Accelerating the disbursement of investment capital

	The State Treasury: Disbursement of capital construction investment reaches a high rate
	100% of public investment disbursement will not be reached as planned.
	State budget disbursement reaches nearly 83% of the plan

Some projects which started from 2016 to now have not completed the construction investment procedures, causing late disbursement. Photo: Hong Van

30.6% of planned capital disbursed

According to the National Assembly’s Resolution, the total expenditures for development investment in 2017 were 357,150 trillion vnd, including state budget capital was 307,150 billion vnd and Government bond capital was 50,000 billion vnd.

Reports on socio-economic situation in May and in the first five months in 2017 from the General Statistics Office showed that the investment capital from state budget reached 88.8 trillion vnd. This capital increased 6% compared to same period in 2016, but only accounted for 30.6% of the year capital plan. The capital managed by the State reached 19.5 trillion vnd, up by 5.9 over the same period in 2016, equivalent to 29% of the year capital plan.

Although some ministries had an increase in disbursed capital such as Ministry of Transportation (reaching 11,355 billion vnd, up 55.4%), Ministry of Health (reaching 1,280 billion vnd, up 23.4% against the same period last year), the capital disbursement was still behind the plan. Besides, disbursed capital of other ministries such as Ministry of Agriculture and Rural Development, Ministry of Construction, Ministry of Culture – Sport and Tourism, Ministry of Environment and Natural Resource, Ministry of Industry and Trade, Ministry of Science and Technology and Ministry of Information and Communication decreased compared to 2016. Similarly, capital managed by local authorities reached 69.3 trillion vnd, up by 6.1% over the same period in 2016, equivalent to 31.1% of the year plan.

According to the General Statistics Office, in May, 2017, investors and construction organizations accelerated the implementation of works and projects and state budget capital more highly than the previous month and same period last year. However, this Office also stated that the disbursement and implementation of this capital source in the first five months were slow.

The Ministry of Finance acknowledged that if the reasons for slow capital disbursement in 2016 were mainly confusion in implementing the Law on Public Investment, in 2017 obstacles and difficulties arising during the implementation of the plan.

Some ministries and sectors and local authorities have not updated or updated a part of allocated capital to the Treasury and Budget Management Information System (TABMIS), so estimates were not made for payment (such as Ministry of Education and Training and Ministry of Transportation)

Besides, some projects which started from 2016 to now have not completed the construction investment procedures (construction license, assessment on design approval, estimates and procurement procedures) such as Vietnam Academy of Science and Technology.

In April, 2017, some ministries, sectors and local authorities have been preparing procurement procedures, selecting contractors for new tender packages so that the volume has not been available for payment

Also, implementation of the requirement on saving 10% of the total investment of each project according to Resolution No. 89 / NQ-CP of Government periodical session in September, 2016 made ministries and sectors review and adjust the estimates, affecting the bidding, so there has been not volume for implementation. Some projects have volume but have been behind the acceptance stage or have not been accepted by investors and completed capital payment procedures.

The Ministry of Finance also frankly pointed that besides above objective reasons, some investors still focused on gathering large volume, then came to State Treasury to carry out capital payment procedures or obstacles in site clearance and resettlement.

Though the Prime Minister issued a decision on allocation plan of investment capital from state budget in 2017 (first period) very soon (from the end of 2016), the progress of capital disbursement of ministries, sectors and local authorities in the first four months in 2017 was slower than required, affecting the growth, employment and wasting investment capital and reducing effectiveness of Government Bond capital mobilization.

Many measures to accelerate the capital disbursement

The slow disbursement will directly affect the growth. In previous years, the investment capital disbursement from state budget was used to be slow in the first months, but accelerated in the end of the year, causing unbalance in the implementation of economic objectives. 2016 was a special year with many new Laws (revised Law on Investment, revised Law on Construction), causing the late disbursement, only reaching more than 33% in the first five months, thereby, the Government had to establish a working group to direct the implementation, so that the disbursement was improved.

Thus, from the end of 2016, the Government paid attention to the state capital disbursement for 2017. Recently, the Deputy Prime Minister Vuong Dinh Hue has requested that ministries and agencies complete the allocation of the capital plan for mid-term 2016-2020. Accordingly, the Ministry of Planning and Investment chaired and collaborated with the Ministry of Finance to submit the Prime Minister the capital plan for 2017 (second period), capital and list of projects to be permitted to prolong the time of planned investment capital disbursement in 2016 into 2017, and extend the time of disbursement of investment capital from state budget in 2015 which are still need to be used.

Deputy Prime Minister Vuong Dinh Hue also assigned ministries and sectors to review, amend and supplement the law provisions relating to investment and business. The Ministry of Planning and Investment finalized the Prime Minister's Directive on accelerating implementing and disbursing public investment capital in 2017; researched and proposed that the Prime Minister should permit the promulgation of a Government’s Resolution on this issue; and closely and promptly guided, urged and removed difficulties for ministries, sectors and local authorities in the disbursement of public investment capital in 2017.

The Ministry of Finance shall be responsible for reviewing guiding documents on control of expenditures and disbursement plan of investment capital from state budget and government bond in simple way and in accordance with the law and reporting to the Prime Minister on cases beyond its competence; and quarterly and monthly updating the situation and reporting it to the Prime Minister, and also submitting it to the Ministry of Planning and Investment.

The Ministry of Construction issued documents to guide the implementation of Decree No. 42/2017/ND-CP on amending Decree No. 59/2015/ND-CP on managing construction investment; enhancing to urge and remove difficulties in making, evaluating construction projects, estimating the construction and establishing specialized management boards, area management boards, and construction investment boards.

The Ministry of Natural Resource and Environment hosted and collaborated with Ministries: Justice, Planning and Investment, Finance and Transportation to review regulations on assessing the impacts to the environment of basic construction investment projects in line with the reality and propose to amend unnecessary regulations and drastically and promptly implement investment projects against time prolongation.

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To push the capital disbursement from now to the end of the year according to its functions and tasks, the Ministry of Finance also proposed that the Prime Minister assigns ministries and state agencies and local agencies to direct investors to actively implement the plan, complete the procedures of acceptance and capital payment and review obstacles in the investment capital implementation and payment to handle in a timely fashion. The Ministry of Finance should report on the cases beyond its competence to the Prime Minister for consideration and decision.