Accelerating public investment in national key transportation projects

Construction at the Khanh Hoa - Buon Ma Thuot Expressway Project site. Illustration photo: S.T

Complex investment procedures with multiple stages

As reported by the Ministry of Finance, by the end of October 2024, a total of VND 52.999 trillion had been disbursed for nine key national transportation projects, reaching 52.3% of the 2024 plan (set at over VND 101.340 trillion).

This includes VND 49.145 trillion from the central budget, representing a 62% disbursement rate; VND 3.853 trillion from local budgets, with a disbursement rate of 17.5%.

Several projects achieved high disbursement rates as follow: the North-South Expressway (East), phase 2017-2020 reached 49.1%; the North-South Expressway (East), phase 2021-2025 achieved 70.5%; the Khanh Hoa-Buon Ma Thuot Expressway, phase 1 reached 68.3%.

However, some projects, such as the Long Thanh International Airport, have seen little to no disbursement.

The report from the Ministry of Transport (MOT) highlights challenges that could hinder project progress if not resolved promptly. Key issues include land clearance and compensation which are delays in approving compensation plans, issues with compensation rates, and slow progress in relocating high-voltage power lines and building resettlement areas.

Regarding material supplies, provinces such as Tien Giang, Ben Tre, and Vinh Long have yet to issue mining permits for contractors in accordance with the Prime Minister’s directive to complete licensing by August 30, 2024. This delay has affected construction progress in the Mekong Delta region. Some mines have insufficient reserves, while others with large reserves face limited licensing capacity.

Moreover, local authorities' published construction material prices often deviate from market rates, complicating cost estimation and project implementation. Additionally, incomplete and delayed publication of price indices hinders contract price adjustments.

At a public investment forum in late October 2024, Nguyen Anh Dung, Deputy Director of the Planning and Investment Department at the MOT, identified procedural complexities as a major challenge. “The investment process involves multiple stages, especially concerning forest, agricultural, and rice land conversion. These steps, along with issues related to compensation, resettlement, and relocating infrastructure, pose significant risks to project progress and disbursement,” Dung stated.

Reforms to overcome obstacles

However, Nguyen Anh Dung emphasized that with a strong determination to ensure timely allocation of funds to projects—creating "arteries" of trade to drive economic growth—the Ministry of Transport has prioritized enhancing the role and responsibility of leaders in directing and managing operations. The ministry has also accelerated the completion of basic construction procedures, expedited project implementation, and streamlined processes for acceptance, payment, and settlement of projects in strict compliance with regulations.

The MOT is implementing a range of solutions to meet its 2024 disbursement targets as follow:

Strengthening discipline and accountability in public investment disbursement. The performance of project leaders will be tied to their units' disbursement outcomes and considered a key performance metric.

Project owners and management boards are required to regularly review detailed disbursement plans for each project and take responsibility for progress.

Contractors and investors have been instructed to concentrate resources and capitalize on favorable weather conditions to accelerate construction.

Strengthening coordination with local authorities and related agencies to expedite land clearance, resettlement, infrastructure relocation, and material sourcing.

On the financial front, Duong Ba Duc, Director of the Investment Department at the Ministry of Finance, stressed the importance of decisive action by ministries, sectors, and localities. This includes close collaboration with the State Treasury to identify and resolve implementation bottlenecks, whether in policy mechanisms or organizational structures.

Mr. Duc also highlighted the need for legislative reforms in public investment laws to align with practical demands, promote decentralization, and enhance administrative efficiency.