While the disbursement of official development assistance (ODA) has seen progress, without drastic solutions, it will be difficult for ministries and sectors to achieve allocation targets, Deputy Minister of Finance Tran Xuan Ha has said.

Hoa Binh 3 Bridge, with construction using ODA funding,
in northern Hoa Binh province was put into use in February 2020. 

He told a meeting in Hanoi on August 26 that VND3.742 trillion (nearly US$161.5 million) in ODA funding had been disbursed as of the end of August, or 21.64% of this year’s target, and higher than the disbursement in the same period last year yet still lower than the disbursement of domestic public capital, which currently stands at 40%.

Among ministries, the Ministry of Transport posted the best performance in ODA disbursement, at about 51% as of the end of August. It acknowledged, however, that disbursement still falls short of expectations.

It blamed the slowness partly on the impact of COVID-19, which has been an obstacle to foreign experts coming to the country and also affected the bidding process, as well as the prolonged handling of adjustments to certain projects.

The Ministry of Agriculture and Rural Development said that since the beginning of the year, it has requested subordinate units make disbursement commitments for each month and quarter.

However, it noted, the coronavirus outbreak has affected the bidding process. Also, most agricultural projects are small and scattered over different localities, which are slow to provide reciprocal capital, to the detriment of project implementation.

Another official at the event pointed out that projects funded via ODA or foreign preferential loans are suffering more from the pandemic compared to those using domestic funds, because they must satisfy lenders’ requirements such as using imported equipment or foreign experts, contractors, and advisers.

Apart from disbursing assigned capital for 2020, ministries and sectors also have to work on funds they didn’t finish allocating last year, adding more to their workload, he added.

To speed up ODA and foreign capital disbursement, the Ministry of Finance has asked other ministries and sectors to consider completing their public investment allocation targets as an important political task.

Deputy Minister Ha called for coordination among them to thoroughly deal with the obstacles, adding that his ministry will discuss problems arising during disbursement with lenders.