Foreign capital disbursement increased: Not much improvement

	Proposing ministries and sectors urgently deploy projects that have been allocated capital, ensuring disbursement progress of investment capital
	Foreign capital to flow into non-life insurers on hopes of State divestment
	Expectation of foreign capital is more positive in 2020

The inspection of time and determination of foreign capital by the State Treasury must not exceed three working days. Photo: Thuy Linh

Ten ministries and branches committed to complete target

In the first nine months of 2020, the ministries and branches also focused on disbursingthe remaining of the estimate in 2019further and the extended capital, the source transferringworthVND2,671 billion.

Another good sign is that the Ministry of Finance noted that ten of twelve ministries and branches committed to complete disbursement after adjusting a partial or full reduction in the capital plan.These are the Ministry of Education and Training, Ministry of Transport, Ministry of Health, Ministry of Industry and Trade, Ministry of Science and Technology, Ministry of Defense, Ministry of Agriculture and Rural Development, Ministry of Natural Resources and Environment, Ministry of Culture, Sports and Tourism, Academy Instituteof Science and Technology.

Mr. Dinh Minh Tung, Deputy Director of the Financial Planning Department, Ministry of Education and Training, said that the disbursement rate of this ministryreached 39% of the assigned capital planby September 30, 2020,an increase of 18 % compared to the disbursed figures at the end of August.

Thanks to that, the Ministry of Education and Training had reached the "top" of the ministries with the highest disbursement progress in September. He saidthat the result was thanks to the drastic direction of the ministry's leaders.

Along with that,the Ministry of Education and Training had strengthened the working group to promote disbursement, at the same time assigned its leaders to directly take charge of a number of project groups in order to promptly remove difficulties and problems for some projects, sothe disbursement rate had increased over the previous month.

Mr. Nguyen Anh Dung, Deputy Director of Planning and Finance Department, Ministry of Transport,saidthe Ministry of Transport had drastically directed the project management and coordinated with local authorities to accelerateland clearance, quickly deployed bidding in a number of projectsto speed up disbursement in the last months of the year.

Other ministries and branches such as the Ministry of Health, the Ministry of Natural Resources and Environment, the Ministry of Defense also said that they had applied solutions to accelerate disbursement.

Ideas for removing difficulties

Although the disbursement results in September were more positive than August, in general, the disbursement results of projects using ODA and foreign concessional loans were still low. The reason given by the Ministry of Finance is that there has been no volume for disbursement.

According to Mr. Hoang Hai, Deputy Director of the Bureau of Debt Management and External Finance, this issue stemmed from the factthat the project had not completed domestic investment procedures, such as not completing land clearance, approvingcontracts; the bidding of many projects had been implemented slowly, some projects had complained during the bidding process.

Along with that, the project preparation process was prolonged,the investment preparation was not completed carefully, and other factors of objective difficulties led to changes in the design, adjustments to the project during the implementation process, extending the deadline ordisbursement time.

Meanwhile, the procedures for adjusting investmentdecisions andloan agreements were delayed so there was no legal basis for disbursement.

Mr. Cao Manh Cuong, Deputy Director of Foreign Economic Department, Ministry of Planning and Investment,was concerned about disbursement results from now to the end of the year. Mr. Cuong said that although the ministries and branches all committed to complete disbursement, the actual disbursement data had not improved much. The disbursement rate had increased, but part of the reason was that the capital plan had been cut, and there hadnot been real changes.

One problem raised by many ministries and branches is that the time to control the withdrawal application was too long, causing slowdowns. According to Mr. Hoang Hai, the Ministry of Finance had shortened the processing time for valid capital withdrawal applications within 1-2 working days compared to the current regulations.

For the capital withdrawal applications that are not yet eligible for settlement, the Ministry of Finance had sent an official dispatch to immediately return the project owner to complete them, ensure compliance with the law on budget expenditure and compliance with regulations of the loan agreement. By the end of September 2020, the Ministry of Finance had received 560 withdrawal documents, of which 554 dossiers were resolved, accounting for 98.8%. The Ministry of Finance immediately returned six dossiers and proposed them to be completed soon.

Speakingabout this issue, Mr. Nguyen Viet Hong, Deputy General Director of the State Treasury, affirmed that the checking time and determining of foreign capital of the State Treasury must not exceed three working days. However, this was only one step in the process of disbursing the public investment capital from the foreign loan because after the State Treasury had confirmed the capital, there were steps such as signing the withdrawal application and the donor transferring money to disburse.

In order to promote the disbursement of public investment capital from foreign loans, in a recent report to the Prime Minister, the Ministry of Finance continued to propose ministries and branches seriously implement the Prime Minister's direction. For problems or unclear policy, ministries and branches should soon consult relevant agencies to study, amend and supplement accordingly.

For thecapital plans in 2020proposed tocut and transferred to other ministries and localities, the Ministry of Financesuggests ministries and branches to clearly define which projects would be cut, which projects would not be disbursed completely in 2020, which projects would be disburse a part to add the capital plan arranged for that project right into the investment plan for 2021.

From there, ensure the projects have enough funds to implement according to the time and progress committed with donors in foreign loan agreements.

In case the capital plan in 2020proposed for the reduction for ministries which had not yet allocated in detail to projects because the planning has not met the requirements, ministries and branches can learn from experience when building plans for 2021 and the following years.

Within their competence, ministries and branches should focus on resolving issues completely; coordinate with donors, concerned agencies and localities to remove difficulties and problems, especially large investment projects, projects that are about to expire in accordance with the loan agreement.