Summary of Investment Management Expense Categories for Forestry Projects

According to the provisions of Circular 15/2019/TT-BNNPTNT, the project management cost estimates for forest engineering works are calculated based on the current technical and economic norms. The cost categories include:

Illustrative image (source: internet)

1. Construction Costs:

- Direct costs, including:

- Labor costs: site preparation, planting, care, inspection, supervision, forest protection, and other related costs;- Machinery and equipment costs: land preparation, transportation of seedlings by machine; leveling, bulldozing, firebreak, and other related costs;- Material costs: seeds, fertilizers, pesticides, and other related materials;- General costs: calculated at 5.0% of direct costs, including:- Safety equipment, labor protection, and environmental protection costs for workers and the surrounding environment;- Costs for transporting machinery, equipment, and workforce to and from the site;- Costs for ensuring traffic safety during construction (if any).

- Pre-determined taxable income: the estimated profit in the construction project estimate, calculated at 5.5% of the total direct and general costs;- Value-added tax implemented according to state regulations.

2. Equipment Costs: including the purchase of technology equipment (including technology equipment requiring production, processing), installation and testing, equipment adjustment, transportation, equipment insurance, training, and technology transfer.

3. Management Costs: calculated at 3.0% of the total construction and equipment costs, including the costs for organizing the management of the project from the preparation stage to completion, acceptance for exploitation and use.

4. Construction Investment Consultancy Costs: determined by detailed estimates, including surveys; design and estimate preparation; supervision, and other related consultancy costs.

5. Other Costs:

- Bomb and mine clearance;- Construction of temporary housing on site for living and construction management; costs of restoring affected infrastructure during construction;- Construction insurance during the implementation period. In cases where the project is encouraged to buy insurance, the cost of insurance is included in the total construction investment amount;- Audit, verification, and approval of investment capital settlement;- Inspection and acceptance during construction and upon completion of construction by the competent state management agency;- Related scientific and technological research; loan interest during construction (excluding the value of recovered products);- Resource taxes, fees, and charges according to regulations;- Costs for other related tasks.

6. Contingency Costs:

- Contingency costs for additional work volume calculated at 5.0% of the total construction, equipment, management, construction investment consultancy, and other costs;- Contingency costs for price fluctuation factors determined based on the construction period (in months, quarters, years), domestic and international price fluctuation potential.

For projects involving natural forest regeneration and protection carried out by contracting households, individuals, and community residents: the contracted value for the contracted entities, file preparation costs, and other costs apply state support norms according to current policies.

More details can be found in Circular 15/2019/TT-BNNPTNT, effective from January 1, 2020.

Thu Ba

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