HCM City: Focus on disbursing public investment capital

VCN – Despite speeding up disbursement of investment capital 3 or 4 times in the last months of 2021, due to the influence of the Covid-19 pandemic, the capital disbursement in Ho Chi Minh City dell 22% year-on-year. In 2022, HCM City will focus on capital disbursement, ensuring a rate of over 95%.
Slow disbursement of public investment capital, difficult to stimulate economic demand Slow disbursement of public investment capital, difficult to stimulate economic demand
Reigns tightening on disbursement of public investment capital Reigns tightening on disbursement of public investment capital
Working day and night to accelerate disbursement of public investment capital in 2021 Working day and night to accelerate disbursement of public investment capital in 2021
Metro trains have been imported for Ben Thanh - Suoi Tien Line Illustration: T.H
Metro trains have been imported for Ben Thanh - Suoi Tien Line. Illustration: T.H

The People's Committee of HCM City said, after the social distancing period, in the fourth quarter of 2021, projects began to operate normally and the investment capital was estimated at VND123,153 billion, 3 - 4 times higher than the third quarter. Because of the Covid-19 pandemic which has affected the labor force, the price of materials increased, the total investment capital in the city in 2021 is estimated at VND344,829 billion, down 22% year-on-year.

According to Mr. Nguyen Hoang Hai, Director of HCM City State Treasury, from the beginning of 2021, HCM City State Treasury has implemented the assigned public investment capital plan; controlled payments; monitored the estimate and closely coordinated with the Finance agency to promptly handle the discrepancy between the document and the system.

Procedures for controlling payment of public investment capital through HCM City State Treasury are simple and fast, creating favorable conditions for investors to quickly access capital.

Along with that, the State Treasury regularly reviews the distribution rate, sends documents to urge investors to expedite disbursement and review the advance balance, and notify investors of strict compliance with regulations on advance payment. Thus, the State Treasury has recovered VND804.3 billion.

In 2021, the pandemic significantly affected the distribution rate of public investment capital in HCM City. After the social distancing from October 2021, the city implemented many measures to speed up disbursement in public investment projects. In which, the disbursed capital construction investment in 2021, by the end of January 31, 2022, is estimated at VND25,248 billion from the local budget and more than VND5,311 billion from the Central budget, reaching 76.2% of the capital plan and down 0.8% in disbursed value year-on-year.

According to HCM City State Treasury, the decrease in the distribution rate is mainly due to the surge in the price of construction materials at the beginning of the year and the outbreak of the Covid-19 pandemic in Ho Chi Minh City from May 2021.

Therefore, due to both working and implementing 5K measures (in Vietnamese) Khau trang (facemask)- (Khu khuan) disinfection- (Khoang cach) distance- (Khong tu tap) no gathering – (Khai bao y te), the progress of projects was slower than in previous years, besides, many projects faced a labor shortage. The completed volume of projects is not high, mainly focusing on bridge and road projects.

In 2021, HCM City State Treasury advised and submitted to the People's Committee of HCM City to consider and solve problems related to the handling of advances from the state budget for Thu Thiem New Urban Area; worked with the Department of Planning and Investment and the Department of Finance to advise and propose the City People's Committee on solutions for problems related to the management of public investment capital plans on a monthly, quarterly and annual basis; mechanisms to support projects and data entry of estimates on the electronic system.

Capital disbursement is ensured at over 95%

At the meeting of the People's Council of Ho Chi Minh City for the 2021-2026 term at the end of 2021, HCM City approved a Resolution on the public investment plan in 2022, which agreed on the proposed plan on central capital allocating to the city of more than VND2,479 billion in 2022 and adopted the public investment plan in 2022 with the state budget capital of VND42,500 billion.

In which, the public investment from the city's budget deficit in 2022 is more than VND9,900 billion; and the public investment capital from the city budget is more than VND32,500 billion.

Regarding the detailed allocation of the total capital, HCM City People's Council approved capital of more than VND29,464 billion. In which, for public investment capital from the city’s budget deficit for ODA-funded projects re-borrowing foreign loans from the Government with a total capital of VND5,450 billion. Public investment capital is balanced from the City budget is VND24,013 billion.

In addition, the People's Committee also reserves more than VND3,043 billion for the 2022 public investment plan to continue to add capital for public investment programs and projects approved by the People's Council in the city’s medium-term public investment plan for the 2021-2025 period.

To ensure capital disbursement, the People's Council of HCM City assigns the People's Committee of HCM City to be responsible for the accuracy and authentication of data and the amount of capital allocated for each project in compliance with the laws on public investment, state budget and other relevant laws and developing solutions to support investors to remove difficulties to speed up project implementation and disbursement of assigned capital, ensuring a rate of 95%.

Four key groups of solutions for Ho Chi Minh City to bounce back Four key groups of solutions for Ho Chi Minh City to bounce back

Before allocating capital for each specific project, the People's Committee directs relevant departments and agencies to review the project's legality to ensure that it is eligible to receive the 2022 public investment plan and not to allocate capital higher than the total investment of the project and higher than the approved medium-term public investment capital plan for the 2021 - 2025 period.

By Le Thu/ Huyen Trang

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