Low disbursement rates of pubic investment in most ministries, agencies and localities

	State Treasury estimates disbursment investment capital of plan in 2021 reaching more than 13%
	Disbursement of public funds sped up to fuel growth
	Promoting State budget capital investment disbursement

The disbursement rate in the first three months of the year was low and lower than early-year period. Photo: Thuy Linh.

Many reasons curb the disbursement rate

Disbursed capital of the total investment capital plan of the State budget from the beginning of the year to March 31was estimated at more than VND66 trillion or 11.7% of the plan. The disbursed amount under the capital plans from previous years transferred to 2021 was VND5.2 trillion, or 9.43% of the plan and disbursed amount under the 2021 plan was more than VND 60.7 trillion dong, or 11.95% of the plan, reported the Ministry of Finance.

According to the ministry, the three-month disbursement rate is estimated to be low and lower than in the same period in 2020. Foreign capital has not been disbursed (estimated at only 0.66%). So far, most ministries, central agencies and localities have low disbursement rates.

Up to 44 of 50 ministries and 27of 60 localities have disbursement rates of below 10%. Ofwhich, 31 ministries have not yet implemented disbursement. In addition, three ministries and at least 19 localities have disbursement rates of more than15% of the plan such as Thai Binh (43.24%), the Ministry of Public Security (31.62%), BacNinh (30.2%), Hung Yen (28.67%), Thanh Hoa (27.79%) and Ha Nam (27.63%).

The low disbursement rates were due to ministries, central agencies and localities focusing on disbursement of the 2020 capital plan transferred into 2021.

In addition, several major projects had to adjust investment procedures (North-South highway project,) or investors in the first months of the year have beenpreparing some items such as making bidding plans orconstruction plans which take a long time to get paid volume, said the Ministry of Finance.

Another reason to curb the disbursement rate of public investment is site clearance compensation.

The Ministry of Finance said this work was facing many problems with unit price, compensation plan and relocation of utility works. Moreover, some investors are not decisive to urge contractors to carry out construction, leading to stagnation and slow disbursement.

Another reason is projects funded by ODA loans and concessional loans from foreign donors have been seriously affected by the Covid-19 pandemic because most of their activities are associated with foreign factors from the import of machinery and equipment to foreign experts, workers, contractors, consultation and supervision and donors. Disbursement is also delayed due to lack of completed volume.

Capital allocation should not be delayed

The Ministry of Finance also reported on the disbursement rates of some key projects such as the land acquisition, compensation and resettlement project of Long Thanh airport project disbursed VND 673.9 trillion (14.65%) under the capital plan 2021; or the project to build several North-South Expressway sections to the east in 2017-2020, was disbursed more than VND2trillion (or 13.3% of the assigned plan in 2021).

To speed up disbursement of the 2021 plan of the projects, the Ministry of Finance proposedthe Ministry of Planning and Investment review the remaining 2021 planned capital that has not yet allocated of ministries central agencies and localities to report to the Prime Minister for consideration and decision.

The Ministry of Finance also requests ministries and agencies to develop a National Target Programme for 2021-2025 to submit to competent authorities for approval and to propose a capital plan for 2021 to report to competent authorities to allocate capital to localities.