On August 14, 2019, the Government issued Decree No. 68/2019 / ND-CP stipulating the management of construction investment costs applicable to projects funded by state budget and state capital off-budget and investment projects in the form of public-private partnerships (PPP). This Decree takes effect from October 1, 2019.
Accordingly, this Decree provides for the content of costs of total investment, specifically in Article 4:
a) Costs of compensation, support and resettlement include expenses for compensation for land, houses, structures on land, assets attached to land, water surface and other compensation costs as prescribed; allowances when the State recovers land; resettlement costs; organization of compensation, support and resettlement; expenses for land use, land lease during construction (if any); expenses for relocation and reimbursement of the technical infrastructure already invested in construction (if any) and other relevant expenses;
b) Construction costs include construction costs of works and construction items of the project; works and items of temporary construction works and auxiliary works in service of construction; The cost of demolition of construction works is not within the scope of site clearance that has been determined in the cost of compensation, assistance and resettlement. The structure of construction costs includes: direct costs, indirect costs, pre-calculated taxable income, value added tax;
c) Equipment expenses include expenses on procurement of construction equipment and technological equipment; expenses for management of procurement of construction equipment by contractors; expenses for purchasing software copyrights used for construction equipment and technological equipment of the project (if any); expenses for training and technology transfer (if any); expenses for processing and manufacturing non-standard equipment (if any); installation, testing and calibration costs; expenses for running equipment tests according to technical requirements; transportation and insurance costs; taxes and other related fees and charges;
d) Project management costs include expenses for organizing the implementation of project management tasks from project preparation, project implementation and construction completion and putting project works into operation. For investment projects in the form of public-private partnership (PPP) project management costs include project management costs of competent state agencies, operating expenses of project management units under state agencies competent to implement projects and project management costs of investors;
đ) Costs of construction investment consultancy include construction consultancy costs, preparation of pre-feasibility study report, report on proposal of investment guidelines for projects of groups B and C according to regulations of Law on Public Investment, prepare feasibility study report or economic – technical report; design costs, construction supervision consultancy costs and other related consultancy costs;
f) Other expenses including necessary expenses for execution of work construction investment projects, such as expenses for clearance of boms, mines and explosive objects; cost of work insurance during construction period; project evaluation, design and construction cost estimates and fees; expenses for auditing, verifying and approving investment capital settlements and other necessary expenses for executing work construction investment projects but not falling into the contents prescribed at Points a, b, c, d, đ, Clause 4 of this Article;
g) Contingency cost includes contingency cost for arising work volume and contingency cost for inflation during project implementation.
In summary, the promulgation of Decree 68/2019 / ND-CP has created a legal corridor for the management of construction investment projects using state capital, in the context of need for transparency and publicity in state budget management activities.