustment of machinery costs in the installation estimate of construction projects where the machinery costs in the installation estimate are determined based on machine rates approved separately by competent authorities and not included in the machine rate table issued together with Decision No. 1260/1998/QĐ-BXD dated November 18, 1998 and Decision No. 10/2001/QĐ-BXD dated June 11, 2001 of the Minister of Construction.

3. Cost items calculated as percentages in the installation value estimate of construction projects (general expenses, pre-tax income, output VAT): Shall be calculated according to the current regulations of the State.

The contents of cost items in the estimated value of construction installation project budgets are as stipulated in current regulations.

II- ADJUSTMENT OF OTHER COSTS IN THE TOTAL ESTIMATE OF CONSTRUCTION PROJECTS:

1. Adjustment of Construction Survey Cost Estimate:

The survey cost estimate established according to the construction survey unit price decided by the Chairman of the People's Committee of provinces and centrally-administered cities based on the construction survey estimate standard 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 survey unit prices and the management of survey costs and the minimum wage of 210,000.0 VND/month, then the survey cost estimate shall be multiplied by the adjustment factor K_KS for area 1 at 1.09, for area 2 at 1.13, for area 3 at 1.18.

2. Some other cost items calculated as percentages in the total project estimate: They are calculated according to current national regulations.

III- IMPLEMENTATION:

The adjustment of the estimated cost of basic construction projects according to the guidelines of this Circular shall be uniformly applied nationwide from January 1, 2002. Construction projects of investment construction projects using other sources of capital than those mentioned above may refer to the content of this Circular to adjust the project estimate.

- For construction projects of investment construction projects currently organizing the preparation of design - total estimate documents, the installation value of project components and other cost items in the total estimate of the project shall be determined according to the contents of this Circular.

- For projects, project components that have been approved by the investment decision-making authority with the total estimate, estimate but have not yet or are currently organizing bidding or direct contracting, the investor shall adjust the total estimate, estimate according to the guidelines of this Circular to submit for re-approval by the investment decision-making authority.

- The project estimate price shall not be adjusted according to the provisions of this Circular for construction projects that have already bid or directly contracted to organize construction implementation from the date this Circular takes effect.

- For construction works and components of construction works that implement investment under a contract with price adjustment or direct award, which commenced construction in 2001 and had remaining quantities carried over to 2002, the adjustment of the budget estimate for the remaining construction quantities implemented from January 1, 2002, shall still be carried out in accordance with the guidance provided in Circular No. 03/2001/TT-BXD dated February 13, 2002, of the Ministry of Construction.

Based on the provisions of this Circular, the Construction Departments under the provinces and centrally governed cities shall report to the People's Committees of the provinces and centrally governed cities to provide specific guidance for their respective areas as stipulated in Circular No. 03/2002/TT-BLDTBXH for application in their localities. In the course of implementation, if there are any difficulties, it is requested that the Ministries, sectors, and localities reflect these issues to the Ministry of Construction for consideration and resolution.