Joint Circular No. 38/2004/TTLT/BTC-BXD guiding the notification and control of construction material prices in the investment and construction sector.

JOINT CIRCULAR

Guidelines for the announcement and control of construction material prices

in the investment and construction sector

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 Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment and Construction Management Regulation; Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government amending and supplementing certain provisions of the Investment and Construction Management Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government; Decree No. 07/2003/NĐ-CP dated January 30, 2003 amending and supplementing certain provisions of the Investment and Construction Management Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government;

Pursuant to Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing the implementation of certain provisions of the Price Law;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 36/2003/NĐ-CP dated April 4, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

To implement cost management in investment and construction, the Ministry of Finance and the Ministry of Construction provide guidelines for the announcement and control of construction material prices in the investment and construction sector for construction projects as follows:

I. SCOPE AND SCOPE OF APPLICATION

This Circular guides the announcement and control of construction material prices in the investment and construction sector for investment and construction projects using state budget funds, credit guaranteed by the State, state development credit, development credit of state-owned enterprises, and other sources of capital borrowed and repaid by state-owned enterprises without State guarantees as stipulated in Articles 10, 11, and 12 of Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of the Investment and Construction Management Regulation, Clause 4, 5, and 6 of Article 1 of Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government, and Clause 4, 5, and 6 of Article 1 of Decree No. 07/2003/NĐ-CP dated January 30, 2003 of the Government. In addition, it encourages projects

For centrally-managed construction projects built in local areas, the applicable price levels must be applied.

The price level in the announcement of construction material prices to the construction site is the maximum price that can be used to calculate unit prices, adjust material costs, or adjust the project estimate value.

For equipment prices in investment and construction, the following must be implemented.

II. ANNOUNCEMENT OF CONSTRUCTION MATERIAL PRICES TO THE CONSTRUCTION SITE

1. Each quarter during the year, the Department of Finance shall coordinate with the Department of Construction (Joint Departments) to announce construction material prices to the construction site in accordance with the local price level.

If necessary, Joint Departments may announce supplementary prices and adjust prices for some new types of materials and materials with significant price fluctuations monthly.

2. The list of major and common types of materials included in the announcement of construction material prices to the construction site is attached as Appendix 1.

3. Based on the local price level and specific conditions of the province or centrally-administered city, the Department of Finance and the Department of Construction shall determine the market price of common construction materials in the locality to announce construction material prices to the construction site within the locality.

If the conditions for determining construction material prices at the construction site according to Appendix 2 are met, the Department of Finance and the Department of Construction shall determine the supply source, average transportation distance, road grade, and commodity class of major and common construction materials to determine the construction material prices at the construction site.

4. Materials used in the project must meet technical requirements.

5. For construction projects permitted to establish construction unit prices, the method for calculating construction material prices at the construction site as specified in Appendix 2 shall be used to determine the construction material price list as the basis for establishing construction project unit prices.

6. For projects located in remote mountainous, island, or linear regions where material transportation to the project site has many differences, the project sponsor and related units shall base their determination of construction material prices at the construction site for the project on the method for calculating construction material prices at the construction site (Appendix 2), report to Joint Departments for verification and announcement.

7. For border areas between provinces or centrally-administered cities, the Joint Departments of these provinces or cities need to exchange information before issuing the announcement to avoid significant price differences in construction materials.

III. IMPLEMENTATION

1. The Ministry of Finance and the Ministry of Construction will periodically or randomly inspect the implementation of the announcement of construction material prices by provinces and centrally-administered cities.

2. Provincial People's Committees shall instruct the Department of Finance and the Department of Construction to strictly implement the announcement of construction material prices to the construction site in their locality.

3. The Department of Finance, the Department of Construction, and relevant agencies shall regularly inspect the implementation of the announcement of construction material prices to the construction site as stipulated in their locality.

Any discrepancies discovered through such inspections will result in the handling of all excess payment amounts that are not in compliance.

4. Project sponsors and construction contractors must base their selection of procurement and use of construction materials for the project on design requirements, construction quality management regulations, and the provisions of this Circular to achieve the highest economic efficiency.

This Circular replaces Circular No. 03/TT-LB dated July 27, 1996 of the Inter-Ministerial Committee on Prices under the Government - Ministry of Finance - Ministry of Construction on guiding the implementation of the announcement and control of construction material prices and equipment prices in the investment and construction sector and takes effect 15 days after its publication in the Official Gazette. During the implementation process, if there are any difficulties, please report them to the Ministry of Finance and the Ministry of Construction via the provincial People's Committees for timely resolution.

During the implementation process, if any difficulties arise, it is recommended that the People's Committees of the provinces and centrally governed cities report to the Ministry of Finance and the Ministry of Construction for timely resolution./.