Disbursement of investment capital: Need initiative

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Disbursement rate for Da Nang - Quang Ngai highway project reaches 3.6 percent of the plan Photo: S.T.

The disbursement rate reaches 41.5 percent

According to the latest data from the State Treasury, the disbursed investment capital under the 2019 plan as of August 31, 2019 through the State Treasury was VND153,817.7 billion, reaching 41.5 percent of the plan. Specifically, capital disbursed by the Government was VND152.7 trillion dong, reaching 41.5 percent of the plan. Of which, capital construction was VND124.4 trillion dong (reaching 42.3 percent of the plan); Government bond capital was VND8,298 billion (reaching 23.7 percent of the plan); the target program and the national target program was VND20,000 (reaching 51.6 percent of the plan). Besides, the remaining revenue for disbursement was VND1,033 billion VND (reaching 38 percent of the plan assigned to the State Treasury).

According to the State Treasury, from the beginning of the year, the State Treasury system has implemented the control of investment capital spending, ensuring payment control in accordance with the list of projects and annual capital plans assigned by competent authorities and the medium-term public investment plan described in the Law on Public Investment; promptly handled difficulties and problems or summarised and reported to competent authorities for consideration and handling. At the same time, synchronously deploying many solutions to contribute to speeding up the disbursement of investment capital in 2019 according to the Prime Minister's Directive No. 09 / CT-TTg, Notice No. 179 / TB-VPCP May 8, 2019 of the Government Office on the conclusions of Deputy Prime Minister Vuong Dinh Hue at the meeting on solutions to promote the public investment disbursement plan in 2019 and Resolutions of the Government's regular meetings.

Particularly for ODA projects and preferential loans, the provincial and municipal State Treasuries worked with the project owners to boost the implementation progress, control certification and urge investors to propose accounting revenues and expenditures when all the procedures have been completed; ensuring timely accounting into the state budget.

According to the information from localities, the disbursement progress of investment capital in many municipal and provincial state treasuries was good. In Hai Duong State Treasury, as of the end of September 2019, over VND2,806 billion has been disbursed, reaching 65.86 percent of the total assigned capital. This is a high disbursement rate compared to the current national rate.

To gain this result, Hai Duong State Treasury has continuously urged investors in the province. As soon as the capital plan is issued, the State Treasury notified the investors and project management boards to speed up the construction progress and promptly accepted completed works to send the dossier to the State Treasury to complete payment procedures.

Also, Hai Duong State Treasury actively discussed and instructed investors to fulfil the procedures as prescribed. Therefore, the dossiers sent to the Treasury has been standardized, accepted and handled by the Treasury the same day, the capital was disbursed quickly.

Hai Phong State Treasury is also a unit with a high disbursement rate of investment capital. By the end of September 15, 2019, Hai Phong State Treasury disbursed public investment capital in 2019 of over VND5,230 billion, equal to 66 percent of the plan assigned the central Government.

In addition, Hai Phong State Treasury has strengthened the management and inspection of operational processes in spending control to promptly urge and reorganise units; strengthened discipline in the control of state budget spending. At the same time, requesting public servants in charge of spending control not to cause trouble and harass budget-using units and not leave any outstanding payment dossiers at the State Treasury without specific reasons. Along with that, the control of investment capital spending must ensure payment control in accordance with the list of projects and capital plans assigned by competent authorities.

In addition to units with high disbursement rates, some localities still have a low disbursement rate of investment capital through the State Treasury. For example, in Hoa Binh State Treasury, as of September 23, 2019, public investment capital disbursed through Hoa Binh State Treasury reached only 29 percent of the assigned plan. This is because project investors and management boards are facing problems in the design, construction and inadequacies in site clearance. Therefore, Hoa Binh State Treasury has requested investors work with competent agencies and local authorities where the projects are implemented to remove problems in compensation for site clearance, creating conditions for contractors to have the most favourable construction site.

Site clearance still a problem

Regarding the reason for the slow disbursement in the first nine months of 2019, the State Treasury said that the first reason is slow assignment of capital allocation plans. As of August 31, 2019, more than VND35,682 billion has been allocated by the National Assembly but not yet assigned by the competent authorities; of which VND31,182 billion has not been allocated to the plan in 2019 due to ineligibility.

As for new construction projects, after receiving capital plans, the investors are bidding to select design contractors or finalize procedures for approval of design estimates or making compensation plans for site clearance or the investors have not selected contractors for construction and installation packages, so there is no volume to disburse. Some projects are in the implementation stage, so must adjust designs and investment, leading to incomplete procedures for payment.

Remarkably, up to now, site clearance is still a problem in the disbursement of investment capital. Site clearance is still difficult and slow in provinces and cities (such as Ho Chi Minh City, Ha Tinh, Nghe An). Typically, the Mekong Delta Transport Infrastructure Development Project (WB5) has not yet disbursed via the State Treasury; the Lo Te - Rach Soi road project has disbursed only 1.5 percent of the plan; the site clearance sub-project of Quang Nam section of Da Nang-Quang Ngai Expressway Project has disbursed 3.6 percent of the plan. This is a big bottleneck for the implementation of public investment projects.

Particularly for Government bond capital, the projects funded by Government bond capital in 2019 are mostly new construction projects, so after being assigned the capital plan, the investors begin to prepare procedures for site clearance and organise bidding. For the ODA projects, some projects such as the urban railway projects in Hanoi and Ho Chi Minh City are in the process of completing procedures to adjust the project and capital. The capital allocation and the adjustment of public investment plan are slow. Many projects have been adjusted; the disbursement is expired, so the investors must apply for project extension.

Need initiative

To speed up the disbursement of public investment capital in 2019, the State Treasury requests the provincial and municipal State Treasuries to urge investors within four working days from the date of acceptance to make payment procedures immediately with the State Treasury and not accrue the completed volume for payment at the end of the year.

The provincial and municipal State Treasuries must also be responsible for urging investors to strictly comply with the provisions on the recovery of deposit capital and coordinate with investors in inspecting the deposit capital to recover outstanding and unused amounts or used amounts for incorrect purposes. At the same time, strictly complying with the regulations on publicising the process, records and time of payment control; guiding and facilitating investors performing transactions at the State Treasury. Acts of harassments, trouble, and difficulties to investors in the process of investment capital disbursement are strictly forbidden. The State Treasury will seriously review the responsibilities and take disciplinary against individuals who intentionally commit violations, causing delays in the disbursement of public investment capital.

The State Treasury must also check, confirm, report promptly and properly on the disbursement of capital construction investment for the projects, serving the management of investors and the direction and adjustment of project's capital plan and accounting according to the annual budget of the Government and the Ministry of Finance. Strictly implementing the publicity of disbursement of public investment capital of units and ensuring adequate payment sources for public investment projects.