Ministries and localities want to repay public investment capital

Monday, Oct 11, 2021 18:10

Workers at a construction site using public investment capital in Bac Ninh Province. The province has asked its agencies to speed up the pace of public investment capital assigned by the Government. — VNA/VNS Photo

At least nine ministries and localities have asked the Finance Ministry to repay more than VND8.054 trillion (US$352 million) of public investment capital borrowed from abroad.

This amount is equivalent to 44.08 per cent of the plan assigned by the Prime Minister.

This information was provided by Truong Hung Long, director of the Department of Debt Management and External Finance under the Ministry of Finance at an online meeting late last week to assess investment capital from foreign loans in the first nine months of 2021.

Long said the investment capital could be transferred to ministries and localities that need disbursement beyond the plan or are forced to cancel the capital plan according to regulations.

According to Long, the Prime Minister had assigned ministries and localities to disburse an amount of VND51.5 trillion of public investment capital from Official Development Assistance (ODA). Of this figure, ministries and centrally-run agencies will have to disburse VND16.6 trillion and localities will disburse VND34.9 trillion.

Long noted that as of October 6, the cumulative disbursement of public investment capital from foreign loans of ministries and centrally-run agencies reached VND3.16 trillion, or more than 19 per cent of the allocated investment capital. This figure was much lower than that of the same period in 2019 and 2020.

With such results, Long stated that it is not possible to complete the disbursement rate with respect to the capital plan to be greater than 95 per cent.

Vo Huu Hien, deputy head of the Department of Debt Management and External Finance, mentioned three main reasons for the delay in disbursement.

He attributed the first reason to the negative effects of the COVID-19 outbreak in localities. Secondly, other causes related to slow site clearance, and resettlement. Finally, changes in planning in several localities and many ministries were unable to fulfil all plans.

Explaining the delay in disbursement, a representative from the Ministry of Transport said six out of 15 public investment projects with foreign loans were halted amid the COVID-19 pandemic.

The main reason for the low disbursement ratio of public investment projects, according to the director of the HCM City Finance Department, Pham Thi Hong Ha, was also due to the COVID-19 pandemic. Projects are associated with foreign investment factors and import of equipment in need of foreign consultants’ approval.

She said there were problems related to the complicated process and procedures for managing and using capital.

Thus, the disbursement rate of HCM City’s ODA and foreign loan projects has so far reached only VND1.62 trillion or 12.45 per cent of the total allocated capital.

A representative of the Ministry of Agriculture and Rural Development (MARD) said since the beginning of this year, only 45 per cent of the capital disbursement has been made as planned. In addition, the social distancing orders in line with the Prime Minister’s Directive 16 affected the progress of projects.

The representative said even if it asked for isolation measures at the construction sites, only a few provinces agreed to allow such measures. As a result, the rest had to suspend work. So far, many irrigation projects have been able to be rebuilt however it is hard to implement them due to the rainy season.

Deputy Finance Minister Tran Xuan Ha said the low outlay of public investment capital, especially in localities, would affect the tasks of the country’s socio-economic development.

Ha affirmed that this was the first year of the 2021-2025 mandate, if this year’s disbursement trend was low, it would affect next year's and the following years.

During the seminar, representatives and localities proposed a number of solutions to remove difficulties and obstacles to speed up the disbursement pace.

The Finance Ministry will summarise the suggestions and report to the Prime Minister and work together with localities to remove difficulties and accelerate the disbursement of public investment capital. — VNS

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