Speeding up Disbursement of Public Investment Capital

10:40:56 AM | 31/7/2020

Promoting and disbursing full public investment capital for 2020 is a major and important goal to which the Vietnamese Government and the Prime Minister have paid special and regular attention. This is also one of the key tasks that contribute to supporting economic growth in the last six months of 2020.

Slow disbursement

According to the report by the Ministry of Finance of Vietnam, the estimated disbursement in the first six months was nearly VND160 trillion, reaching 33.9% of the plan. Although all levels, sectors and localities have firmly joined hands to accelerate the disbursement of public investment capital, the disbursement rate in the first six months was still low compared to the requirement. Three ministries, central agencies and 9 localities have disbursement rates over 50%; 33 ministries, central agencies and 3 localities have disbursement rates below 20%, of which, 7 ministries and central agencies have rates less than 5%.

According to the report by the Ministry of Transport, the ground clearance of the North-South Expressway Project in the east has basically been completed for the whole route. The total disbursed capital of 11 component projects is VND3,437 billion, equivalent to 38.3% of the plan for 2020.

Regarding the project of land acquisition, compensation and resettlement assistance for Long Thanh International Airport, in the first six months of 2020, about VND690 billion was disbursed, making the current accumulated disbursement over VND1,827 billion, reaching over 10% of the assigned plan.

In addition, the disbursement of five component projects being implemented in the form of public - private partnership (National Highway 45 - Nghi Son, Nghi Son - Dien Chau, Dien Chau - Bai Vot, Nha Trang - Cam Lam, Cam Lam - Vinh Hao) was VND1,338 billion out of the total VND 3,016 billion planned for 2020, reaching 44.36%.

According to the plan, for 2020, Vietnam must disburse US$28 billion, equivalent to over VND633 trillion. However, the disbursement results in the first six months show that the project and investment preparations are still weak and have many shortcomings, especially the ODA disbursement.

Recently, at the online briefing meeting between the Government and localities on promoting the disbursement of public investment capital, Prime Minister Nguyen Xuan Phuc affirmed that the cause of this situation was "bureaucracy”, because with the same policy mechanism, the disbursement was very good in some localities/agencies but stagnant in others.

According to Minister of Planning and Investment Nguyen Chi Dung, there are many persistent causes such as: site clearance, bidding, changes in policies and regulations, capacities of investors and contractors. Besides, 2020 is the last year of the medium-term public investment plan, so the ministries, central agencies and localities have to both complete the ongoing projects and prepare for projects in the period 2021-2025. In addition, the Covid-19 pandemic has also significantly affected the speed of capital disbursement in the first half of 2020.

Key tasks in the last months of the year

In 2020, the Government has made strong renovations in its administration to improve the efficiency of management and use of public investment capital, considering it a key solution to promote economic growth. Citing the General Statistics Office's study that if only 1% of public investment capital was raised, GDP growth would increase by 0.06%, Prime Minister Nguyen Xuan Phuc affirmed that public investment capital was an important solution to overcome difficulties, create jobs and promote growth.

Accordingly, the Prime Minister has decided to immediately transfer investment capital among ministries, sectors and localities right from August, instead of September as previously planned.

For the planned capital in 2020, which has not yet been assigned to any project, the Prime Minister requested ministries, agencies and localities to urgently allocate it before July 31; when the deadline is over, the Ministry of Planning and Investment will be assigned to lead and coordinate with the Ministry of Finance in reviewing and summarizing and reporting to the Prime Minister and the Government for transferring capital to other ministries, agencies and localities with better disbursement ability.

Localities with good disbursement of public investment capital (45% or more) in the first six months include Nghe An, Thai Binh, Hung Yen, Ninh Binh, Phu Tho, Bac Ninh, Ha Nam, Lao Cai and Tien Giang. Some localities disbursing capital very slowly (less than 20%) including Quang Tri, Tra Vinh, Khanh Hoa, Hoa Binh, Thai Nguyen, Can Tho, Da Nang, Ninh Thuan and Dong Nai.

The Prime Minister said that it was necessary to urge and specify the responsibilities of the leaders in charge of public investment disbursement. In the coming time, the Prime Minister proposed that chairmen of People's Committees of provinces and cities, and ministers, must have clear action plans in disbursing public and social investment capital in their sectors and localities; and report to the Prime Minister every two weeks on disbursement progress. The Government will impose sanctions for slow disbursement.

Most recently, Prime Minister Nguyen Xuan Phuc has signed a decision to set up several task forces to facilitate production and business, and accelerate the disbursement of public investment capital including ODA capital. These task forces are led by the Prime Minister, 4 Deputy Prime Ministers and 2 Ministers. This is considered one of the strong measures to accelerate the disbursement of all public investment capital in 2020.

The Ministry of Planning and Investment has also proposed other ministries, sectors and localities drastically and synchronously implement solutions, and promptly remove barriers to speed up the disbursement progress of public investment capital in 2020. This must be considered a key task to recover and develop the economy.

Ha Thu (Vietnam Business Forum)