Disbursement of ODA funds has reached a very low rate, what solutions can 'accelerate' it?

VCN - VCN- Although the Government, ministries, and local authorities have been proactive from the beginning of the year, by the end of May 2024, the disbursement results of public investment funds sourced from abroad by ministries and localities still reached very low rates. This is a significant obstacle to achieving the goal of disbursing 95% of the foreign-sourced public investment funds that the Government set out at the beginning of the year.
Measures sought to tap Vietnam - China - Russia intermodal rail transport route Measures sought to tap Vietnam - China - Russia intermodal rail transport route
Gov’t determined to hasten ODA, concessional loan disbursement: Deputy PM Gov’t determined to hasten ODA, concessional loan disbursement: Deputy PM
Disbursement of ODA funds has reached a very low rate, what solutions can 'accelerate' it?
There are many reasons why the disbursement of ODA funds by ministries and local authorities has reached very low rates. Illustration: Vietnam+

Many projects are delayed due to bottlenecks in equipment price appraisal.

Following the Government's directive to consider the implementation and disbursement of ODA funds and concessional loans as one of the key political tasks of 2024, ministries and local authorities have implemented many decisive measures to direct the disbursement process. These measures include urging investors to register monthly disbursement plans; reviewing and consolidating steering committees to assign ministry leaders to directly address emerging difficulties and obstacles, and to expedite the implementation and disbursement of projects.

The Ministry of Finance has also implemented a variety of solutions to support the disbursement process, such as organizing meetings with delegations from two ministries (the Ministry of Transport and the Ministry of Agriculture and Rural Development) and three localities (Thanh Hoa, Hue, and Dak Lak) and project owners to promptly acknowledge obstacles and recommend solutions within their authority; directing the reduction of time taken to perform expenditure control and process withdrawal applications, etc. However, the result of foreign capital disbursement in the first five months of 2024 (as of May 15, 2024) by ministries and localities remains very low.

Sharing information about the project implementation and the reasons why the Ministry of Labor, Invalids, and Social Affairs (MOLISA) has not yet disbursed the 2024 capital plan, Ms. Doan Thanh Phuong (Department of Planning and Finance, MOLISA) stated that the main issue is the equipment price appraisal, as the appraisal units have refused to appraise the prices, leading to all three sub-projects being unable to proceed with the bidding packages. This price appraisal issue has been ongoing since 2022, and the Ministry has submitted several reports on this matter since 2023.

A representative from the Ministry of Education and Training (MOET), which has a disbursement rate of 0% in the first five months of 2024, stated that in 2024, MOET was allocated 629 billion VND for the project to build technical infrastructure and facilities for Da Nang University. The main obstacle preventing disbursement in 2023 and causing delays into 2024 was related to collateral and the signing of the re-lending contract. Currently, the biggest hurdle for the project is the estimation appraisal, as finding appraisal agencies and getting quotations is very challenging. To accelerate progress, the MOET representative suggested that the Ministry of Construction assist Da Nang University in quickly appraising 6 out of the remaining 13 construction items to proceed with the next steps and expressed the goal to have disbursement volumes by September 2024.

There needs to be a detailed and specific review and assessment of the disbursement capability of each project.

According to Mr. Vo Huu Hien, Deputy Director General of the Department of Debt Management and External Finance (Ministry of Finance), the main reasons for the very low disbursement rate primarily stem from the lack of completed work to disburse funds due to delays in preparatory tasks for investment. These include slow land clearance, incomplete signing of design consulting contracts, delays in bidding processes, contract signing, adjustments to basic designs, projects undergoing procedures for investment policy adjustments, project adjustments, loan agreement adjustments, and capital planning not aligning with the project implementation progress. This reality indicates that the goal of disbursing 95% as set by the Government in Resolution No. 01/NQ-CP is very difficult to achieve.

To strive for a high disbursement rate for ODA and concessional loans as assigned by the Prime Minister for 2024, the Ministry of Finance suggests that the Ministry of Planning and Investment (MPI) should support localities in accelerating the progress and procedures in extending the time for capital allocation to avoid affecting the project's disbursement progress. Additionally, clearer guidance should be provided to localities on the authority to approve project adjustments for projects implemented across multiple agencies.

In addition, local authorities need to conduct a detailed and specific review and assessment of the disbursement capability of each project, particularly paying attention to projects whose planning year is the final disbursement year to ensure sufficient funds for the projects and avoid the need for disbursement extensions, implementation time extensions, and additional administrative procedures. For projects that are unable to complete the planned workload on schedule, funds should be cut or transferred, and a written proposal for cutting, reducing, or reallocating funds should be sent to the Ministry of Planning and Investment (MPI) and the Ministry of Finance by June 30, 2024, for coordination. For programs or projects requiring investment policy adjustments, local authorities need to report and closely coordinate with MPI to submit the adjustment proposals to the Prime Minister for approval. Based on the Prime Minister's approval and decisions on investment policy adjustments, local authorities will coordinate with the Ministry of Finance to adjust the disbursement deadlines and reallocate funds according to the signed loan agreements (if any).

For projects with obstacles in the preparation and implementation phases, local authorities and project management units are responsible for promptly completing investment and construction procedures, resettlement and land clearance to implement the projects; finalizing technical designs, resolving difficulties in contract bidding; and quickly addressing any issues arising in each stage of project implementation. Central project management units of ODA projects under the supervision of ministries and agencies should provide guidance and training on expertise and capacity building for local project management units to ensure the projects are implemented uniformly and effectively.

By Thu Hien/Phuong Linh

Related News

The textile market recovered, businesses accelerated

The textile market recovered, businesses accelerated

VCN - Although the Government, ministries, and local branches have actively participated from the beginning of the year, by the end of May 2024, the disbursement results of public investment funds sourced from abroad by ministries and localities still reached very low rates. This is a significant obstacle to achieving the goal of disbursing 95% of the foreign-sourced public investment funds that the Government set out at the beginning of the year.
How does the Land Development Fund work effectively?

How does the Land Development Fund work effectively?

VCN - Speaking at the Conference to collect opinions on the draft Government Decree regulating the Land Development Fund held by the Ministry of Finance on April 22, Deputy Minister of Finance Bui Van Khang emphasized the necessity of the development of the Government Decree regulating the Land Development Fund.
Be concerned about hindering cooperation when limiting deposits at people

Be concerned about hindering cooperation when limiting deposits at people's credit fund

VCN - The Vietnam Cooperative Union said that the regulation that the total amount of deposits not exceeding 20 times the equity causes many difficulties, hindering the demand for cooperation, capital contribution, and idle capital mobilization from the people of the people's credit fund.
Supplement regulations on lending activities: Credit barriers or tighter risk control?

Supplement regulations on lending activities: Credit barriers or tighter risk control?

VCN - At the end of June, the State Bank of Vietnam (SBV) issued Circular No. 06/2023/TT-NHNN (Circular 06), amending and supplementing some provisions of Circular 39/2016/TT-NHNN dated December 30, 2016, which regulates lending activities of credit institutions (CIs) for customers. With the additional provisions on certain capital needs that CIs are not allowed to lend to, there are concerns that it may create "credit barriers" for the lending stream.

Latest News

Review the tax payment of sales livestream individuals

Review the tax payment of sales livestream individuals

VCN - The General Department of Taxation has just issued an official letter directing local tax departments to drastically manage e-commerce taxes and electronic invoices generated from cash registers.
13 cases subject to direct tax registration with Tax authority

13 cases subject to direct tax registration with Tax authority

VCN – The Ministry of Finance collects comments on a draft Circular guiding tax registration to replace Circular 105/2020/TT-BTC. According to the draft, if the National Population Database
Ministry of Finance: Focusing on improving independent audits

Ministry of Finance: Focusing on improving independent audits

VCN - According to Minister of Finance Ho Duc Phoc, in recent times, the Ministry of Finance has focused on improving the quality of independent audits through training, inspection, and examination.
Digitizing the process, banks actively lend online

Digitizing the process, banks actively lend online

VCN - Many banks promote online lending to save time and costs for both parties and creating conditions to promote credit growth.

More News

The finance sector

The finance sector's firm stance on combating tax evasion in e-commerce

VCN - Addressing and clarifying some opinions raised by National Assembly deputies during the questioning session on issues related to the commerce and industry sectors on the afternoon of June 4, Minister of Finance Ho Duc Phoc stated that in the coming period, the finance sector would rigorously enforce tax collection on e-commerce to ensure fairness in the fulfillment of taxpayers' obligations.
Total State revenue managed by Tax sector is estimated at VND767,415 billion

Total State revenue managed by Tax sector is estimated at VND767,415 billion

VCN – The total state revenue in the first five months of 2024 managed by the Tax authority is estimated at VND 767,415 billion, meeting 51.6% of the target and 114.9% year-on-year.
Tax sector cooperate with Police agency to prevent fraud of tax invoice

Tax sector cooperate with Police agency to prevent fraud of tax invoice

VCN - Over the years, the acts of law violation on electronic tax invoices took place complicatedly with many different tricks. To prevent fraud, the tax sector has applied several drastic measures, including strengthening cooperation with the Police agency.
Over 4.49 billion USD raised through G-bond auctions in five months

Over 4.49 billion USD raised through G-bond auctions in five months

The State Treasury mobilised more than 127 trillion VND (4.49 billion USD) from G-bond auctions on the Hanoi Stock Exchange (HNX), or 31.76% of the annual plan.
Five-month budget revenue reached half of the whole year 2024 revenue estimate

Five-month budget revenue reached half of the whole year 2024 revenue estimate

VCN - According to the Ministry of Finance, in May 2024, total state budget revenue is estimated to reach VND150.9 trillion. In the first five months of 2024, total budget revenue is estimated to reach VND898.4 trillion, equal to 52.8 percent of the estimate.
Bank savings of individual customers recover while institutional savings decline

Bank savings of individual customers recover while institutional savings decline

Deposits of individual customers at banks have increased again since February this year, after declining in January, the latest statistics from the State Bank of Vietnam (SBV) showed.
Foreign investors

Foreign investors' net selling exceeds 2.3 billion USD since 2023

Foreign investors have net sold Vietnamese stocks on HoSE with a value of 58 trillion VND (over 2.3 billion USD) since the beginning of 2023, indicating a prevailing trend of net selling in the Vietnamese stock market.
Five-month public investment disbursement reaches nearly 27% of target

Five-month public investment disbursement reaches nearly 27% of target

The disbursement of public investment from the State budget in the first five months of this year was estimated to reach 190.6 trillion VND (7.44 billion USD), equal to 26.6% of the yearly target and 5% higher than the same period last year, according to the General Statistics Office (GSO).
Credit growth quota policy needs to ensure safety of banking system

Credit growth quota policy needs to ensure safety of banking system

The State Bank of Vietnam (SBV) this year removed the credit growth quota for foreign banks, but the policy remains for Vietnamese banks, due to concerns about rising bad debts, the security of the banking system and macroeconomic instability.
Read More

Your care

Latest Most read
Review the tax payment of sales livestream individuals

Review the tax payment of sales livestream individuals

The General Department of Taxation has just issued an official letter directing local tax departments to drastically manage e-commerce taxes and electronic invoices generated from cash registers.
13 cases subject to direct tax registration with Tax authority

13 cases subject to direct tax registration with Tax authority

VCN - Notably, Article 4 of the draft Circular stipulates that taxpayers subject to direct tax registration with tax authorities include: taxpayers subject to tax registration through the interconnected single-window mechanism; Taxpayers subject to direct
Ministry of Finance: Focusing on improving independent audits

Ministry of Finance: Focusing on improving independent audits

According to Minister of Finance Ho Duc Phoc, in recent times, the Ministry of Finance has focused on improving the quality of independent audits through training, inspection, and examination.
Digitizing the process, banks actively lend online

Digitizing the process, banks actively lend online

VCN - Many banks promote online lending to save time and costs for both parties and creating conditions to promote credit growth.
The finance sector

The finance sector's firm stance on combating tax evasion in e-commerce

Minister of Finance Ho Duc Phoc stated that in the coming period, the finance sector would rigorously enforce tax collection on e-commerce to ensure fairness in the fulfillment of taxpayers' obligations.
Mobile Version