Necessary to direct drastically implementation of foreign loan disbursement from now until the end of the year

Deputy Minister of Finance Tran Xuan Ha chaired an online conference with ministries and sectors to assess the disbursement of public investment capital from foreign loans.

This was mentioned by Deputy Minister Tran Xuan Ha at an online conference with ministries and sectors to assess public investment capital disbursement from foreign loans in the first five months of 2021 and solutions to increase disbursement in 2021 held by the Ministry of Finance.

Deputy Minister of Finance Tran Xuan Ha said in the first five months of the year, the disbursement rate of foreign loans only hit 7.53% compared to the plan assigned by the authority.

The disbursement of investment capital in general as well as the slow disbursement of foreign loans has affected Vietnam’s socio-economic development and the implementation of fiscal and budget estimate tasks in 2021. Besides that, it also affects relations with partners in implementing projects.

According to the Deputy Minister, implementing the policy of the Government and the National Assembly, from the beginning of the year, the Ministry of Finance and the Ministry of Planning and Investment sent many documents to ministries, sectors and localities requesting them to speed up the allocation of investment capital to investment projects, urgently enter and allocate to the Tabmis system to control expenditure.

It is also recommended that project owners and project management boards have a construction investment volume and complete the payment conditions to send a capital withdrawal application to the sponsor for disbursement in accordance with the prescribed regime.

However, with solutions implemented since the beginning of the year, the disbursement of public investment capital from foreign loans is still slow.

The Ministry of Finance held a meeting with ministries, sectors and project owners under the management of central assigned public investment capital from foreign loans with the purpose of clarifying and exchanging the causes of the problem to figure out the reason for slow disbursement.

The Deputy Minister said besides the reports of the ministries and sector deployed in the first five months of the year, information exchanged during the conference will also be summarised to report to the Prime Minister and the Government on the situation of solving problems and solutions to promote capital disbursement in the near future.

Reporting at the conference, Truong Hung Long, Director of the Department of Debt Management and External Finance (Ministry of Finance) said that the total estimate of foreign capital allocated from the central budget according to Decision No. 2185/Decision-TTg dated December 21, 2020 of the Prime Minister on the assignment of the State budget investment plan in 2021 to the ministries and sectors is VND16,636.75 billion.

By the end of May 31, 2021, the rate of importing estimates on Tabmis detailed by project compared to the foreign loan plan assigned by ministries and sectors hit 72.55% (VND 12,069.87 billion).

By the end of June 10, 2021, disbursement data for the 2021 public investment capital plan from ministries and sector was VND 1,253 billion, reaching 7.53% of the assigned estimate (only five of 13 ministries and sectors disburse public investment plans with foreign loans in 2021).

Ministries and sectors still disburse public investment capital from foreign loans according to the 2020 capital plan. From January 1, 2021 to June 10, 2021, total disbursement according to the 2020 capital plan of the ministries, industry is VND2,187.7 billion (double the disbursement according to the capital plan 2021).

As of the end of June 10, the Ministry of Finance has only received 129 official letters requesting capital withdrawal, has processed 129 applications for capital withdrawal with an average processing time of capital withdrawal applications is 1.5 days.

Long also mentioned problems affecting public investment disbursement of foreign loans by ministries and sectors, including reasons such as the project has not completed investment procedures, even though the negotiation procedures have not been completed or the loan agreement has not been signed, capital has been allocated; the project has proposed to stop implementation but still has the estimate, will have to cancel the estimate.

The project has been allocated capital and completed investment procedures but is slow to carry out work ready for investment such as delay in site clearance and resettlement; basic design has not been completed, mainly traffic projects.

At the conference, representatives of ministries and sectors like the Ministry of National Defense, Hanoi National University, the Ministry of Industry and Trade, the National University of HCM City, the Ministry of Labour, Invalids and Social Affairs, the Ministry of Transport, etc., informed about disbursement of projects, causes of delay, difficulties, problems and inadequacies.

Deputy Minister Tran Xuan Ha delivered the concluding speech of the conference

Speaking at the end of the conference, Deputy Minister Tran Xuan Ha said the disbursement rate of foreign loans was just more than 7%, which was very low. The disbursement of investment capital that affects economic growth, well-disbursed ODA and foreign concessional capital would promote the country's economic growth and help perform financial tasks well. The main budget has been assigned by the National Assembly. Therefore, low disbursement of this capital was a matter of great concern.

Directing solutions to accelerate ODA disbursement, the Deputy Minister said from now until the end of the year, the most important solution is still the role of investors and project management boards. It is necessary to actively and drastically implement projects, complete investment procedures, implement site clearance, organise bidding, sign contracts, verify completed volumes, prepare documents for approval on making payment in accordance with regulations and return documents for advance payment to record revenue and expenditure.

“It needs to be a very drastic implementation direction, inspection and supervision, if there are any difficulties or problems, you must contact the ministries and sector to solve them in a timely manner. For the delay of the donors in the no-objection, it is necessary to report to the donors for appropriate settlement," the Deputy Minister emphasised.