Sprint to disburse capital from the budget

	State Treasury accelerates the disbursement of investment capital in the last months of 2018
	Ministry of Finance has rectified the report on disbursement of investment capital
	Identifying 6 causes of low local capital disbursement

A number of projects are suspended to adjust the total investment, investment policy, evaluate the efficiency. Photo: H.Vân.

Many units are ‘treading water’

Looking at domestic capital, the total payment in 10 months is over 205,651 billion vnd, reaching 61.61% of the Prime Minister's plan, of which the Government bonds is more than 14,196 billion vnd, the national target program is more than 6,233 billion vnd.

There are 2 ministries, central agencies and 6 localities with high disbursement rate of over 85% of the plan. 6 provinces are Nam Dinh, Bac Ninh, Quang Ninh, Hai Phong, Hai Duong and Binh Phuoc, of which Nam Dinh disbursed over 90% of the plan.

In contrast, there are 32/56 ministries, central branches and 46/63 localities have lower disbursement rate in the first 10 months of 2018 compared to the national average (below 60% of the plan). Of which, 13 ministries and branches have disbursed less than 30%; 5 ministries and central branches with a disbursement rate of less than 10% are the Vietnam Union of Literature and Arts Associations; Tobacco Corporation; The Vietnam Cooperative Alliance; Ministry of Health, Ministry of Foreign Affairs. These units are “treading water”, according to the disbursement report for several months of the Ministry of Finance's.

The Government bonds have been disbursed slowly, reaching just over 32% of the plan assigned by the Prime Minister. The Ministry of Finance said that the allocation of bond funds is not close to the ability of disbursement of ministries, sectors and localities. The total capital of the Government bond that is assigned for ministries, central agencies is 17,047 billion vnd (the Ministry of Agriculture and Rural Development, Ministry of National Defense, Ministry of Transportation and Ministry of Health).

However, since the projects are all newly launched, most of the projects are still in the process of development, or have just completed the technical documentation, construction drawing. The selection of construction and disbursement units is mainly from the fourth quarter of 2018, so ministries are unlikely to disburse all the capital allocated in 2018.

For the Ministry of Agriculture and Rural Development, the Ministry of Transportation, the Government has reported to the National Assembly to adjust 1,267,544 billion of the plan in 2018 for these projects for the localities in need.

In many localities, many new projects have completed the 2017-2020 bond capital plan in 2017 and 2018. Specifically, 38/49 transport projects, 2/5 projects of the irrigation sector, 2/6 projects of health sector and 37/46 localities for consolidation of schools with a total capital of more than 48,712 billion vnd (accounting for 86% of the total government bond in the period 2017 - 2020).

The implementation of these units showed that some ministries, branches, localities, some investors have not been proactive and drastic in the implementation of the plan; slow in finishing the technical design documents, construction drawing, selection of construction units...

Struck mechanism

For foreign capital, the payment to the end of October 2018 is 19,149 billion vnd, reaching 31.77% of the plan assigned by the National Assembly; accounting for 34.84% of the Prime Minister's plan.

According to the Ministry of Finance, the problem is the mechanism. Specifically: some projects have been allocated 2018 capital plan, however, as the disbursement period according to the agreement or the decision of the authorized level expired, they are in the process of extending the disbursement time as regulated, such as: Project on wastewater and wastewater treatment in Thai Nguyen city; Bac Kan Water Supply and Sanitation Project; project of Yen Bai General Hospital...; Intelligent Transportation System (ITS) Project for Ho Chi Minh City - Trung Luong Expressway. Some other projects are temporarily suspended to adjust the total investment, investment policy, re-evaluate efficiency such as the Center Space Center of Vietnam; Metro 2 Subway Construction Investment Project of Ben Thanh - Tham Luong in HCMC.

Some projects are blocked due to inappropriate allocation of capital plan. For example, the Project of Can Tho City Development and enhancement of the urban adaptability registered a large capital plan, not suitable with the progress of project implementation; Hanoi City Urban Railway Construction Project (Line 1) Phase 1 (implementation of the project) must re-diversify investment and adjust the total investment, which have not yet completed the domestic procedures, unable to carry out but but still assigned capital plan; project on Support for the renovation of general education without capital construction but still allocated capital plan.

In addition, the disbursement of foreign capital has been slow due to the lack of harmonization between the procedures for capital allocation and the procedures for extending disbursements of the loan agreement. Specifically, under the provisions of the Law on Public Investment, foreign capital cannot extend the payment deadline within one year as domestic capital.

Accordingly, the disbursement of foreign capital is controlled by the annual budget and the disbursement period under the loan agreement. In order to be allowed to extend the annual budget or to allocate additional capital for the following year, the project must carry out many procedures. After completion of procedures for extension of the payment period, the project will face expiration date for disbursement according to the loan agreement.

In a recent report to the Prime Minister, the Ministry of Finance has asked the Ministry of Planning and Investment to sum up the need to adjust the foreign capital plan among ministries, branches and localities to report to competent authorities in accordance with regulations.

On the basis of difficulties and problems arising in implementing Prime Minister’s directions, the Ministry of Finance asked the Ministry of Planning and Investment to chair and coordinate with the Ministry of Finance and other concerned ministries and branches to urgently review the capital plan in 2018 to adjust according to its competence or report to competent authorities to adjust the capital plan between the slow disbursement projects and the projects which need to speed up disbursement.

Disbursed foreign capital is much lower than in the same period of 2017 VCN - According to the Ministry of Finance, the disbursement of foreign direct investment (FDI) to date ...

In order to speed up the acceptance and payment process, the Ministry of Finance requests the ministries, branches and localities to direct the investors to accelerate the progress of the projects and urgently review the volumes which are already implemented for finalizing the procedures for checking and accepting and sending to the State Treasury for payment according to regulations.

For projects with approved decisions on settlement of completed projects, the ministries, branches and localities are to ask the investor to send promptly such dossiers to the State Treasure for making final payment to contractors as prescribed by current regulations.