Regulations revised to accelerate payment of public investment projects

	Proposing ministries and sectors urgently deploy projects that have been allocated capital, ensuring disbursement progress of investment capital
	Disbursement of public investment: Key to growth in 2020
	Disbursement of public investment capital delayed by Covid-19 epidemic

The management, payment and settlement of completed projects still hasmany shortcomings and problems. Photo: Thuy Linh.

Inadequacies in finalisation of completed projects

According to the Ministry of Finance, many regulations on simplifying payment procedures, records and specifying responsibilities between investors and payment agencies in controlling investment capital payment have been issued

To accelerate payment of investment capital, many regulations on reforming administrative procedures and shortening time for transferring capital plans have been issued. The process and mode of payment control are changed, shortened, creating conditions for investors and contractors formore flexible payment and speeding up the disbursement of public investment capital.

However, current management, payment and settlement of completed projects still face many problems. The Ministry of Finance pointed out some issues: There are no specific regulations so there is no strict legal basis for the management and payment of capital plans; the scope of all projects using public investment has not been covered yet.

Moreover, management of advance capital and recovery of advance capital under contracts for State budget capital is not serious, there is no specific sanctions, the advance rate under contracts is too high (more than50%), leading to a very large advance balance at the State Treasury.

In term of finalisation of completed projects, the management of State and non-State capital sources is differentfrom the competence on deciding on investment projects and ways on managing project investment costs. Therefore, the current regime guiding the finalisation for subjects using State capital in public investment has certain gaps, which need to be overcome in legal documents in a form higher than the circular.

The slow finalisation of completed project has delayed disbursement of the assigned public investment plan of ministries, agencies and localities. The Ministry of Finance has to always urge investors and project management boards to quickly carry out projects and to promptly settle and pay capital to the State Treasury when items are completed.

Slow disbursement progress in some projects due to incompletion of acceptance, handover and settlement of completed projects have been reported to Prime Minister Nguyen Xuan Phuc by the Ministry of Finance such as the project connecting the centre of the Mekong Delta, Cat Linh - Ha Dong urban railway project andHo Chi Minh road project, running through Chu Se district.

Each stage specified

Based on the actual situation, in the draft decree on the management, payment and settlement of projects using public investment capital, the Ministry of Finance proposes regulations on finalisation of completed projects for each stage.

Toclearly identify the principle of investment costs subject to finalisation, the principle of finalization of completed projects, sub-projects, works and completed independent work items. The preparation of the finalisation report of completed projects must be specified.

At the same time, the verification of the finalization of completed projects and the approval of the finalization of completed projects are clearly specified from the verification agency, the principles and methods of verification, competence to approve completed projects. The draft decree clearly stipulates the regime of report, inspection and handling of violations and rights and responsibilities of organizations and individuals in the finalization of completed projects.

To speed up payment of investment capital, reform administrative procedures and shorten the time to transfer the capital plan, the Ministry of Finance has removed the written transition from the central State Treasury to the local State treasuries where projects open accounts for use as a basis for the payment of investment capital. Instead, the capital plan will be directlyupdatedto theTreasury and Budget Management Information System (TAMIS) and sent to the local state treasuries.

In terms of the payment control process, regulations have changed the mode of payment control from pre-control and post-payment into pre-payment and post-control; and cutpayment time from seven tofour working days fromthe date of receiving complete payment documents. The addition of the provisions of "prepayment, and post-control" for each payment and "pre-controland post - payment" for the final payment of the contract has allowed investors and contractors to be more flexible in payment, and accelerate implementation and disbursement of public investment plans.