Speeding up Disbursement of Public Investment Capital

9:21:59 AM | 10/13/2021

The Government of Vietnam has issued a resolution to direct public investment activities to create leverage promoting socio-economic recovery and development in the context of the COVID-19 pandemic adversely affecting the global economy, as well as Vietnam’s economy. However, from the beginning of 2021 until now, the disbursement of public investment capital has been slow, significantly affecting the socio-economic development goals of localities and the whole country.

New disbursement reached 47.38% of the plan

At the online national conference with ministries, branches and localities on the disbursement of public investment capital in 2021, the report of the Ministry of Finance showed that the disbursement in the first 8 months of the year reached VND183,320 billion, achieving 39.74% of the plan assigned by the Prime Minister (VND461,300 billion). Disbursed capital until September 30, 2021 was about VND218,550 billion, reaching 47.38% of the plan.

According to the Minister of Planning and Investment Nguyen Chi Dung, the disbursement of public investment capital is slow due to many objective and subjective reasons that have existed for a long time, such as site clearance, bidding; changes to policies and regulations; capacity of investors and contractors; and avoiding payment of capital in installments, or waiting for a one-time payment of investors. So, the implementation and construction plans of works and projects also depend on capital planning.

In addition to the above reasons, in the first months of the year, there were a number of other reasons that affected the disbursement progress of public investment capital. 2021 is the transition year between the two terms and consolidating the organization, apparatus and personnel; the first year of a new planning cycle, with public investment priorities focused primarily on preparation for the next five years.

For new construction projects in the period 2021-2025, the focus is on preparing for investment in the first months of the year and only implementing them after being assigned a medium-term public investment plan for the period 2021- 2025.

The year 2021 is a very special year because never before has our country's economy put so much effort and resources into pandemic prevention and control, and never before have so many provinces, cities and localities implemented social distancing measures.

Deputy Prime Minister Pham Binh Minh, Head of the Prime Minister's Special Working Group on reviewing, removing difficulties and obstacles and promoting the implementation of investment projects, said that the total number of projects implemented in 2021 is about 2,511 projects, including 2,021 projects transitioned from previous years, and only 490 new projects which started construction.

Through the exchange, the Working Group has received more than 80 problems related to regulations, more than half of which are due to incorrect and different interpretations of localities. Another reason is the poor preparation of the project, so when it faces difficulty in implementing, local leaders do not participate but assign all to the project management boards, while the management board does not have enough capacity. “The lesson learned is that all levels and sectors have to raise their responsibilities further in the effective management and use of public investment capital. Each ministry, central agency and locality will be the unit that directly offers the most effective solutions for each project implemented by the ministry or locality," said Minister Nguyen Chi Dung.

Controlling the pandemic to recover and implement public investment

Assessing the situation and tasks on disbursement of public investment capital in the coming time, Prime Minister Pham Minh Chinh stated that from now until the end of the year there were only 3 months left, but more than 50% of public investment capital remained to be disbursed. This is a huge challenge that requires a lot of effort and determination.

The Ministry of Planning and Investment has proposed 5 groups of solutions in the coming time. Accordingly, ministries, agencies and localities will drastically and synchronously implement solutions, promptly remove barriers, difficulties and obstacles, and clear bottlenecks to speed up the disbursement of public-private investment capital in accordance with the Government's resolutions and the Prime Minister's direction.

The Ministry of Health urgently issues guidance on a roadmap to return to the new normal, with instructions for those fully vaccinated and those having been infected and recovered from COVID-19, and carrying out social-economic activities safely to prevent and control the COVID-19 pandemic.

Other groups of solutions are to develop and amend regulations that are overlapping, hindering public investment activities; to step up the application of information technology in cost control; and continue to promote the activities of the Prime Minister's Special Working Groups.

In addition to the above solutions, the Prime Minister also proposed a number of additional solutions, which emphasized the good control of the pandemic for early recovery and implementation of investment, production and business activities.

The Ministry of Health urgently issues temporary guidance on the basis of geographical areas and objects as narrowly, quickly and flexibly as possible.

In particular, according to the Prime Minister, the allocation of capital must be carefully prepared, choosing the right projects. Ministers and chairpersons of People's Committees of provinces and cities promote their role as leaders, directing the organization to effectively implement solutions agreed upon on the basis of the provisions of law and the Government's resolutions. Ministries and sectors, especially the Ministry of Finance, provide specific instructions to soon complete the assignment of detailed capital plans for new programs and projects, carefully review and proactively adjust capital from slow-disbursing projects to a well-disbursing projects, from one agency or locality to another according to public-private to regulations.

The Prime Minister requested to continue to facilitate the circulation of goods and materials, ensuring safety. The Ministry of Planning and Investment will review and minimize administrative procedures. The Ministry of Finance will continue to review and simplify procedures, shorten the time to control payments, and withdraw capital from donors abroad, preventing document backlogs and promptly handling problems in payment and settlement. The Government Office, the Ministry of Planning and Investment will publicize the monthly disbursement progress of ministries, agencies and localities on the portal and mass media.

By Quynh Anh, Vietnam Business Forum