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Quality of public investment is affected

As of January 31, 2024, the amount of overdue advances from the state budget of ministries, central and local agencies is still relatively large, about 7,454 billion VND (of which, ministries and central agencies are about 1,279 billion VND, localities are about 6,175 billion VND), reducing the efficiency of using state budget capital.

According to the provisions of Decree No. 99/2021/ND-CP dated November 11, 2021 of the Government on management, payment and settlement of projects using public investment capital, the principle of capital advance is: The investor and the contractor agree on the level of capital advance (according to regulations, not exceeding 30% of the contract value, except in cases where a higher advance is required, it must be approved by a competent person), the time of advance, the recovery level and the time of recovery of each advance must be specifically stated in the contract, in accordance with the project investment progress, the contract implementation progress and the implementation volume each year. However, according to many assessments, in actual implementation, there are still some shortcomings leading to advances lasting for many years, slow recovery of advanced capital, affecting the quality and efficiency of using public investment capital.

Directive No. 20 stated that in recent years, the state management of advance payment of investment capital from the state budget has been gradually strengthened, with relatively strict regulations, but there are still cases where investors and management agencies have not paid due attention, leading to the existence of long-term advance payments that have not been recovered.

Previously, in June 2023, Resolution No. 91/2023/QH15 of the National Assembly on the 2021 state budget settlement assigned the Government to strictly manage expenditures transferred from the state budget and thoroughly handle cases of advance payments that have exceeded the prescribed deadline for many years. Therefore, the Prime Minister's Directive requested ministries, central and local agencies, based on current legal provisions, to strengthen strict and effective management of advance payments in accordance with regulations; Conduct periodic and unscheduled inspections to rectify and resolve problems, etc.

In particular, the Ministry of Finance is responsible for periodically (every 6 months and every year) urging ministries, central and local agencies to take measures to recover overdue advance capital for projects managed by ministries, central and local agencies according to regulations; at the same time, directing the State Treasury to coordinate with investors to inspect the amount of advanced capital to recover unused or improperly used backlogs; inspect the advance balance to ensure the recovery of all advanced capital according to regulations in Clause 6, Article 10 of Decree No. 99.

Classify contracts to prioritize processing and recovery of advances

Previously, the Ministry of Finance requested ministries, branches and localities to direct investors and project management boards to manage and recover advances from public investment capital contracts in accordance with regulations and instructions of the Government. Mr. Duong Ba Duc, Director of the Investment Department (Ministry of Finance) said that the Ministry of Finance has requested leaders of units to request investors to classify contracts with overdue advances and report specific overdue periods to prioritize processing and recovery of advances. Specifically, for projects that are being implemented and have completed volumes, the Ministry of Finance requests investors to promptly accept the volumes, complete payment procedures to work with the State Treasury to recover all overdue advances. For overdue advances that have not been recovered by localities, the Ministry of Finance requests the People's Committees of provinces and cities to direct the Department of Finance to coordinate with the provincial State Treasury; directing the People's Committees at lower levels to request financial agencies to coordinate with the State Treasury to review the overdue advance capital, report to the People's Committees at the same level to take measures to recover all overdue advance capital.

On the part of the State Treasury, this unit has also implemented many solutions. The State Treasury said it would continue to urge the recovery of advance capital, recover unused or improperly used backlogs according to regulations; prepare reports assessing the advance situation and recovering advance capital of ministries, central and local agencies to send to financial agencies at the same level and propose handling measures. Implementing the above instructions, many localities have also deployed and directed the recovery of overdue advance capital. For example, on July 19, 2024, the People's Committee of Nghe An province issued an official dispatch assigning the Department of Finance to preside over and coordinate with departments, branches, sectors, units and investors, and construction investment project management boards, basing on the direction of the Prime Minister in Directive No. 20 to proactively organize and implement; at the same time, advise the Provincial People's Committee to implement according to regulations.

Similarly, on July 23, 2024, the People's Committee of Quang Binh province issued an official dispatch requesting investors and project management boards to strictly comply with current regulations on capital advances; review the content of capital advances in signed and implemented contracts to ensure compliance with legal regulations; strictly and effectively manage and use advanced capital for the right purposes and subjects according to the contract, etc. At the same time, direct the Finance agency to coordinate with the control and payment agency to review overdue advanced capital, periodically report to take measures to recover capital.

According to the report of the State Treasury of Quang Binh province, as of June 30, 2024, the total balance of advances managed by the locality was more than VND 2,180 billion, of which overdue advances and difficult-to-recover advances accounted for 3.58% of the total balance of advances.

The People's Committee of Vinh Phuc province has also requested investors to review the collective and individual responsibilities in allowing overdue advances to arise; request strict handling of the responsibilities of related organizations and individuals, and synthesize and report to the Provincial People's Committee on the implementation results (through the Department of Finance). As well as assigning the Provincial State Treasury to preside over and coordinate to review all projects with overdue advances and promote recovery measures for overdue advances related to contractors, etc.