Facing difficulties in disbursement, nine ministries and government agencies returned more than VND8 trillion. This is one of the remarkable figures delivered by the Ministry of Finance at a conference on assessing public investment disbursement of foreign capital in the first nine months of 2021, held on October 7.

Conference on assessing the public investment disbursement of
foreign capital in the first nine months of 2021. 

VND3,166 billion disbursed

The Ministry of Finance said identifying the importance of public investment disbursement as well as difficulties and challenges of the Covid-19 pandemic, the ministry has drastically implemented many solutions to boost the disbursement of official development assistance (ODA) capital, such as urging the import of disbursement date into the Treasury and Budget Management Information System (TABMIS), submitting legal documents related to ODA capital such as Decree 79/2021/ND-CP dated August 16, 2021 amending and supplementing a number of articles of Decree 97/2018/ND-CP on ODA on-lending, Circular 48/2021TT-BTC dated June 28, 2021 guiding report forms of disbursement of ODA and concessional loans.

“In August and September 2021 when many provinces and cities implemented social distancing, the Ministry of Finance actively worked online and discussed with all project owners of 13 ministries and government agencies that are assigned foreign capital plans to review and urge disbursement, and worked with them to solve difficulties and problems hampering disbursement under responsibility of the ministry,” said Mr. Truong Hung Long, Director of the Department of Debt Management and External Finance, Ministry of Finance.

The Ministry of Finance requested to shorten the time for spending and processing capital withdrawal applications if complete documents are submitted. As of October 6, 2021, the Ministry received 620 applications. All withdrawal applications were processed promptly, while incomplete applications were guided and processed.

Mr. Truong Hung Long, Director of the Department of Debt Management and
External Finance (Ministry of Finance) spoke at the Conference

Despite the drastic implementation of many solutions, as of October 6, 2021, the ODA disbursement under the 2021 capital plan only reached 19.03% (VND3,166 billion).

“This figure is more than twice the ODA disbursement rate reported at the conference in June 2021, but it much lower than the results of previous years," said Truong Hung Long.

As of October 6, 2021, the ministry received nine applications from ministries and government agencies for returning VND8,054 billion, accounting for about 44.08% of the capital plan assigned by the Prime Minister.

This capital may be transferred to ministries and government agencies that have disbursement rates beyond the plan or be forced to cancel the capital plan according to regulations. According to the Ministry of Finance, it is not feasible to complete the disbursement rate under the capital plan in 2021 of above 95% of the assigned plan as the target of Resolution 63/NQ-CP.

Covid-19 pandemic has a great impact on ODA disbursement

At the conference, representatives of ministries and government agencies reported on the disbursement situation, reasons for slow disbursement, and proposed solutions to speed up this work. They all said that the Covid-19 pandemic had severely impacted the implementation progress of most projects.

According to a representative of the Ministry of Transport, in 2021, the ministry is assigned a capital plan of VND4,837 billion. By the end of September 2021, the ministry disbursed VND2,391 billion, or 49.43% of the capital plan.

The Covid-19 pandemic has made it difficult to communicate with sponsors and prevent foreign design consultants from entering Vietnam, affecting the implementation of bidding documents. The Ministry of Transport proposed to return VND589 billion of foreign loans assigned in 2021.

According to the Ministry of Finance, there are three major reasons for slow disbursement of ODA. They are the Covid-19 pandemic that has severely affected the progress of most ODA projects; slow progress or lack of volume for disbursement due to problems during project implementation such as delay in site clearance, resettlement, basic design, delay in bidding and contract signing; projects that are in the process of carrying out procedures for adjusting investment policies, investment decisions, and adjusting loan agreements with contents such as extension of implementation time, disbursement time, use of residual capital, adjustment of investor, foreign/local currency payment ratio, cost adjustment between items.

In addition, the assignment of capital plans is not effective and many ministries and agencies have failed to detail capital plans, leading to the cancelation of estimates.