A view of Ben Thanh - Suoi Tien Metro Line No 1 project. The disbursement of public investment borrowed from abroad must be sped up in the remaining months of this year to promote post-pandemic socio-economic development. — Photo vietnambiz.vn
Loans borrowed from abroad for public investment must be disbursed quicker if Viet Nam is to recover economically from the impacts of the coronavirus pandemic, according to the Ministry of Finance.
Deputy Minister of Finance Tran Xuan Ha told a conference on Thursday that disbursing public investment funds and loans from abroad for public investment, in particular, remained key issues as huge sums must be spent in the second half of this year.
“The workload is very huge, especially as the Government sees public investment as an important driver of post-pandemic socio-economic growth,” Ha said.
The ministry’s statistics showed that as of Wednesday, VND7.42 trillion (US$320 million) in public investment borrowed from abroad had been disbursed, equivalent to 13.1 per cent of the plan for the full year and 3.6 times higher than the same period last year.
Of the disbursed sum, VND2.8 trillion has been disbursed by ministries and central-level agencies, or 15.46 per cent of the plan. Three ministries had disbursement rates higher than 20 per cent of the plan, namely the transport, national defence and health ministries.
The Ministry of Industry and Trade, which was allocated VND138 billion of funds for public investment borrowed from abroad, has not disbursed any this year.
At local levels, the disbursed sum was equivalent to 11.98 per cent of the plan. Fourteen out of 63 provinces and cities had disbursement rates higher than 20 per cent of the plan while 10 failed to make any disbursement from the beginning of this year.
HCM City had a modest disbursement rate of 4.13 per cent due to problems in reimbursement at three projects. If the problems at the project of Ben Thanh – Suoi Tien Metro Line No 1 were tackled, the disbursement rate would reach 40 per cent.
Ministries and localities continued to disburse public investment funds borrowed from abroad planned for 2019 but transferred to 2020, estimated at nearly VND7.2 trillion in the first six months of this year.
According to Ha, the economy was hard-hit by the COVID-19 pandemic, which also caused difficulties for projects which used official development assistance (ODA) and foreign loans.
The disbursement of public investment funds borrowed from abroad remained low compared to the disbursement of investment from the State budget which was estimated at 28.2 per cent of the plan.
With the current speed of disbursement coupled with the impacts of the pandemic on the economy, if no drastic solutions were taken, it would be difficult to fulfil the Government’s targets in using ODA and foreign concessional loans for this year and for the 2016-20 period, Ha said.
There were a number of reasons for the stagnation in the disbursement of public investment funds, Ha said.
He noted that COVID-19 had seriously affected the progress of projects using ODA and foreign concessional loans.
According to Truong Hung Long, Director of the ministry’s Department of Debt Management and External Finance, many big projects were conducting procedures for adjusting investment policies and it took time to negotiate lending terms with donors.
Other reasons were slow land clearance, limited capacity of contractors and disputes between investors and contractors. Many ministries and localities had not completed the allocation of public investment for such projects.
According to Ha, speeding up disbursement of public investment required determination and enhanced co-operation among Government agencies, ministries and localities.
The Ministry of Finance also urged ministries and localities to keep a close watch on the progress of public-invested projects to timely raise measures to tackle problems. — VNS