Circular No. 12/2024/TT-BXD guiding the methods for determining and managing costs of public services related to urban lighting and urban greenery.

CIRCULAR

Guidelines on the method for determining and managing costs of public service activities

urban lighting, urban greenery

Pursuant to Decree No. 52/2022/NĐ-CP dated August 8, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

In accordance with the proposal of the Director of the Construction Economy Department and the Director of the Construction Economic Institute;

The Minister of Construction issues this Circular guiding the method for determining and managing costs of public service activities related to urban lighting and urban greenery.

Article 1. Scope of Regulation

This Circular guides the method for determining and managing costs of public service activities related to urban lighting and urban greenery using state budget funds from regular operating expenses (hereinafter referred to as public service activities).

Article 2. Applicability

This Circular applies to agencies, organizations, and individuals involved in the determination and management of costs of the aforementioned public service activities under Article 1.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Urban lighting service is a public service activity to carry out work ensuring that the urban lighting system maintains a stable operational status.

2. Urban greenery service is a public service activity to carry out work ensuring that the urban greenery system is maintained, cared for, and developed.

Article 4. Principles for Determining and Managing Costs of Public Service Activities

1. Costs of public service activities must be calculated accurately and sufficiently in accordance with technical procedures, economic and technical norms, cost norms (if applicable), quality criteria and standards established by competent authorities, and actual conditions of the locality.

2. The budget estimate for costs of public service activities determined according to the guidelines set forth in Article 5 of this Circular serves as the basis for tendering and ordering the provision of public service activities.

3. Management of costs of public service activities must comply with regulations on tendering, ordering the supply of products and services, and relevant laws.

Article 5. Budget Estimate for Costs of Public Service Activities and Method of Determination

1. The budget estimate for costs of public service activities includes the following items:

a) Direct costs;

b) General management costs;

c) Pre-tax income;

d) Value-added tax (if applicable).

2. The compilation of the budget estimate for costs of public service activities shall be carried out according to the guidelines provided in Appendix No. 1 attached to this Circular.

3. The method for determining components of costs in the budget estimate for costs of public service activities is guided by Appendix No. 2 attached to this Circular and certain specific provisions as follows:

a) Direct costs (DC) include: material costs, labor costs, and costs for the use of vehicles, machinery, and construction equipment.

b) General management costs (GM) include common costs for the management and operation of the enterprise's administrative apparatus; indirect costs serving management work; costs for workers' services (including labor protection costs and labor tools costs; excluding meal costs already included in direct labor costs); interest payments on bank loans and other financial institutions; social costs that employers must pay to the state (social insurance, health insurance, trade union fees, unemployment insurance); various fees and charges; rental costs for assets and factory premises (if applicable); depreciation and repair costs for fixed assets serving the management and operation of the enterprise, audit fees of the enterprise, and other related costs associated with the enterprise's general operations when providing public service activities.

General management costs in the budget estimate for costs of public service activities are determined by applying a percentage rate norm multiplied by direct labor costs or vehicle-machine and construction equipment usage costs. The percentage rate norm for general management costs, as prescribed by the People's Committee of the province, must be consistent with the actual conditions of providing public services in the locality (refer to the percentage rate at Clause 2, Section I, Appendix No. 2 attached to this Circular).

c) Pre-tax income (PI) is calculated based on direct costs and general management costs in the budget estimate for implementing public service activities (refer to the percentage rate at Clause 3, Section I, Appendix No. 2 attached to this Circular).

d) Value-added tax (VAT) (if applicable): Follows the regulations of the Ministry of Finance. For public service activities not subject to VAT, input VAT should be added.

Article 6. Economic and Technical Standards for Public Services

1. Economic and technical standards serve as the basis for determining unit prices and cost estimates for public services. These standards are determined according to the method specified in Appendix 3 attached to this Circular.

2. The economic and technical standards issued by the Ministry of Construction and other competent authorities shall be the basis for provincial People's Committees to apply, refer to during the process of organizing the determination, issuance, amendment, and supplementation of the economic and technical standards mentioned in Clause 3 of this Article, in accordance with the actual conditions of the locality.

3. Based on the method for determining economic and technical standards set out in Appendix 3 attached to this Circular, provincial People's Committees organize the determination, issuance, amendment, and supplementation of economic and technical standards applicable to public services within their jurisdiction, in compliance with laws on bidding, ordering the provision of products and public services.

4. The results of issuing economic and technical standards shall be sent to the Ministry of Construction for monitoring, and simultaneously updated into the database of standards and construction costs for state management purposes at both the national and local levels.

Article 7. Management of Costs Related to Public Services

1. The division and delegation of management responsibilities for costs related to urban lighting, urban greenery, and other costs mentioned in Clauses 2 and 3 of this Article shall be stipulated by the provincial People's Committee in accordance with the organizational model, management conditions, and special circumstances of the locality, as well as relevant legal provisions.

2. Organizations and units entrusted with the task of establishing economic and technical standards, unit prices, and cost estimates for public services may hire capable and experienced organizations or individuals to advise on the establishment and review of economic and technical standards; setting unit prices and cost estimates for public services to support cost management. The cost of hiring organizations or individuals for consultation shall be determined based on a budget estimate that is appropriate to the content and requirements of the work to be performed.

3. Other costs related to the management of public services (such as contingency costs, management costs, supervision costs, and other costs) shall only be implemented when they are guaranteed by the budget and comply with relevant legal provisions. The preparation of cost estimates for supervision and management of public services shall follow the guidelines provided in Appendix 4 attached to this Circular.

Article 8. Transitional Provisions

1. Public services whose cost budgets have been approved before the effective date of this Circular shall be subject to the application of its provisions on the principle of complying with laws on bidding, ordering the provision of products and public services, and contract laws, ensuring efficiency in management and implementation.

2. Economic and technical standards for public services issued by provincial People's Committees before the effective date of this Circular shall continue to be applied. The review, amendment, supplementation, or organization of the determination of standards shall be carried out in accordance with the provisions of this Circular.

Article 9. Effective Date

1. This Circular takes effect from February 15, 2025.

2. Repeal Circular No. 14/2017/TT-BXD dated December 28, 2017, guiding the determination and management of costs for urban public welfare services issued by the Minister of Construction./.