VCN - The disbursement rate of public investment capital in the first eight months of 2019 reached only 37.92 percent. There have many been a number of problems recorded in the disbursement. Despite amendments and supplements to remove shortcomings and perfect policies, the implementation was not synchronized and this the result was not as expected.
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The latest statistics of the Ministry of Finance show that the estimated disbursement of investment capital for state budget development in the first 8 months of 2019 reached more than VND161,286 billion, equivalent to 37.92 percent of the plan assigned by the National Assembly and 41.39 percent of the plan assigned by the Prime Minister. This figure is lower than the same period in 2018 (45.57 percent).
Specifically, it could be seen that domestic capital was more than VND152,522 billion, of which the Government bond capital only reached 23.22 percent of the plan assigned by the Prime Minister. The national target program capital was 36.47 percent of the assigned plan. Disbursed foreign capital reached more than VND8,748 billion, equivalent to 19.18 percent of the plan assigned by the Prime Minister, much lower than the rate of 27.02 percent of the plan assigned by the Prime Minister in the same period in 2018.
According to the Ministry of Finance, there were five ministries and sectors and six localities with disbursement rates of over 70 percent. Notably, Hai Duong reached over 85 percent, Ninh Binh reached over 82 percent, and Hung Yen, Thanh Hoa and Phu Yen reached over 70 percent. The ministries and sectors with highest disbursement rate were the Vietnam Writers’ Association (more than 83 percent), Vietnam Electricity (over 80 percent), Vietnam Bank for Social Policies (over 78 percent), and the Management Board for President Ho Chi Minh Mausoleum and the Ministry of Defense (more than 73 percent). However, up to 29 ministries and sectors and 18 localities have a low disbursement rate of below 40 percent. In particular, disbursement rates of localities fell by more than 15 percent to more than 35 percent. There are still ministries and sectors that have not disbursed any capital yet, particularly the Vietnam Bank for Agriculture and Rural Development. Some ministries and sectors have not implemented the disbursement or have a disbursement rate of below one percent. For those with large capital allocation plans such as the Ministry of Transport, the Ministry of Health and the Ministry of Education and Training, the disbursement reached less than 30 percent of the capital plan.
In summary, by the end of almost three quarters of 2019, the capital disbursement is still very slow and fails to the meet the goal.
After summarizing reports, the Ministry of Finance conducted inspections at a number of ministries, sectors and localities on the disbursement of investment capital plans for 2018 and 2019, thereby identifying reasons and problems. Specifically, problems in development, allocation and adjustment of capital plans. Some projects using Government bonds and ODA capital were allocated with a higher capital than the capital registered by investors; some projects incapable of implementation were still registered and allocated with capital, the disbursement could not be implemented; allocation of capital plans was still slow, the capital allocation did not meet projects’ progress.
Because of the above problems, some investors have not anticipated the impact factors; the development of capital plans has not been close to the implementation capacity, leading to the situation that many projects were allocated with capital plans much larger than their capacity. Thus, at the end of year, the projects have not disbursed all the assigned plans and capital must be cut or transferred to the next year.
The problems related to the implementation of the plan are considered as a depression for many years due to common causes, such as: slow completion of approval procedures, project adjustments, technical design, estimates; inadequacies in bidding; slow site clearance; slow settlement of completed projects and slow settlement of contracts, thus the assigned capital plans were unable to be disbursed. A major problem for implementation of current public investment projects is site clearance. In provinces and cities, site clearance is difficult and slow due to issues related to determination of compensation price.
Recognizing the impact as well as the problems in the slow disbursement of public investment, all authorities from central to local levels have given drastic directions.
Recently, the official telex of the Prime Minister has directed all levels and sectors to accelerate the progress to complete the capital disbursement plan in 2019. The solution proposed by the Prime Minister is withdrawing capital for projects which are unable to allocate and disburse until September 30.
Regarding this issue, Le Tuan Anh, Deputy Director of the Department of Investment, Ministry of Finance said, according to the report, at the end of August, only VND35 trillion was assigned by the National Assembly but was not disbursed for ineligibility, based on the update of the Ministry of Planning and Investment, by September 30, an official report will be submitted to the Prime Minister.
In addition, the Prime Minister has drastically directed to solve problems in site clearance and procedural completion. All these solutions have been mentioned many times in the past but the implementation results remained poor.
“About the Ministry of Finance, we have been very active to accelerate the disbursement of public investment. Every two months, the Ministry has sent dispatches to the ministries and localities to urge and remind them to complete investment procedures, capital allocation and Tabmis update. The Ministry also held an online seminar with investors, ministries and sectors to discuss and solve problems and actively reported to the Prime Minister and proposed solutions, including the solutions that the Prime Minister put into directing the implementation," said Tuan Anh.
In a proposal to the Prime Minister, the Ministry of Finance introduced a series of solutions to promote the disbursement of public investment. In particular, the Ministry of Finance requests ministries, sectors and localities to formulate regulations requiring investors and project management units to regularly report to their superior agencies on the disbursement progress of each project; to develop solutions to solve problems and adjust plans in accordance with the disbursement progress. Accordingly, ministries, sectors and localities shall report to the Ministry of Planning and Investment and the Ministry of Finance to sum up and report to the competent authorities to adjust the plan in a timely fashion.
In addition, to handle the remaining plans in the remaining months of the year, the Ministry of Finance requests ministries, sectors and localities to soon report on the list of projects with disbursement rates of below 50 percent and introduce the plan of reduction and transfer.
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In the future, the Prime Minister will also host a national online conference to promote the disbursement of public investment. Hopefully, units with slow disbursement rate will be pointed out and capital will be transferred from projects with slow disbursement to projects with demand and quick disbursement.
By Hong Van/ Huyen Trang