Disbursement of public investment capital: positively move but difficulties remain

Accumulation of capital for payment of Long Thanh International Airport's land acquisition, compensation, support and resettlement project by the end of October 2020 reached 20.4% of the assigned plan. Photo: S.T

Difficulties continue to arise

According to statistics of the Ministry of Finance, the disbursement rate in the past 10 months (including planned capital of the previous years which was moved to 2020) is estimated at 60.37% of the assigned capital plan (equivalent to more than VND 379,515 billion). For the plan of the previous years transferred to 2020, the accumulated disbursement in 10 months is estimated at about 63.38% of the plan. For the capital plan in 2020, the disbursement rate for 10 months is estimated at 68.26% of the plan assigned by the Prime Minister at the beginning of the year (54.69% higher than the same period in 2019). According to the Ministry of Finance, there are 13 ministries, central authorities and 21 localities with disbursement rate by the end of October 2020 reaching over 70%. In particular, there are eight ministries, central authorities and seven localities with disbursement rates exceeding 80% such as: Vietnam Cooperative Alliance (100%); Bank for Social Policies (95.55%), Mausoleum Management Ho Chi Minh (94.26%); Hung Yen (94.44%), Quang Ninh (90.22%), Thai Binh (87.8%) and Thai Nguyen (86.21%). Besides that, there are 18 ministries, central authorities and six localities that still have disbursement rates below 45%, of that eight ministries, central authorities and one locality (Dong Nai) with disbursement rates below 20%.

Looking at the above figures, it can be seen that the Government, the Ministry of Finance, ministries, sectors and localities have focused all their efforts and the disbursement situation has had many positive changes. In early October, the Ministry of Finance held a conference on the disbursement of public investment capital from foreign loans of the Government in the first nine months of 2020 with ministries and sectors. At the conference, the Ministry of Finance evaluated the disbursement situation to now, the specific problems of each ministry, sector and locality in the implementation of projects using foreign capital and solutions to accelerate disbursement of this capital source in the final months of 2020.

At the same time, implementing Government Resolution No. 84/NQ-CP and the Prime Minister's instructions at online conferences, ministries and localities have issued documents and spoken to investors to urge them to speed up the disbursement of public investment capital in 2020. In particular, requesting investors update disbursement progress monthly, promptly reporting problems and difficulties in the disbursement of investment capital and propose remedial measures; timely reviewing progress to propose the capital plan operating. On that basis, several ministries, sectors and localities have reviewed and adjusted in line with the competence of the 2020 investment capital plan among projects within the unit to speed up the disbursement of projects.

However, slow is slow! Besides reasons already pointed out by the Ministry of Finance in previous months such as the Covid-19 pandemic, stormy weather in central provinces greatly affected the construction progress of projects, especially traffic and irrigation projects; some projects with foreign capital disbursed slowly due to the management and supervision mechanism of the donors and some new reasons have arisen.

In Dong Nai - the unit with the lowest disbursement rate at present, a report of the provincial People's Committee showed that it was having difficulties in project implementation. Specifically, the shape of the land parcel, there is a land parcel that has measurement figures between the application dossier for the land use rights certificate and the current is inconsistency, the land parcel area after measurement increases or decreases. In other cases, the boundary of the land is in use, so the unit conducting measurement lacked the basis to export technical records of the land. Besides, there are many land parcels do not have information on the name of the owner, or have name but not address.

Also in the locality, Thanh Hoa and Binh Duong have not prioritised allocating capital for site clearance or accumulating disbursed capital at the end of the year so it is slow. Binh Duong, HCM City, Dong Nai and Tay Ninh have not coordinated well with each other in implementing joint projects, so progress cannot be guaranteed. Bac Kan allocated foreign capital too slowly, and lacks a mechanism to transfer on-lending loans in 2019 to 2020, so it cannot disburse. Quang Nam and Gia Lai are waiting to adjust the project of fast and sustainable poverty reduction.

At the central level, several major ministries have encountered problems in implementing planning projects of the sector, leading to delays such as the Ministry of Construction, the Ministry of Natural Resources and Environment. The Ministry of Information and Communications is "stuck" because some projects were prolonged for their time for appraisal of construction drawing design documents, fire prevention and fighting, affecting contractor selection plans and contract performance. The Supreme People's Procuracy has to await cost estimates to be re-approved because labour costs are adjusted.

Efforts to shorten time and procedures

The finance sector has made great efforts for the past time to clear the flow of public investment capital. Tran Thi Hue, Deputy Director General of the State Treasury, said the State Treasury reported to the Ministry of Finance to complete the process and procedures to control payment commitments and control State budget expenditures (including public investment expenditure) through the State Treasury for simplicity, clarity and transparency in dossiers, documents and control contents; clearly defining the responsibilities and powers of the agency or unit; step-by-step shifting from pre-check, post-payment to prepay, and post-control; initially control spending by risk. Currently, the process of controlling public investment capital spending is withdrawn from seven days to only 1-3 days.

Regarding foreign loans, according to Truong Hung Long - Director of the Debt Management and External Finance Department, the Ministry of Finance has cut the processing time for valid withdrawal applications within just one or two working days compared with current regulations for capital withdrawal applications not eligible for settlement yet, the Ministry of Finance sent an official dispatch to immediately return to the project owner to complete, ensuring compliance with legal regulations on budget spending and compliance with loan agreements. By the end of September, the Ministry of Finance had received 560 withdrawal documents, including 554 dossiers were resolved, accounting for 98.8%. The Ministry of Finance has returned six dossiers and requested it be finalised soon.

According to Long, through monitoring and evaluating disbursement and working with ministries and project owners, the Ministry of Finance noticed disbursement results of projects using ODA and preferential loans remained low due to a lack of disbursement volume. For the proposed capital plan of 2020 to be cut or transferred, the units clearly defined which projects to cut, which projects cannot disburse and which projects can only partially disburse to supplement the capital plan for 2021. Ministries and sectors worked with donors and localities to promptly remove difficulties and obstacles in project implementation.

For the side of the Ministry of Finance, the representative of the Debt Management and External Finance Department made a commitment to continue to consider the disbursement of public investment capital from ODA and preferential loans a key task and to work with in charge authorities to solve matters related to negotiation, signing, completion of procedures for the validity of the loan agreement, amending the loan agreement (if any), signing the on-lending contract, reviewing and speeding up the disbursement and discuss with donors issues that arise during disbursement.

Regarding solutions, in the latest report to the Government, the Ministry of Finance proposed the Government direct ministries, sectors and localities to continue evaluating the disbursement capacity of each project by the end of 2020, making internal adjustment of projects under the State budget capital investment plan in 2020, from projects with slow progress transferred to projects with good disbursement progress, having the need for supplementary capital to speed up implementation, completed soon and put into use. At the same time, the Ministry of Finance requested central and local agencies to strictly comply with the regime of periodic reporting on the disbursement of public investment capital from the State budget.