Does the company have to adjust the project when the construction volume is really reduced?

Does the company have to adjust the project when the construction volume is really reduced?

Mr. Bui Canh Viet works at PMU of Construction Investment City in Ba Ria - Vung Tau Province. His unit has a maintenance work, an asphalt concrete carpet of 22 roads, a total length of 20 km

During the actual construction, there is an approved road 1,000 m long, but the actual construction of the carpet is 1,300 m long; At the same time, there are some lines of actual construction length reduced compared to the design length. The total actual construction length of the 22 roads is still less than 20km.

Mr. Viet asked, with the above case, does the project need to be adjusted, or does the investor process the on-site minutes to settle according to the actual volume?

Construction investment projects are adjusted according to the following regulations:

- Article 61 of the Construction Law regarding the adjustment of construction investment projects:

“1. Cases of adjusting construction investment projects using state funds

include:

a/ Being affected by natural disasters, environmental incidents, enemy

sabotage, fires or other force majeure factors;

b/ Appearance of factors likely to bring about higher efficiency for the

project when the project owner has proved the financial and socio-economic

efficiency brought about by the project adjustment;

c/ Change of construction planning which directly affects the project;

d/ When the construction price index promulgated by the Ministry of

Construction or the provincial-level People’s Committee during the project

implementation is higher than the construction price index used for

calculation of inflation in the approved total investment amount of the

project.

2. The adjustment of projects using state funds shall be decided byinvestment deciders.

3. The adjustment of projects using other funds shall be decided byinvestment deciders on the basis of ensuring the requirements on planning,safety, environmental protection, fire and explosion prevention and fighting,and national defense and security, which have been approved by competent

state agencies.

4. If the project adjustment alters the construction objectives, scales andlocations, it shall be approved by a competent state agency.

5. The adjustment of construction investment projects shall be appraisedand approved.

6. The Government shall detail the formulation, appraisal, approval and

adjustment of construction investment projects”.

- Article 14 of the Government's Decree No. 59/2015 / ND-CP dated June 18, 2015 on construction project management stipulates:

“1. The adjustments to the projects funded by government budget capital or capital derived from loans, bonds, funds, etc shall comply with Point b and Point d Clause 1 Article 61 of the Law on Construction dated 2014#

a) The investor must give demonstration of additional effect on additional adjustment, including: Finance effect, socio-economic effect on business projects, projects requiring capital recovery; effect during construction stage, socio-economic effect on projects not requiring capital recovery;

b) Basic design of the project shall be adjusted when the construction planning changes directly affect to construction location, route, size, and use of constructions works of the project;

c) The adjustments to the project due to construction cost escalation shall comply with Decree on construction cost management.

2. Appraisal of the adjusted construction project or basic design shall comply with Article 11 of this Decree.

3. The investor shall request for adjustments to the project or basic design in order for the investment decision maker to consider making decision”.

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