According to statistics, the disbursement rate of public investment capital from foreign loans in September increased by 3.14%, reaching more than VND 4,315 billion. To achieve target of disbursement of public investment capital from foreign loans as committed, from now to the end of the year, ministries and sectors still need to make great efforts.

The inspection of time and determination of foreign capital by the State Treasury
must be not more than three working days. Photo: Thuy Linh

10 ministries and sectors commit to complete disbursement 

In the first nine months of 2020, ministries and sectors have focused on disbursing the estimate of 2019 and the capital is extended, transferred, worth VND 2,671 billion.

Notably, the Ministry of Finance recorded that 10 of 12 ministries and sectors have committed to completing disbursement after revising down a partial or whole capital plan, including: Ministry of Education and Training, Ministry of Transport, Ministry of Health, Ministry of Industry and Trade, Ministry of Science and Technology, Ministry of National Defence, Ministry of Agriculture and Rural Development, Ministry of Natural Resources and Environment, Ministry of Culture, Sports and Tourism.

Dinh Minh Tung- Deputy Director of the Financial Planning Department, Ministry of Education and Training said as of September 30, the ministry’s disbursement rate reached 39% of the assigned capital plan, up by 18% compared to the rate up to August. Thus, the Ministry of Education and Training was the top ministry with the highest disbursement progress in September. Tung said the result is thanks to the drastic direction of the ministry’s leaders. In addition, the ministry has consolidated the working group to promote disbursement, at the same time assigned its leaders to take charge of some project groups to promptly remove difficulties and problems for some projects, so the disbursement rate has increased higher than in the previous month.

Nguyen Anh Dung- Deputy Director of Financial Planning Department under the Ministry of Transport, said that over the past time, the ministry has directed the project management board to work with localities to hasten site clearance and quickly deploy bidding for projects to accelerate disbursement in the final months of the year.

Other ministries sectors such as the Ministry of Health, the Ministry of Natural Resources and Environment and the Ministry of Defence also said that they have applied solutions to accelerate disbursement.

Comment soon to remove problem 

Although the disbursement rate in September was more positive than August, generally, the disbursement rate of projects using ODA capital and foreign concessional loans was low due to the lack of disbursement volume.

According to Hoang Hai- Deputy Director of the Department of Debt Management and External Finance, this issue stems from when projects have not completed domestic investment procedures, such as the completion of site clearance, contract approval and slow implementation of bidding, including suing during the bidding process of some projects. In addition, the project preparation process is prolonged, investment preparation is not thorough, and other objective factors lead to changes in design nad project adjustment in the implementation process, such as the extension of deadline of implementation and disbursement. Meanwhile, the procedures for adjusting investment policy decisions and adjusting loan agreements are delayed so there is no legal basis for disbursement.

Cao Manh Cuong-Deputy Director of Foreign Economic Relations Department under the Ministry of Planning and Investment was quite concerned about disbursement results from now to the end of the year. Cuong that although the ministries and sectors committed to completing disbursement, the actual disbursement data in the past time has not significantly improved. The disbursement rate has increased but due to that the capital plan has been cut rather than real changes.

One problem raised by many ministries and sectors is the time limit to control the capital withdrawal application is too long, causing slowdown. According to Hoang Hai, the Ministry of Finance has shortened the processing time for valid capital withdrawal applications within one to two working days compared to current regulations. For the capital withdrawal applications that are not eligible for settlement, the Ministry of Finance has sent an official dispatch to return them to the project owner to complete, ensure compliance with the law on budget expenditure and regulations of the loan agreement. By the end of September, the Ministry of Finance had received 560 applications of capital withdrawal, of which 554 applications were resolved, accounting for 98.8%. The Ministry of Finance has returned six applications and required to be completed soon.

Nguyen Viet Hong-Deputy General Director of the State Treasury said that the inspection of time and determination of foreign capital by the State Treasury must be not more than three working days. However, this is only one step in the process of disbursing the public investment capital from the foreign loan because after the State Treasury has confirmed the capital, there are steps such as signing the withdrawal application, the donors transfer capital to disburse.

To promote disbursement of public investment capital from foreign loans, in a recent report to the Prime Minister, the Ministry of Finance continued to propose ministries and sectors to seriously implement the Prime Minister's directions. For problems or unclear policies, ministries and sectors should soon consult relevant agencies to study, amend and supplement.

For capital plans in 2020 that have applied for cuts or transferred to other ministries and localities, the Ministry of Finance suggests ministries and sectors specify which projects are to be cut, which projects cannot be fully disbursed in 2020 and which projects are only partially disbursed to add the capital plan for those projects into the investment plan 2021. Thereby, ensuring funds to implement projects according to time and progress committed to the donors in the foreign loan agreements.

If the 2020 capital plan proposed for the reduction of ministries has not yet been allocated for projects due to poor planning, ministries and sectors can learn from experience when building plans for 2021 and the following years. Ministries and sectors should focus on resolving completely; coordinate with donors and concerned agencies and localities to remove difficulties and problems, especially large investment projects and projects that are nearly expired disbursement.

Truong Hung Long - Director of Department of Debt Management and External Finance:

The Ministry of Finance commits to continue to consider disbursement of public investment capital from ODA loans and concessional foreign loans as the key task of the year and to coordinate with the governing body in matters related to negotiations and signing. At the same time, complete the effective procedures of the loan agreement, adjust the loan agreement (if any); sign re-lending contracts, review and accelerate progress of disbursement and discuss with donors problems arising in the disbursement process.