Circular No. 13/2018/TT-BXD guides the valuation methods for sewage service.

CIRCULAR
Guidelines for the valuation method of wastewater services

Pursuant to Decree No. 81/2017/NĐ-CP dated July 17, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Clause 1, Article 38 of Decree No. 80/2014/NĐ-CP dated August 6, 2014 of the Government on wastewater and sewage treatment;

Pursuant to Decree No. 177/2013/NĐ-CP dated November 14, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Prices and Decree No. 149/2016/NĐ-CP dated November 11, 2016 of the Government amending and supplementing certain provisions of Decree No. 177/2013/NĐ-CP;

Article 1. Amending and supplementing certain articles of Circular No. 11/2021/TT-BXD dated August 31, 2021, issued by the Minister of Construction guiding certain contents on determining and managing construction investment costs

The Minister of Construction issues this Circular guiding the valuation method of wastewater services.

Article 1. Scope of Regulation and Applicability

1. This Circular guides the valuation method of wastewater services and sewage treatment (hereinafter referred to as wastewater services) for various types of wastewater systems to serve as a basis for establishing, reviewing, and approving the price of wastewater services applicable in cities, industrial zones, economic zones, export processing zones, high-tech zones (hereinafter referred to as industrial zones), and concentrated rural residential areas.

2. This Circular applies to organizations, individuals, and households engaged in activities related to wastewater and sewage treatment; organizations and agencies involved in establishing, reviewing, approving the price of wastewater services, and implementing wastewater services and sewage treatment within the territory of Vietnam.

3. Industrial clusters and craft villages are encouraged to apply the provisions of this Circular.

Article 2. Principles of Valuing Wastewater Services

1. The valuation of wastewater services must be consistent with technical and technological processes for treatment; standards and regulations; economic and technical norms for wastewater and sewage treatment published or issued by competent authorities; and consistent with service quality and state policies.

2. The price of wastewater services shall accurately cover all reasonable and legitimate costs of the investment and operation of the wastewater system; and be consistent with the actual conditions of service organization and local technical infrastructure.

3. The price of wastewater services may be determined separately for each type of wastewater service (maintenance of the wastewater system; sewage treatment) or for the entire wastewater service depending on the need for using wastewater services and the conditions for organizing the implementation of wastewater services.

4. The price of wastewater services (including maintenance of the wastewater system and sewage treatment) shall be uniformly determined based on cubic meters of wastewater, consistent with the connection characteristics of the wastewater system.

Article 3. Valuation of Wastewater Services

1. The cost of wastewater services per 1 cubic meter of wastewater is determined according to the following formula:

Z_TB= C_r / SL_T     (1)

Where:

a) Z_TB: Average cost of wastewater services per 1 cubic meter of wastewater (unit: VND/m³ average wastewater discharge fee (unit of measurement: VND/m³);

c) C_Tb) C

r_T: Total cost of wastewater services as determined under Article 4 of this Circular;³).

c) SL

: Total volume of wastewater collected and treated by the wastewater system (unit: m

of_DVTN For a common wastewater system: the total volume of wastewater treated by the system includes wastewater from households and other types of water discharged into the system. The volume of household wastewater is determined according to Article 39 of Decree No. 80/2014/NĐ-CP dated August 6, 2014 of the Government on wastewater and sewage treatment. If households using centralized clean water supply install flow meters for wastewater, the volume of wastewater will be calculated based on the flow meter readings. It is encouraged that households (excluding domestic wastewater) install flow meters for wastewater. The volume of other types of water (rainwater, other wastewater...) is calculated and determined according to current standards, regulations, and provisions. In particular, the volume of rainwater in the common wastewater system is determined based on current standards, regulations, and provisions regarding infiltration rates and average rainfall volumes for calculation purposes._TB 2. The price of wastewater services is determined according to the following formula:_TB DVTN

Where:

of_DVTN= {Z

Z_TB: Average cost of wastewater services per 1 cubic meter of wastewater (unit: VND/m³ + (Z

x P)} (2)

: Price of wastewater services;

: Average cost of wastewater services per 1 cubic meter of wastewater;

Factor K is an adjustment factor dependent on pollutant concentration, determined based on the pollutant concentration in the wastewater (not domestic wastewater) and the average COD (mg/l) measured at the discharge point of each household's wastewater system. COD concentration is determined based on laboratory test results. Factor K is determined as follows:

Article 4. Method for determining total actual reasonable costs to implement drainage services

1. Total actual reasonable costs to implement drainage services include:

2. The contents of each cost item are determined as follows:

a) Direct material costs (DMC) include the costs of materials directly used to maintain the drainage system and treat wastewater, calculated by multiplying the total quantity of each type of material used by the corresponding unit price. In this regard:

- The quantity of materials used to maintain the drainage system and treat wastewater shall be applied according to technical and economic standards and norms on maintaining the drainage system and treating wastewater issued by competent authorities as prescribed by law.

- The price of materials is the delivery price to the drainage and wastewater treatment site, consistent with the standard, type, and quality of the materials used; consistent with the market price level determined according to published prices or invoices as stipulated by law at the time of establishing the pricing plan.

b) Direct labor costs (DLC) include monetary expenses that drainage units must pay to workers directly involved in production such as wages, salaries, allowances with wage nature, other allowances (if any), social insurance, health insurance, unemployment insurance, trade union fees, and other expenses as prescribed for workers directly involved in wastewater treatment and drainage system maintenance, including:

- Wages and salaries are determined by multiplying the number of working days according to the direct labor consumption quota for drainage system maintenance and wastewater treatment work, as announced or issued by competent authorities, by the corresponding daily wage rate. The daily wage rate of workers directly providing drainage services is determined according to the regulations of competent state agencies (Ministry of Labor, Invalids and Social Affairs; People's Committee of provinces and centrally-administered cities) and includes basic wages and allowances as prescribed by law.

- Social insurance, health insurance, unemployment insurance, trade union fees, and other expenses of workers directly providing drainage services according to current legal provisions (including those paid by the enterprise).

c) Direct machine and equipment costs (DMEC) are determined based on costs related to the price of machines and equipment, management and usage systems, and depreciation of machines and equipment as prescribed by the Ministry of Finance; the method for determining machine operation costs is guided by the Ministry of Construction, and other relevant regulations.

Depreciation costs of machines and equipment directly serving drainage system maintenance and wastewater treatment work already included in this section (DMEC) shall not be counted in the common production costs of the enterprise.

d) Common production costs (CPC) are indirect production cost items (excluding direct material costs, direct labor costs, and direct machine and equipment costs as stipulated in Points a, b, and c Clause 2 of this Article) incurred at facilities implementing drainage services of the enterprise, including: depreciation, maintenance, repair, and upkeep of fixed assets (excluding direct machines and equipment); material, tools, and equipment costs for workshops; wages, salaries, allowances with wage nature; social insurance, health insurance, unemployment insurance, and trade union fees for workshop staff (including those paid by the enterprise); sludge disposal costs, and costs for maintaining greenery within the wastewater treatment plant premises (if applicable); pre- and post-treatment effluent testing costs, discharge system costs, external service procurement costs, and other monetary costs included in production costs as prescribed by law.

Material and labor costs in common production costs are applied as prescribed in Points a and b Clause 2 of this Article.

Fixed asset depreciation costs are implemented according to the Ministry of Finance's regulations on management, use, and depreciation of fixed assets. For long-term invested fixed assets like parts of drainage system infrastructure where investment costs cannot be determined, the unit establishing the drainage system maintenance and wastewater treatment service pricing plan shall determine the remaining reasonable original value based on the Ministry of Finance's regulations on management, use, and depreciation of fixed assets to serve as the basis for calculating depreciation costs.

Common production costs are detailed according to the above cost items but shall not exceed:

- For drainage system maintenance services: 25% of direct labor costs (DLC)_NC);

- For wastewater treatment services: 15% of direct costs (including material costs, labor costs, and direct machine and equipment costs).

đ) Business management costs (BMC) are the total costs allocated to the enterprise's management and operational machinery, general costs shared by the entire enterprise, including: depreciation and repairs of fixed assets serving the management and operational machinery within the enterprise; wages, salaries, and allowances with wage nature; social insurance, health insurance, unemployment insurance, and trade union fees for the enterprise's management machinery (including those paid by the enterprise); office material and supply costs, taxes, fees, and charges, external service procurement costs under the enterprise's office; other general management costs for the entire enterprise such as interest payments, inventory valuation reserves, bad debt reserves, hospitality, transaction costs, scientific research and technological innovation costs, incentive and improvement costs, environmental protection costs, education and training costs, healthcare costs for enterprise employees, female employee costs, and other management costs as prescribed by current regulations._q) is the total of expenses for managing and operating the enterprise's administrative apparatus of the drainage unit, including general expenses of the entire enterprise such as: depreciation, repair costs for fixed assets serving the management and operation within the enterprise; labor costs, wages, and allowances with the nature of wages; social insurance, health insurance; unemployment insurance and trade union fees of the enterprise's management apparatus (including amounts paid by the enterprise); office supplies and material costs, taxes, fees, and charges, external service costs belonging to the enterprise's office; other common management expenses for the entire enterprise such as: interest payment costs, inventory write-down provisions, bad debt provisions, hospitality, transaction costs, scientific research costs, technological innovation research costs, initiative and improvement costs, environmental protection costs, education and training costs, healthcare costs for enterprise employees, costs for female workers, and other management costs according to current regulations.

The method for determining material costs, labor costs, and depreciation expenses of fixed assets in business management costs shall be applied as prescribed in points a, b, and d of Clause 2 of this Article.

Business management costs shall be detailed according to each cost item mentioned above but shall not exceed 5% of total production costs (C)._{"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:}).

3. When determining the total actual costs for implementing drainage services, the drainage unit must accurately calculate all reasonable and valid actual costs; exclude costs that cannot be included in the total actual costs for implementing drainage services according to the general pricing method for goods and services issued by the Ministry of Finance and relevant legal provisions.

For units and businesses engaged in multiple activities beyond just drainage services, common production costs and business management costs must be separately allocated to drainage services during the calculation period in accordance with accounting laws and relevant legal provisions.

4. In cases where there are no economic-technical norms established by competent state authorities to determine the consumption of materials, labor, machinery, and equipment directly, the unit shall develop a pricing plan to reasonably determine such consumptions and submit it to the People's Committee of the province or centrally administered city for approval as a basis for determining direct material, labor, machinery, and equipment costs when developing a pricing plan for drainage services.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

1. Responsibilities for establishing, reviewing authority, and approving drainage service prices shall be carried out in accordance with Article 41 of Decree No. 80/2014/NĐ-CP dated August 6, 2014 of the Government on Drainage and Wastewater Treatment.

2. The Ministry of Construction shall take the lead in guiding and supervising the development of pricing plans and the implementation of regulations on managing drainage service prices in localities.

3. The People's Committees of provinces and centrally administered cities shall have the responsibility:

 - To manage state activities related to drainage and wastewater treatment within their jurisdiction; decide on the objects of collection, rates, and schedules for collecting drainage service fees from households within their jurisdiction in accordance with the characteristics and features of the drainage system, specific economic and social conditions, and budget balancing capabilities of the locality at different times;

- Submitting norms, unit prices, and published prices to the Ministry of Construction for monitoring and management.

4. For drainage service contracts signed and implemented before the effective date of this Circular, they shall be executed according to the terms of the signed contract. For contracts signed before the effective date of this Circular but not yet implemented, the parties involved in the contract shall review and adjust the contract contents to comply with the provisions of this Circular.

Article 6. Effectiveness

This Circular takes effect from February 15, 2019, and replaces Circular No. 02/2015/TT-BXD dated April 2, 2015, issued by the Minister of Construction guiding the pricing method for drainage services./.