Accelerating disbursement of public investment capital. Photo: Thuy Linh

Status of “capital waits for projects completing the procedures" remains

In 2022, the total planned public investment capital from the state budget is VND626,148.5 billion (including capital allocated by the Prime Minister and balanced capital from the local budget). This is considered an important engine for economic recovery, so the Government, ministries and agencies are urging the disbursement of this capital.

However, by the end of the second quarter of 2022, the newly disbursed public investment capital reached 27.75%, a slight decrease compared to the same period in 2021 (over 29%). In which, domestic capital reached 29.06% and foreign capital reached 8.61%.

According to reports from ministries, central and local agencies, the slow disbursement was caused by various reasons in association with each type of project such as: new construction projects allocated with state budget capital in 2022 in process of completing procedures for contractor selection and approval of bidding plans; projects on equipment procurement according to year-end payment contracts; and transitional projects are under construction and need a new completed volume for disbursement.

Notably, another reason causing the slow disbursement for projects is the site clearance compensation. In addition, the planning of state budget investment is not close to the implementation capacity, leading to the failure in capital allocation. There is still the status of "capital waits for projects completing the procedures", the capital is expected first, then enterprises carry out investment procedures or procedures for extending agreements, prolonging capital allocation for projects funded by ODA and concessional loans from foreign donors.

However, according to the Ministry of Finance, after six Government working groups held meetings with some ministries, central and local agencies to inspect, urge and remove difficulties to speed up disbursement of public investment capital in 2022, disbursement has improved. Ministries, central and local agencies have established their own working groups to review difficulties and obstacles in projects in 2022.

In localities, the Chairman of the Provincial People's Committee assigned vice chairmen to monitor large and key projects in their provinces to regularly review, inspect and urge the project implementation process; proactively transfer capital from projects with slow disbursement to projects with good disbursement progress and lacking capital.

Strengthen responsibilities of the head

2022 is an important year, creating a foundation to realize the goals of the medium-term public investment plan for the 2021-2025 period. Public investment continues to be an engine for growth engine and an important source of capital for the country’s development investment country, especially investment in infrastructure development.

In order for the high disbursement rate of public investment capital in 2022, as well as in the following years, the Ministry of Finance and the Ministry of Planning and Investment are proposing the Government to issue regulations to improve discipline, compliance with approved strategies, master plans and plans. In particular, it is necessary to develop sanctions for ministries, central and local agencies that fail to allocate all the assigned plans according to the time prescribed in the Law on Public Investment, the Law on State Budget (before the 31st of December of the year plan), return the plan in the year to overcome the situation that the planning is not close to the implementation capacity.

The Ministry of Planning and Investment has proposed to promulgate regulations on prior actions allowed for public investment projects, especially investment preparation capital arrangement of research. If projects are not feasible, enterprises are allowed to make accounting for legal costs and the site clearance.

At the same time, the ministry has proposed to soon amend provisions in the Laws related to public investment such as the Law on Land; Law on State Budget; Construction law; the Law on Minerals to ensure the consistency and transparency of the legal system - a prerequisite to conveniently implement public investment projects.

Notably, the Ministry of Finance has proposed ministries, central and local agencies to further strengthen the roles and responsibilities of the head. The heads of ministries, central and local agencies must directly guide and remove difficulties and obstacles related to land and natural resources; review and transfer investment capital plans between projects with slow disbursement and projects with good disbursement and lacking capital; and are responsible for accountability of disbursement results as well as investment efficiency of assigned projects.

Moreover, the heads of ministries, central and local agencies must directly handle difficulties and problems of assigned projects which are being implemented but have been suspended by problems, and report to the Prime Minister and send to the Ministry of Finance and the Ministry of Planning and Investment the handling results.