State Treasury: Resolving bottlenecks to accelerate the progress of public investment capital disbursement

The State treasury system has launched many solutions to accelerate the progress of public investment capital disbursement, ensuring investment efficiency.

The obstacles in site clearance work are "barriers" for the disbursement of many projects using public investment capital. Photo: Thùy Linh

Pressure from site clearance and price increase

According to a State Treasury report, the accumulated payment of public investment capital in the 2022 plan from the beginning of the year to the end of May 2022 is estimated at VND116,672.9 billion, equal to 22.5% of the plan in 2022 assigned by the National Assembly, Prime Minister and the Government.

Although this figure is higher than the same period in 2021 by VND104.2 trillion, it still puts great pressure on the disbursement of public investment capital this year. The reason is that, besides the medium-term planned capital, the Ministries, sectors and localities also have to perform the disbursement following the program of socio-economic recovery and development.

As of the beginning of June 2022, the whole of Bac Ninh disbursed VND1,360 billion, reaching 27.6% of the assigned capital plan. Compared to the total investment capital of Bac Ninh province in 2022 (over VND6,890.8 billion), the amount of capital that needs to be disbursed from now until the end of the year is still relatively large.

The disbursement rate is still modest, while the price of construction materials is skyrocketing, especially the price of steel, land, and construction sand, which has increased sharply compared to the approved estimate, along with the obstacles in site clearance work which is a "barrier" for the disbursement of Bac Ninh province. In addition, a number of new construction projects in the province are in the process of completing investment procedures, and designing construction drawings, causing more pressure on the disbursement plan of Bac Ninh province.

In Hai Phong, according to a report from the Ministry of Finance, by the end of May 2022, the locality has disbursed over VND3,231.4 billion, reaching 17.8% of the plan. This is a low rate compared to the same period in 2021 and previous years of Hai Phong.

The main reasons are still problems in the site clearance stage. Facing the above situation, Hai Phong City People's Committee is asking departments, sectors and districts to focus on speeding up the implementation of site clearance work as well as strictly implementing regulations on bidding to select investors that have sufficient capacity and responsibility.

At the same time, reviewing and transferring capital plans between projects with slow disbursement to projects with good disbursement progress and lacking capital; reviewing the collective responsibility of the head and related individuals in case of failure to complete the plan and schedule for disbursement of public investment capital.

Besides the localities that are having difficulties in disbursement, there are still "bright spots" thanks to effective methods.

According to the Ministry of Finance, by the end of May 2022, the disbursement rate of public investment capital in 2022 of Thai Binh province reached 38.6%. Currently, Thai Binh is on the list of leading localities in the country in terms of high disbursement rates.

According to Thai Binh State Treasury, the reason why this locality is always at the top of the country in terms of high disbursement rate is that the province has promptly grasped the bottlenecks and provided solutions to remove them. The biggest bottleneck affecting the disbursement progress of public investment is the site clearance work.

The Permanent Board of Thai Binh Provincial Party Committee has issued a directive requesting departments, agencies and sectors to strengthen leadership and direct the implementation of site clearance to serve the implementation of investment projects in the locality. Then after receiving the handover of ground at difficult sections and routes, the construction units must focus on mobilizing machinery, and vehicles and working overtime to speed up construction progress to help complete the projects soon. Hence, the project will be put into use to serve the socio-economic development of the locality. Thai Binh State Treasury also urges investors and project management to complete the capital payment procedures and documents as soon as the completed volume is sent to the treasury for capital payment; preparing capital for timely payment.

Promote “pay first, control later”

As a capital control and payment agency, the State Treasury system has launched many solutions to speed up disbursement and ensure investment efficiency. In March 2022, the State Treasury issued the process of controlling and paying for projects using public investment capital through the State Treasury system. Accordingly, the State Treasury applies the method of "pay first, control later" for contractual payments and makes payments in installments until the disbursement value reaches 80% of the contract value.

Until the disbursed value reaches 80% of the contract value, it will switch to the form of "control first, pay later" until the contract value is fully paid.

Since the beginning of the year, Treasury units have held dialogues with investors and project management boards (investors) to remove difficulties and obstacles, contributing to speeding up the disbursement of public investment capital.

In order to fulfill the goals and tasks of the 2022 public investment plan, Thai Binh province is continuing to strictly implement the regulations on the ratio of funding allocation between the payment of capital construction debt and the investment of urgent and essential projects in the locality.

In addition, the Provincial People's Committee also required departments, agencies and sectors to improve the responsibility of the leader and take responsibility for the Chairman of the Provincial People's Committee when they do not ensure the disbursement rate following each specific milestone.

In addition, Thai Binh province continues to implement periodic and irregular meetings to promptly handle difficulties and obstacles in the implementation of key investment projects in the local area.

Meanwhile in Hai Phong, as an agency to control and pay for public investment capital, Mr. Ngo Hai Truong, Deputy Director of Hai Phong State Treasury, said that the unit was continuing to strengthen coordination with relevant departments and agencies and investors to grasp the practical implementation of each project and each bidding package.

In addition, the Hai Phong State Treasury has requested the State Treasury units under the State Treasury to strictly control expenditures to ensure the timely disbursement of public investment capital in accordance with regulations, ensuring the principle of "payment first, control later" for contracts that are installment payments.