August 09, 2020 09:11

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Disbursement of public investment: Key to growth in 2020

08:56 | 28/03/2020

VCN – For the impact of the Covid-19 epidemic on the economy, the Prime Minister required a quick response to finance, economy, and production to compensate for the economic decline caused by the pandemic. One of the important solutions emphasised by the head of the Government is to focus on clearing public investment disbursement bottlenecks to promote development and remove bottlenecks for the economy.

disbursement of public investment key to growth in 2020 Disbursement of public investment capital delayed by Covid-19 epidemic
disbursement of public investment key to growth in 2020 State Treasury disbursed public investment capital from the beginning of the year
disbursement of public investment key to growth in 2020 Promote disbursement of public investment from the beginning of the year
disbursement of public investment key to growth in 2020
Three component projects of the North-South Expressway project under PPP implementation will be included in the public investment portfolio to accelerate investment. Photo: collected.

Disbursement of public investment still slow

In 2020, total public investment capital allocated to the ministries, branches and localities by the National Assembly and the Government is VND470,600 billion. According to the plan, 51/53 ministries and branches have been allocated VND84,000 billion, 63 provinces and cities have been allocated more than VND363,000 billion. However, in the first two months, the rate of disbursed public investment was still low. Data from the General Statistics Office shows that investment capital implemented from the State budget in the first two months of the year reached VND36.9 trillion, equaling 8.3% of the year plan and up 17.8% compared to the same period of last year. Explaining this, according to the General Statistics Office, February is the month after the Lunar New Year and is affected by the Covid-19 epidemic, so some contractors delayed construction, and in the first months of the year, investment focused mainly on constructing transitional works from the previous year.

For example, in Vinh Phuc, the disbursement of public investment is still slow. As of January 31, 2020, Vinh Phuc's total public investment was VND6,624.5 billion. From the beginning of the year, the provincial People's Committee has allocated more than 5,162 billion dong, but according to the report of the provincial People's Committee, until January 31, 2020, the whole province disbursed 205,427 billion dong, equal to 3.8% of the plan assigned.

QuangNinh is a locality with a slow disbursement progress when only 2% of the allocated public investment capital has been disbursed in the first 2 months.

Facing this situation, recently, the Prime Minister issued a Directive on urgent tasks and solutions to remove difficulties for production and business, thereby, speeding up the implementation and disbursement of public investment capitalis one of 7 solutions with special emphasis. The Prime Minister requested ministries, central agencies and localities urgently complete investment procedures, hand over all plans of investment capital from the State budget in 2020 in March 2020, speeding up the implement and disburse progress of remaining public investment of 2019 and 2020 (including ODA). At the same time, to focus on directing and soon completing and putting into use large and important infrastructure works, maximising the design capacity and socio-economic efficiency. To request ministries, branches, localities, State-run corporations and corporations regularly check and take measures to remove difficulties and obstacles to ensure the work schedule, volume and quality.

Need breakthroughs with key projects

Speeding up disbursement of public investment is one of the basic contents to stimulate economic demand, especially when Vietnam's economy is facing difficulties caused by the Covid-19 pandemic. According to experts, without drastic and breakthrough solutions, motivation considered important for promoting economic development will continue to be wasted.

One of the drastic measures of the Government highly appreciated at this time is the Government's agreement to convert investment from PPP to public investment for a number of urgent projects to use effectively, maximising capital sources, speeding up the investment schedule, putting the works into use soon, making an important contribution to promoting growth. Specifically, immediately after issuing instructions on urgent tasks and solutions to remove difficulties for production and business, the Government Standing Committee also had a meeting about solutions to accelerate the progress of investment projects in building a number of sections on the North - South expressway and My Thuan - Can Tho expressway project. At this meeting, the Government Standing Committee agreed to submit to the National Assembly for decision to convert three component projects of the North-South Expressway project under PPP construction to public investment which starts in August, 2020.

Previously, for this content, the Prime Minister also directed the Ministry of Transport to coordinate with MPI and relevant agencies to study and propose competent authorities about the conversion from investment in the form of public-private partnerships to public investment for key projects, such as the My Thuan - Can Tho expressway project, the component projects of a construction investment project on some sections of the North Expressway - South East in 2017-2020, consider the application of investor appointment, ensuring strict compliance with provisions of law to accelerate project implementation. At the same time, urgently complete procedures and promote disbursement and implementation of large-scale and important public investment projects that have spillover effects, creating motivation for socio-economic development such as projects to expand Tan Son Nhat and Noi Bai international airports and build Long Thanh international airport; North - South East Expressway in the period of 2017-2020 must not be delayed as before.

Talking about advantages of disbursement of public investment this year, Deputy Minister of Planning and Investment Tran Quoc Phuong said currently, some authorities related to the approval of investment policies and investment decisions as well as approval of decisions to transfer capital from projects with low disbursement levels to projects with a higher disbursement are strongly decentralised to ministries, branches and localities.

According to Tran Quoc Phuong, for big projects such as Long Thanh International Airport and the North-South Expressway in the east, the basic capital arrangement meets requirements, but there are still some obstacles for procedures to clear ground of Long Thanh International Airport, bidding for the north-south expressway. When completing the procedure, it can be started immediately and a large amount of capital will be disbursed.

However, MPI representative also noted that in 2020, two tasks must be carried out in tandem, focusing on disbursing the implementation of the 2020 plan and developing a public investment plan for 2021 - 2025. It will divert focus on direction as well as resources for implementation.

“The determination of the head is very important to promote disbursement. Many of the project's work must be conducted in parallel, urgently so that when the project starts to be implemented, capital will be disbursed can be disbursed immediately," Tran Quoc Phuong noted.

Many people believe that with promoting this capitaltimely, sanctions should be strictly punished for individuals who are responsible for delaying this process.

Minister of Planning and Investment Nguyen Chi Dung:

To accelerate the disbursement of public investment capital in 2020, it is necessary to direct investors to accelerate the project implementation schedule; resolutely, severely and promptly handle contractors that violate construction schedule, work quality, delay delivery of payment procedures for volume of completed work and violate signed contract terms; proactively propose and report on transfer of construction volumes of contractors at risk of delay to other contractors for implementation; strictly handle individuals in the unit intentionally obstructing, causing difficulties, slowing down the implementation and disbursement progress of the project. Promptly replace the weak or harassing, negative officials and labourers in the performance of the task of managing investment capital and in the bidding work.

 

By Hoai Anh/ Binh Minh