Disbursement of foreign loans reaches 45% of adjusted plan

	Disbursement of public investment capital: positively move but difficulties remain
	Raise responsibility of head in capital disbursement
	Improving efficiency of loan use associated with debt repayment liability

The Conference with ministries and agencies on the disbursement of the Government’s foreign loans in the first eleven months of 2020. H. Anh

Disbursed ODA was VND 6,312 billion

Speaking at the opening of the conference, Deputy Minister of Finance Tran Xuan Ha said that since the beginning of the year, the Ministry of Finance has worked with ministries and agencies to organize many briefings to evaluate disbursement of public investment capital from foreign loans.

These briefings have clarified difficulties and problems and proposed solutions to promote the disbursement of this important capital.

Following the Prime Minister's guidance at the online briefingswith ministries, agencies and localities, this conference aims to evaluate disbursement of foreign loans in the first eleven months and exchange solutions to promote the disbursement of this capital from now to the end of the year.

According to reports by competent units under the Ministry of Finance, the disbursement in November was better. At the end of November, the expenditure controlled by the State Treasury reached 46.2% of the adjusted plan and the disbursed capital reached 44.63% of the adjusted plan.

“Thus, the disbursement in December is a difficult task,” said Mr. Tran Xuan Ha.

With the goal of achieving the highest results on disbursement of public investment capital in general, including foreign loans in particular, to contribute to fulfilling the economic development target of 2020 and creating momentum for 2021, the Deputy Minister said that this was a very necessary conference for ministries and agencies to express their opinions, raise problems regarding disbursement and propose solutions to accelerate disbursement of this capital and report the Prime Minister for guidance.

At the conference, Deputy Director of Debt Management and External Finance under the Ministry of Finance Hoang Hai said that in the first eleven months of 2020, VND6,312 billionwas disbursed, reaching 34% of the assigned plan from the beginning of the year, equivalent to 45% of the adjusted plan.

Notably, the expenditure controlled by the State Treasury was VND6,413 billion, or 35.2% of the assigned plan for 2020 and 46.2% of the adjusted plan for 2020.

"As of November 30, we received 712 applications for capital withdrawal and processed 700 applications, equivalent to 98%, sent to the Ministry of Finance," said Mr. Hoang Hai.

According to the representative of the Debt Management and External Finance, in addition to some units with good disbursement rates, there are ministries and agencies with low disbursement rates such as the Ministry of Planning and Investment, the Ministry of Culture, Sports and Tourism and Vietnam Academy of Science and Technology.

Five groups of solutions to promote ODA disbursement

Regarding problems affecting public investment disbursement from foreign loans of ministries and agencies, Mr. Hoang Hai said that the biggest problem in lowering the disbursement rate of ODA and concessional loans was the absence ofcompleted volumes of capital construction so there were no payment records, accordingly the disbursements could be made. This was caused by impacts of the Covid-19 pandemic,natural disasters and floods.

“However, even in areas that are less affected by natural disasters and floods, the Ministry of Finance found that disbursement progress and submission of withdrawal applications was still slow. The Ministry of Finance requests ministries to further clarify this problem and responsibilities of each stage,”said Mr. Hoang Hai.

In addition, projects have been allocated a capital plan but are undergoing procedures for project adjustment (such as extending the project's implementation period, extending the disbursement period, or adjusting items using capital) or procedures for loan agreement adjustments, so there is not enough basis for disbursement.

Sponsors also raised problems such as the time togive“disapproval”opinionsfor procurement activities and recruitment of consultants of some projects lasts too long; some sponsors request to use consultants of the sponsoring countries in the implementation of projects but the quality of consultants is limited, not ensuring the project progress while the role and opinion of sponsors for consultant's performance is not clear.

The preparation of capital withdrawal applications of project owners is incomplete, inaccurate and inappropriate

Accordingly, the Ministry of Finance proposed five groups of solutions to boost the ODA disbursement from now to the end of the year.

First, regarding the group of solutions to accelerate the implementation of projects to have completed volume for disbursement, especially for projects finishing in 2020 and 2021, the Ministry of Finance asks key ministries,agencies and project owners to urgently complete procedures for investment, construction, migration and resettlement and site clearance for project implementation.

To seriously handle problems of large investment projects, to focus on accelerating disbursement of investment projects with potential disbursement capacity, projects that have completed investment procedures, and bidding work, and to quickly sign bidding packages with “disapproval” opinions of sponsors.

To strengthen the capacity in the implementation of ODA projects at the governing body, investor and project management board levels, ensuring that the contingent of project managers are highly qualified and skilled.

The ministries and agencies shall have to arrange enough reciprocal capital for payment according to the assigned estimates; work with the Ministry of Planning and Investment and the Ministry of Finance to solve arising problems.

Sponsors review and reduce unnecessary approval procedures, speed up the approval time for issues that need “disapproval” opinions. For projects in the recruitment or hiring stage of consultants to set up total investment, there should be solutions to monitor the quality and progress of consultants, to avoid prolonging problems, affecting the project implementation.

Second, for projects that do not use up their assigned capital, a reduction must be proposed, the Ministry of Finance requires ministries and agencies to determine projects of which assigned capital shall be cut and identify projects that have not been disbursed in 2020, and projects which have been disbursed partly and work with the Ministry of Planning and Investment to determine the allocated capital for 2016-2020 to actual disbursed capital. For projects that have insufficient capital and are eligible for capital disbursement in the following years, it is proposed to include them in the medium-term plan for the 2021-2025 period and the capital investment plan in 2021.

Seek disbursement solutions for WB-financed projects

In addition to the two groups of solutions above, the Ministry of Finance also mentioned: the group of solutions to adjust investment policies and adjust loan agreements; the group of solutions for spending control, disbursement and process of withdrawal applications of sponsors and the group of solutions to improve the legal framework on re-lending.