Removing public investment bottlenecks

A section of the Bien Hoa – Vung Tau expressway under construction. Photo: Quang Hai – Viet Dung

Many projects are still behind schedule

The Ministry of Transport (MOT) is one of the units that disbursed public investment capital well in the first half of this year. At the recent Vietnam Economic Forum 2024 on public investment, Mr. Le Bach Cuong, Head of the Southern Construction Investment Management Department under the Department of Construction Investment Management - Ministry of Transport, said that by July 2024, the transport sector had disbursed more than 30,000 billion VND, reaching about 50% of the plan.

With the momentum of maintaining the acceleration of project progress in the last months of the year, along with the addition of more than 13,000 billion VND of domestic budget capital, it is estimated that this year, the Ministry of Transport can disburse about 74,680 billion VND, equal to 119% of the initial capital plan.

To have the disbursement volume, the leaders of the Ministry of Transport regularly inspect the site, directly manage, resolutely and promptly remove difficulties; direct investors, consultants, contractors to mobilize maximum human resources, equipment, financial resources, overtime, and construction shifts to speed up progress; promptly report to the Prime Minister and Government leaders for instructions on removal, especially in the work of site clearance and construction material sources for projects in the southern provinces.

However, besides the positive signals, the disbursement rate of important national projects and key projects in the transport sector is still low, reaching only 27.4% (as of June 13); inter-regional transport projects managed by localities also only reached 17.2%. Some projects assigned large capital plans in 2024 but have low disbursement rates such as: Ring Road 3 Project - Ho Chi Minh City; Ring Road 4 Construction Investment Project - Hanoi Capital Region; Bien Hoa - Vung Tau Expressway; Dong Dang - Tra Linh Expressway...

Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People's Committee, said that in 2024, Ho Chi Minh City was assigned a public investment capital plan of VND 79,263 billion, but so far only VND 11,511 billion has been disbursed, reaching 14.5%, lower than the national average and only reaching half of the city's target.

Considering the causes, there are some specific factors such as the 2024 capital plan has 28,000 billion VND for new projects. Meanwhile, the first 6 months of 2024 are still in the project preparation stage, so there has not been time to disburse. In addition, there is 22,000 billion VND for site clearance capital, localities are waiting for the 2024 Land Law to take effect to apply, with many more favorable policies for organizations and individuals...

Similarly, explaining the reasons for low public investment disbursement, Mr. Le Ngoc Linh, Director of the Department of Planning and Investment of Ba Ria - Vung Tau province, said that there are difficulties and problems in compensation, site clearance, difficulties in completing investment procedures and related to the project implementation process. Specifically, up to now, the province still has 62 projects that have not completed site clearance compensation, some projects are stuck in relation to national defense land and forest land.

Resolving the paradox of “having money but not being able to spend it”

According to economic expert Tran Du Lich, public investment is one of the three pillars that promote economic growth, along with consumption and export. Good investment and disbursement of public investment will stimulate the total national growth exponentially, the sooner the money flow is put into the market, the sooner it will spread and the higher the efficiency. Public investment is in all fields.

However, currently, public investment capital is focused on transportation projects, while other fields have not been invested synchronously. In addition, in public investment, there is a situation of "having money but not being able to spend it". This is a very big problem, it is impossible to maintain this situation, while the problem of capital shortage is still happening. This situation is like a business with money in the bank but borrowing at a higher interest rate will only go bankrupt. The same goes for public investment.

In the first 6 months of 2024, the disbursement rate of public investment capital nationwide only reached 29.39% of the requirement. In Ho Chi Minh City and the provinces in the Southeast region - considered the most dynamic economic region, public investment disbursement is also facing difficulties, the implementation rate is still low. Therefore, to achieve the goal of being able to disburse 90-95% of the proposed capital from now until the end of the year, it will be necessary to synchronously implement many effective solutions.

Looking more broadly at the bottlenecks of public investment, Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), said that there are currently problems related to the planning mechanism, approval, bidding and operation methods. At the same time, there is a lack of coordination between functional agencies and investors. Public investment projects have excess funds but are stuck due to procedural mechanisms, processes, and procedures, and require synchronous solutions. Agencies and sectors need to boldly change their approaches. Public investment projects need to be socialized to solve bottlenecks. All procedures and approvals are for the private sector to do, and after completion, only acceptance is needed. This could be a smoother and faster approach.

In addition, according to Mr. Vu Xuan Nguyen, Head of the Planning and Contract Department of the Ho Chi Minh City Urban Railway Management Board, the implementation of metro lines 1 and 2 shows that clean land and ready capital are two lessons learned to disburse and complete the project. In particular, the site clearance stage needs to be resolved from the beginning, avoiding prolongation, causing additional costs and affecting the overall progress of the project. Regarding capital, it is necessary to proactively reduce dependence on ODA (official development assistance) by mobilizing domestic resources through the TOD model - an urban development model with a focus on public transport.