According to reports from the Ministry of Finance, in the current economic context, the demand for investment capital of ministries and localities is quite high relative to balancing capability, while basic construction debt (debts to works done) and counterpart funding for ODA projects are not adequately counted. Hence, the pressure on capital allocation is huge.
Many new projects reduced
Capital allocated to new projects is very limited but the number of projects reviewed for approval of capital allocation by ministries and localities is many. The Ministry of Finance alone has coordinated to review 1,100 projects. Thus, according to the Ministry of Finance, if there is no resolution to reduce or postpone new projects at all levels, spreading and unfocused investment will not be solved. In spite of high pressure, ministries and localities are still slow to seek and change investment methods as they still wait for a support from State Budget.
However, 2013 is the second straight year Vietnam strictly tightened investment in the spirit of Directive 1792/CT-TTg of the Prime Minister dated October 15, 2011 and ministries and localities thus confront no major troubles in implementation procedures, investment planning, investment allocation and examination of central inspection authorities.
After its inspections, the Ministry of Finance raised its voice about improper but slow-fixing capital allocation as happened at the Ministry of Natural Resources and Environment and Ministry of Industry and Trade, and some localities like Vinh Phuc, Bac Lieu and Ben Tre provinces and Hanoi City.
The Ministry of Finance said in its report that investment capital payment in the first 11 months of 2013 fulfilled 78 percent of basic construction capital planned by the State and 85 percent of capital raised from government bonds. While some units rapidly completed their full-year plans, some others are slow in this aspect, like the Vietnam National Shipping Lines (Vinalines), Government Inspectorate of Vietnam, Dak Lak and Kon Tum provinces with basic construction capital, and Tay Ninh and Gia Lai provinces and Ho Chi Minh City with government bonds. The Ministry of Finance issued reports and dispatched documents of urgency in a bid to accelerate capital disbursement in the remaining months of the fiscal year 2013, especially to units with low disbursement rate.
The ministry added that many localities have received advance capital for their projects and sluggish project progress caused difficulty in taking back outstanding advance capital. This has generally troubled State financial - budgetary management.
Resolute to end improperly allocated projects
To complete investment plans in 2013 and effectively carry out investment plans in 2014, the Ministry of Finance said it will ensure capital to meet the schedule and facilitate ministries, localities and project owners to complete their projects in 2013 and 2014 as scheduled. The ministry will continue to update and complete State capital management policies by enhancing accountability, stepping up inspection and supervision at all levels to use investment capital effectively.
It will also request ministries and localities, within their jurisdiction, take responsibility for capital assigned, work out medium-term and annual investment plans based on guidelines. It will give special priority to basic construction debt settlement and reimbursement to the State Budget.
As for investment plans in 2013, it will enhance guidance to pace up the completion of annual plans in the remaining time of the year. Advance funds allocated must be implemented in accordance to guidelines. The progress will be updated and reported to competent agencies. The ministry will report to the Prime Minister and propose a complete recall of expenditures against regulations.
Development investment expenditure estimation for 2014 was already adopted by the lawmaking National Assembly. After the Minister of Planning and Investment makes decisions on specific assignments, ministries and localities need to quickly allocate the assigned capital in accordance with the laws and report the progress to competent units. The Ministry of Finance will inspect the allocation process and resolve to end improperly allocated projects, take back counterpart capital and publicise reports on plan implementation and capital disbursement of ministries and localities. Ministries and localities are advised to actively and positively attract investors from all economic sectors to join PPP and BOT projects to supplement resources and capital for infrastructure projects.
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