National Assembly leaders advised caution in amending the Law on Public Investment, saying that adjustments are necessary but must not be made hastily, lest the legal system be disrupted.

The comment was made by Vice Chairman of the National Assembly Phung Quoc Hien during a session held yesterday on the implementation of the public investment law and public investment medium-term plan (2016-2020).

Hien said issuing the law was a significant landmark, as it helps to avoid scattered and arbitrary public investment and define accountability in public investment decisions.

The Minister of Planning and Investment, Nguyen Chi Dung, said this is the first law on public investment directly concerned with the interests, rights and responsibilities of ministries and other public sector groups as well as local governments so “difficulties in implementation are unavoidable.”

According to Dung, allowing disbursement time for public investment plans to be extended for extra years would cause investors to not try their best to complete projects within a year.

The implementation of the investment law has also highlighted a major inconsistency with the environment law – while the latter demands a full and approved environmental impact for investments to go ahead, the former only requires a basic environmental impact assessment and environment protection plan.

NA deputies also noted inconsistencies between the public investment law and the State budget law, especially in terms of official development assistance disbursement.

Slow capital disbursement

A report by the Ministry of Planning and Invesment (MPI) showed the budget for medium term public investment as approved by the NA was VND two quadrillion (US$88 million), four per cent of which – VND 80 trillion ($3.52 billion) – was allocated for key national projects. VND 10 trillion has been reserved for an anti-flooding project in HCM City.

According to estimates, by the end of September, disbursement only reached a woeful 51 per cent, similar to the same period last year.

The tardy disbursement was blamed on tighter and lengthier procedures for public investment. However, many deputies concerns that while public debt is worryingly high and interest rates still have to be paid; slow disbursement would undermine the efficiency of capital.

The slow disbursement plagues even key projects like the anti-flood project in HCM City or the North-South expressway, with NA Vice Chairman Hien saying this was the first time a five-year public investment plan was implemented so missteps are natural. He also criticised the medium-term public investment as illogical and unpractical, while local governments have not followed public investment regulations closely.

Deputy Ta Van Ha from Bac Lieu Province called for clarity regarding which agencies hold the main responsibility in managing public investment, citing the fact that in many cases, investment plans get approved at a central level, but once deployed in localities, local governments issue another plan.

Hien shared this concern, saying that the onus of public investment is on the Government, while the MPI should assist the Government. — VNS