The upgrading of the second phase of the Chợ Gạo Canal project is progressing rapidly thanks to timely disbursement of public investment capital. — VNA/VNS Photo Minh Trí

Just less than a month left until the deadline for the repayment of the capital for the year 2023 (in late January 2024), but the disbursement of public investment capital is still lagging, with more than VNĐ247 trillion (US$10.18 trillion) remaining to be disbursed. Achieving the disbursement target of 95 per cent, as assigned by the Prime Minister, will be very challenging. Lê Tuấn Anh, deputy head of the Investments Division under the Ministry of Finance spoke with local media about solutions to accelerate the disbursement of public investment capital.

How do you assess the disbursement progress of public investment capital?

According to the Ministry of Finance, the estimated disbursement of public investment capital from the beginning of the year until November 30 is VNĐ460.9 trillion (US$..), reaching 65.1 per cent of the Prime Minister's assigned plan and increasing 6.77 per cent compared to the same period last year.

This result indicates a very encouraging trend. It is attributed to the resolute guidance from the National Assembly, the Government, Prime Minister, and ministries and localities. The Government has consistently issued resolutions to address specific issues related to project implementation, such as raw materials, procedures, regulatory authorities, and more.

In particular, the Prime Minister has established six working groups led by four Deputy Prime Ministers and two ministers from the Ministry of Finance, the Ministry of Planning and Investment, to work with all localities on the disbursement progress on a monthly basis.

Ministries and localities have assigned tasks, and established working groups to collaborate with each management board and project to boost the disbursement progress.

However, compared to the total disbursement plan for 2023, the disbursement rate over the past 11 months is still low. Some ministries and localities have high disbursement rates, such as the State Bank reaching 94.74 per cent, the Ministry of Transport at 73.42 per cent, the Ministry of Public Security at 71.61 per cent, the Ministry of National Defence at 70 per cent, Vĩnh Phúc Province at 98.97 per cent. However, there are still 15 ministries, central agencies, and localities with disbursement rates below 15 per cent, and two localities below 35 per cent.

This has raised the issue that, despite having the same mechanism, some units perform well while others do not. It is necessary to identify the reasons for this and find solutions for the upcoming plans.

The nationwide disbursement rate has only reached half of the plan. Why is this?

Based on the reports from ministries, central agencies, and localities, as well as inspection results by the Minister of Finance at the localities, it is evident that there are numerous factors affecting the nationwide disbursement progress.

Specifically, there are obstacles related to legal regulations on investment and construction that need to be addressed, such as the conversion of forest and rice land, mineral exploitation, and challenges in implementing projects under the national target programme. There is also a shortage of construction materials in some localities in the Mekong Delta.

It wasn't until September 2023 that guidelines for investment preparation and adjustments between tasks and projects of the Economic and Social Recovery and Development Program were provided. These guidelines relate to tasks and projects under the mid-term public investment plan for the 2021-2025 period, which had already allocated funds in the 2023 budget.

Furthermore, challenges in organising land clearance, including land use planning issues, are significant. The key issues include determining land origins, setting land prices, and the lack of consensus among citizens regarding compensation and resettlement plans. This has led to delays in the process of selecting contractors, signing contracts, and implementing projects.

The allocation of funds is not evenly distributed. There is a tendency to avoid responsibilities. Project owners often accumulate or concentrate the settlement of contracts at the end of each quarter.

Some ministries and local authorities have not detailed the allocation plans, which means that disbursement cannot occur by the reporting time. Some projects, even though allocated, have not been disbursed, leading to the overall low disbursement rate of public investment capital.

What measures has the finance sector taken to address the challenges in disbursing public investment capital and to expedite progress?

The finance sector has two main functions: ensuring a balanced source of funds to pay for budgetary expenditures, including investment and carrying out payment procedures. In terms of funding sources, we are not under pressure.

Regarding procedural matters, in 2021, the Ministry of Finance issued new mechanisms for payment and settlement of public investment projects, which came into effect from 2022. With this new mechanism, the documentation has been minimised, and the time for reviewing payments has been shortened, utilising information technology for online transaction processing.

As soon as ministries, agencies, and localities detailed their plans, the Ministry of Finance conducted checks, provided immediate feedback on the annual plan, allowing adjustments to ensure the proper allocation of funds for the required projects.

Especially in 2023, the ministry organised three workshops in three regions, bringing together officials in the field of financial management, treasury, and project management to discuss and unify payment mechanisms and address challenges that arose during the disbursement process at ministries, agencies, and local levels.

Additionally, following the assigned tasks and responsibilities of the working group led by the Minister of Finance as the team leader, the ministry closely monitors and evaluates the implementation of the public investment plan.

The ministry regularly conducts direct and online inspections with localities, offering suggestions and solutions to overcome difficulties promptly based on practical challenges. In reality, the areas that have been inspected and urged have shown higher disbursement rates than those not yet inspected.

Given the current low disbursement rate, the ministry continues to recommend that ministries, agencies, and localities provide guidance to resolve obstacles and efficiently implement key tasks to promote the disbursement of public investment capital.

Furthermore, the ministry requests that ministries, sectors, and localities complete the adjustment and reallocation of slow-disbursing or non-disbursing projects to those with the potential for rapid disbursement. A detailed disbursement plan for each project should be developed, adhering to the disbursement plan on a weekly basis. The assessment of implementation capacity in 2023 should also be carried out.

The ministry also proposes that the Prime Minister instruct the Ministry of Planning and Investment to continue coordinating with ministries, agencies, and localities to clarify the reasons and responsibilities for proposing the extension of disbursement to the following year. – VNS