An elevated section of HCM City’s Bến Thành – Suối Tiên metro line runs along Hà Nội Highway. The city authorities have been urged to accelerate the speed of capital allocation to speed up disbursement this year. VNA/VNS Photo Mạnh Linh

HCM CITY — HCM City authorities plan to review obstacles to public spending and the speed of fund allocation and disbursement this year.

Lê Thị Huỳnh Mai, director of the Department of Planning and Investment, said the city spent VNĐ24.62 trillion (US$1.06 billion) last year, or only 85 per cent of the allocation for public spending. 

Transport infrastructure was one of the areas with a low disbursement rate, she said.

“The disbursement of public expenditure differed every month with large sums being disbursed during the final months of the year.”

Some projects are yet to complete investment procedures and are still in the process of finalising costs or extending loan agreements, especially urban rail projects like the metro line No.1 between Bến Thành Market in District 1 and Suối Tiên Theme Park in District 9. 

According to a report by the city government to the Ministry of Transport, the city needs more than VNĐ83 trillion to execute 19 major traffic projects this year, but has managed only 35 per cent of the amount.

The main reasons for slow disbursement of public investment include tardy land acquisition for some projects, delayed completion of administrative procedures and delays in completing investment procedures and designs.

Besides, many projects are allocated funds that cannot be disbursed due to problems related to land acquisition and resettlement.

Recommendations

To speed up public spending the city has assigned the responsibility for the progress of projects to officials, whose performance will also be assessed by the rate of disbursement.

It will also review and classify projects that face obstacles related to investment, construction and bidding procedures, land procedures and site clearance and capital disbursement to promptly work out solutions.

It will also take away funds from projects with low disbursement rates and transfer them to projects with higher rates.

It requires projects to be completed this year to be speeded up and final checks and payments to be made to contractors. 

In the case of those to be completed after 2020, developers have been told to urge contractors to speed up construction, complete legal procedures and carry out final checks of completed works to pay the contractors on time.

For new projects, developers need to prepare design documents and cost estimates in accordance with regulations, select contractors and ensure speedy construction, and speed up compensation payment and resettlement. 

Developers must submit a feasibility report to competent authorities for approval in accordance with the Law on Public Investment, the Construction Law and others.

The Department of Natural Resources and Environment has been ordered to work with the Ministry of Natural Resources and Environment to speed up payment of land compensation and resettlement assistance.   

Over the years public investment in the city has been slow, seriously affecting socio-economic development, experts said.  

It also causes loss of trust among investors and donors and national prestige, they said. 

It also results in rising costs, they added. — VNS