Focusing on resolving problems in the disbursement of foreign investment capital

Leader of Department of Debt Management and External Finance chaired the conference.

Proposing to reduce VND 4,717 billion of the plan

Reporting at the meeting, Hoang Hai, Deputy Director of the Department of Debt Management and External Finance, Ministry of Finance said most ministries and branches have taken many drastic measures to promote the disbursement of public investment capital borrowed from aboard. Therefore, disbursement of public investment capital in September topped VND 4,315 billion, an increase of VND 558.6 billion compared to August (up 3.14% compared to the disbursement rate on the assigned capital plan recorded in August).

Besides that, in the first nine months of 2020, the ministries and branches also focused on continuing to disburse the 2019 estimate and the extended capital, transferring the source worth VND 2,671 billion. Some ministries and branches have had good disbursement progress like the Ministry of Education and Training, Ministry of Transport and Ministry of Health.

Statistics from the Ministry of Finance also showed that 10/12 ministries and sectors (except the Ministry of Planning and Investment, Hanoi National University) committed to completing disbursement (after partially or fully reducing the capital plan, except the Ministry of Transport did not propose to cut capital).

Total capital of ministries proposing to reduce the capital plan is being synthesized by the Ministry of Planning and Investment and preparing to report to authorities for consideration and decision is more than VND 4,717 billion.

Regarding the time to control the capital withdrawal application, Truong Hung Long, Director of the Department of Debt Management and External Finance said the Ministry of Finance has shortened the processing time for valid capital withdrawal applications within 1-2 working days compared to current regulations.

For capital withdrawal applications ineligible for settlement, the Ministry of Finance has sent an official dispatch to return to the project owner for complete, ensure compliance with the law on budget expenditure and compliance with regulations of the loan agreement.

By the end of September, the Ministry of Finance had received 560 dossiers of capital withdrawal, of that 554 dossiers were resolved, accounting for 98.8%. The Ministry of Finance immediately returned six dossiers and recommended to complete soon.

Through monitoring and evaluating the task of disbursement and working with ministries and project owners, the Ministry of Finance found that disbursement results of projects using ODA and beneficial loans remained low due to no volume for disbursement.

Commitment to prioritise disbursement tasks

At the meeting, representatives of ministries and branches mentioned some causes of the delay. In particular, it is mainly due to the impact of the Covid-19 pandemic leading to a delay of the progress; some projects have been done but foreign experts have not come to check quality for completion; there are projects that have not completed domestic investment procedures such as site clearance, contract approval and bidding work is slowly implemented.

On the subjective side, some units reflect a long process of project preparation, inadequate investment preparation and other objective factors leading to changes in design and project adjustments in the implementation; the project has the budget arrangement but negotiation procedures have not been completed or the loan agreement has not been signed, or the loan agreement has been signed but has not received any legal opinion, or has just approved the on-lending conditions, so it did not have legal basis for disbursement, causing slow disbursement.

The comments and recommendations of ministries and branches were recorded by the Ministry of Finance. Some problems were resolved by representatives of the Ministry of Finance as well as the Ministry of Planning and Investment at the meeting.

Regarding the solution, the units all agreed they would seriously implement the instructions of the Prime Minister and regularly update and report on progress to promptly handle problems.

For capital plans in 2020 proposed to be cut or transferred, the Ministry of Finance recommended the units should clearly define which projects need to be cut, which projects cannot disburse and which projects can only disburse one part to supplement the capital plan for 2021.

The Ministry of Finance also suggested that ministries and branches should focus on resolving and coordinating with donors and concerned localities to remove difficulties and problems.

On the side of the Ministry of Finance, this authority made a commitment to continue considering disbursement of public investment capital borrowed from ODA and beneficial loans as a key task and coordinate with governing agencies in matters related to negotiating, signing and completing the procedures for the validity of the loan agreement, adjust the loan agreement (if any), sign the on-lending contract, review and accelerate work related to disbursement and discuss with donors problems that arise during the disbursement process.