Urgently disbursing public investment at beginning of the year

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Ring Road 4 - Hanoi Capital Region. (Illustrative photo)

The disbursement rate is not high

According to the latest Ministry of Finance data, the estimated public investment disbursement rate from the State budget by the end of the fiscal year 2022 reached 80.63% of the plan. The rate recorded 92.97% compared with the target assigned by Prime Minister and lower than the same period in 2021.

The domestic and foreign capital reached 96.17% and 42.47%, respectively, compared with the same period of the previous year. According to the Ministry of Finance, 13 ministries and 20 localities have currently seen a disbursement rate of over 90%. In addition, 27 of 52 ministries and 21 of 63 localities reached this rate of less than 80%, including eight ministries and one locality with a rate of less than 50%.

In 2022, the Prime Minister established six working groups and organized four consecutive inspections to urge and remove difficulties and obstacles and accelerate the disbursement of public investment in several ministries, central agencies and localities.

The inspections pointed out some reasons for the delay in disbursement. Accordingly, the economy was strongly impacted by the Covid-19 pandemic in 2022, along with fluctuating factors such as the high increase in prices of raw materials, fuel, and international freight costs. In addition, the mobilization of foreign experts, managers, contractors, and imported machinery and equipment for public investment projects, especially ODA projects and foreign concessional loans, were affected.

In addition, 2022 is the second year of implementing the Medium-term Public Investment Plan for the 2021-2025 period and the year that ministries, sectors and localities started to kick off many projects, so they just implemented investment and bidding procedures.

Notably, compliance with the law and respect for discipline in public investment was not performed well. As a result, some Ministries, sectors and localities were not followed provisions in the Law on Public Investment, the resolution of the National Assembly and the decision of the Prime Minister, leading to the adjustment of the allocation plan.

The capacity in implementation was not effective; the roles and responsibilities of the head were not clearly shown; capital allocation was ineffective. In addition, the capacity for planning and implementing still showed shortcomings, especially the capacity for assessment inspection, supervision, and construction, leading to the delay in implementing many projects, disbursement and settlement.

Drastically disburse public investment from the beginning of the year

Currently, the public investment plan from the State budget in 2023 has been assigned by the National Assembly with a record capital of VND756,111,862 billion. Of which, the domestic capital is VND 727,111.86 billion, foreign capital is VND29,000 billion. This shows the strong disbursement pressure for projects in 2023.

Right at the beginning of the year, ministries and sectors urgently disbursed this investment. However, the Ministry of Finance said in January of 2023 the ministries, central and local agencies have planned capital disbursement for projects and completed procedures for the disbursement, so the disbursement rate is low.

The Ministry of Finance proposed the Ministry of Planning and Investment to coordinate with the Ministry to urgently instruct and grasp the needs of ministries, central and local agencies on extending the time for allocating capital of projects using the central budget to 2023 and the time for disbursement of central budget capital from 2022 to 2023.

The Ministry of Finance also requested units to provide drastic solutions to overcome shortcomings and limitations to accelerate the disbursement from the beginning of 2023, especially key national projects, infrastructure development programs and projects, and ODA-funded projects, creating a driving force for socio-economic development. Proactively prepare necessary facilities for implementation immediately after the competent authority assigns the capital plan. Enhance the leader's responsibility in deciding on investment policies, projects and disbursing public investment.

The Ministry of Finance proposes ministries, central and local agencies to collaborate with the Ministry of Planning and Investment to report to the Prime Minister and provide instructions on flexible adjustment between tasks and projects using capital from the medium-term public investment plan and from the socio-economic recovery and development program during the implementation of the state budget investment plan in 2023.

The Ministry asked the People's Committees of the provinces to direct the investors to focus on speeding up the construction progress, urgently accepting and completing the payment procedures, and strengthening the implementation inspection to find out the causes of slow disbursement in each project. Then, review and decide to transfer capital under their competence or report to the competent authority to transfer capital plans of ineffective projects to potential projects to achieve the plans.

Regularly work with investors and project management boards on the implementation and payment of investment of projects; promptly solve difficulties and obstacles during the performance; report competent authorities to resolve cases beyond their power. Implement sanctions to handle investors and project management boards that do not fully implement the assigned capital plan.