Shortcomings in site clearance are "barriers" in many projects using public investment capital. Photo: Thuy Linh.

Pressure from site clearance and price increase

According to a report from the State Treasury, the accumulated payment of public investment capital in the 2022 plan between January and May is estimated at VND116,672.9 billion, or 22.5% of the plan set by the National Assembly Prime Minister.

Although this figure is VND104.2 trillion higher than the same period in 2021, it still puts great pressure on the disbursement of public investment capital this year as ministries, agencies and localities also have to perform the disbursement task under the program of socio-economic recovery and development.

As of begining of June, Bac Ninh province disbursed VND1,360 billion, meeting 27.6% of the capital plan. The total capital that must be disbursed from current date to the end of the year is still high compared with the total amount of VND6,890 billion.

This rate is still low despite the price of contruction materials surging. The rise in price of steel, construction land and sand compared with the estimate and the shortcomings in site clearance are a "barrier" causing the difficulties in the disbursement of Bac Ninh province.

In addition, new construction projects in the province have gone through process of completing investment procedures, designing construction drawings and estimate which is causing pressure to the the disbursement plan of Bac Ninh province .

According to the Ministry of Fiance, by the end of May, Hai Phong disbursed over VND 3,231.4 billion, meeting 17.8% of the plan. The fingure shows a low disbursement rate compared with last and previous years, due to the difficulties in site clearance.

Hai Phong City People's Committee has requested departments, local governement, and districts to focus on accelating the site clearance and strictly comply with regulations on bidding to select investors; review and transfer capital plans between projects with slow disbursement to projects with good disbursement progress but lack of capital; review the responsibility of collective, the head and relevant individuals failing to complete the plan and schedule for disbursement of public investment capital.

Besides the localities that are facing difficulty in disbursement, some provinces have effectively performed the disbursement. For example, by the end of May, the disbursement rate of Thai Binh province reached 38.6% , said the Ministry of Finance.

Currently, the province is one of the top localities with high disbursement rate. According to the local State Treasury, the province has grasped shortcomings and provided effective solutions for handling them.

The biggest bottleneck affecting the disbursement progress of public investment is the site clearance work at the projects. The local government has requested local departments, and agencies to strengthen the site clearance for the implementation of projects.

After receiving the handover of clean ground, the construction units focused on mobilizing machinery and vehicles to speed up the construction progress to complete the projects and put into use to serve the local socio-economic development. The local State Treasury suggests investors and project management boards to complete the capital payment procedures and documents as soon as the completed contruction to send to the treasury for capital payment; and arranges capital for timely payments.

Promoting method of “pay first, control later”

The State Treasury system has implemented solutions to expedite disbursement progress to ensure investment efficiency. In March, the State Treasury issued the process of controlling and paying for projects using public investment capital, via the State Treasury system.

The State Treasury applies the method of "pay first, control later" for contractual payments and make payments in installments until the disbursement value reaches 80% of the contract value. When the disbursement value meets 80% of the contract value, it will shift to the method of paying first, control later until the contract value is fully paid.

The Treasury units have held dialogues with investors and project management boards to remove difficulties and obstacles to contribute to speeding up the disbursement of public capital.

In order to fulfill the goals of the public investment plan 2022, Thai Binh province has complied with regulations on the rate of capital allocation between the payment of construction debt and the investment of urgent and essential works in the locality.

The Provincial People's Committee requires local departments and agencies to raise the responsibility of the head and to be accountable to the Chairman of the Provincial People's Committee for failing to meet the disbursement rate. The province implements periodic and irregular meetings to promptly handle difficulties and obstacles in the implementation of key investment projects.

Mr. Ngo Hai Truong, Deputy Director of Hai Phong State Treasury said that the authority strengthens coordination with relevant departments and agencies and investors, and grasps the practical implementation of each projectt and bidding package.

The Hai Phong State Treasury requested its subordinate units to closely control expenditures to ensure the timely disbursement of public investment capital, ensuring the principle of " pay first, control later” for multi-payment contracts.