Ministry of Housing and Urban-Rural Development: The actual cost of project quality guarantee funds used for project maintenance is relatively low

The State Council Information Office held a regular policy briefing of the State Council on the morning of June 9. Li Rusheng, Director-General of the Department of Engineering Quality and Safety Supervision of the Ministry of Housing and Urban-Rural Development, introduced the fee reduction of construction project quality margins. Li Rusheng pointed out that it is understood that the actual expenditure of construction project quality margins used for project maintenance is relatively low, and a large amount of quality margins are idle funds. Therefore, lowering the upper limit of the reserve ratio of construction project quality margins will not affect the performance of project quality maintenance responsibilities.

　　Li Rusheng mentioned that on June 7, the executive meeting of the State Council launched new fee reduction measures, among which it was decided to lower the upper limit of the reserve ratio of construction project quality margins in the construction sector from 5% to 3%, so as to effectively reduce the burden on construction enterprises.

　　Li Rusheng introduced that a construction project quality margin refers to the fund agreed by the project employer and the contractor in the construction project contract, which is used to guarantee that the contractor fulfills the defect repair obligation during the defect liability period of the construction project (generally 1 to 2 years). Construction project quality margins are usually calculated according to a certain percentage of the total project settlement price, and reserved by the employer from the contractor's project settlement payment. During the defect liability period, the contractor shall fulfill the responsibilities agreed in the contract; when the defect liability period expires, the employer shall return the project quality margin to the contractor.

　　Li Rusheng stated that according to our understanding, the actual expenditure of construction project quality margins used for project maintenance is relatively low, and a large amount of quality margins are idle funds. Therefore, lowering the upper limit of the reserve ratio of construction project quality margins will not affect the performance of project quality maintenance responsibilities. At the same time, lowering the upper limit of the reserve ratio of construction project quality margins, on the one hand, can effectively reduce the capital occupation of construction enterprises, supplement working capital, reduce bank loans, cut enterprise operating costs, and further reduce the burden on construction enterprises; on the other hand, after enterprises have sufficient capital, they can increase investment in updating machinery and equipment, technological research and development, personnel training and other aspects, which is conducive to improving the level of project quality.

　　Li Rusheng pointed out that in the next step, the Ministry of Housing and Urban-Rural Development will work with the Ministry of Finance to revise and promulgate relevant regulations such as the Measures for the Administration of Construction Project Quality Margins as soon as possible, intensify work efforts, ensure that the decision and deployment of the State Council are implemented in place, and effectively reduce the burden on construction enterprises.

　　Chinanews, June 9 The State Council Information Office held a regular policy briefing of the State Council this morning. Li Rusheng, Director-General of the Department of Engineering Quality and Safety Supervision of the Ministry of Housing and Urban-Rural Development, introduced the fee reduction of construction project quality margins. Li Rusheng pointed out that it is understood that the actual expenditure of construction project quality margins used for project maintenance is relatively low, and a large amount of quality margins are idle funds. Therefore, lowering the upper limit of the reserve ratio of construction project quality margins will not affect the performance of project quality maintenance responsibilities.