Disbursement progress of public investment The direction and administration is the decisive stage

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Institutional reform is the key step, but direction and administration is the decisive stage.
Minister of Planning and Investment Nguyen Chi Dung.

Disbursement of public investment capital is still slow. How do you rate this statement?

It is true that the results did not meet expectations which is why the Prime Minister had to set up six working groups to inspect and urge the allocation and disbursement of public investment capital at ministries, branches, localities that have a low rate of capital allocation and disbursement.

At the same time, we have continuously taken drastic solutions to remove difficulties and obstacles, and promote disbursement.

However, to assess whether it is slow or not, in my opinion, it is necessary to look at it comprehensively and for a whole period. Taking one example, the actual disbursement rate usually reaches about 22-26% of the plan assigned by the Prime Minister in the 2017-2022 period, of which the lowest is 22.12% in 2021 (VND102.03 trillion), the highest in 2019 reached 26.4% (VND96.89 trillion); but disbursement for the whole year fluctuated strongly, it was in the range of 76.89% to 96.47%.

This time the disbursement rate in 2018 is the lowest, reaching 76.89% (VND303.1 trillion) in 2019 the second lowest is 78.83% (VND325.1 trillion) although this year itself five-month disbursement rate reached the highest in the 2017-2022 period.

Thus, it can be seen that the disbursement rate usually increases gradually at the end of the year. The specificity of disbursement of public investment capital is low in the first months of the year and increases sharply in the last months of the year, because contractors need time to construct and accumulate enough volume for acceptance and payment.

Therefore, the judgment of fast or slow disbursement needs to consider this factor.

The low disbursement in the first months of the year has not confirmed that the disbursement rate for the whole year will be low.

When I reported to the National Assembly, I made this very clear. It can be said that the disbursement rate for the whole year clearly reflects the effect of solutions in terms of institutions, leadership, direction and administration at all levels on the disbursement of public investment capital. Institutional reform is the key step, but the direction and administration is the decisive stage. Where the Party committees and authorities are interested in leading and directing fiercely, the disbursement rate is higher.

Is slow disbursement mainly due to management and direction, sir?

The disbursement is slow due to many reasons. There are systemic causes, persisting for many years, some are subjective, objective, and specific to each year. For example due to slow clearance; the limited capacity of the investor and the contractor; the lack of drastic and thorough direction and management.

In 2022, there are some specific reasons, such as the Covid-19 pandemic, causing difficulties for construction progress. At the beginning of the year, the price of raw materials increased so many contractors tended to build in moderation, waiting for the unit price to be adjusted.

Moreover, although 2022 is the second year of implementing the Medium-Term Public Investment Plan 2021-2025, it is actually the first year. The New Medium-term public investment plan was approved by the National Assembly in July 2021, at the beginning of this year, it was mainly to continue implementing transition projects.

Meanwhile, new projects are in the process of preparation and procedures, this process usually takes about six to eight months, so it will take until the end of the year to be able to disburse.

Talking about the implementation of new projects, I want to emphasize that this is a core weakness leading to the slow disbursement of public investment. In addition to the poor preparation and selection of projects, there is a situation where project selection is not really urgent, there is no medium and long-term vision, and resources are limited.

Ministries, sectors and localities dot not prepared to invest early. They are not interested in using the funds of this planning period to prepare for the projects of the next plan period, there is no synchronization between the project preparation progress and the detailed schedule delivery.

Therefore, leading to the situation of capital waiting for the project, the central government has assigned the plan, but the ministries, branches and localities have not been able to assign detailed plans, because the project has not completed the procedures.

If the quality of project preparation is low, land management is no longer good, it will lead to the need to adjust the project many times, increase costs and capital, and sometimes have to adjust investment decisions and investment policies related to the project. The procedure will therefore take longer, so it is difficult to deploy and disburse quickly.

In your opinion, how to promote disbursement of public investment capital?

Promoting the disbursement of public investment capital is a very important political task, especially in the context that the economy is struggling and we are implementing solutions to recover the economy. Identifying this, the Government has drastically implemented many solutions to promote the disbursement of public investment capital.

However, I think that, in order to speed up the implementation of public investment projects, it is not only necessary to deal with immediate problems, they must be solved radically and in the long term, by continuing to improve the state-of-the-art regulations, policies, change approach, management and use of this capital in accordance with development requirements.

We need not only remove difficulties and obstacles related to the Law on Public Investment, but also pay attention to amending and supplementing other relevant legal provisions. Ensuring a uniform, clear and continuous legal system is a prerequisite for the smooth implementation of public investment projects.

Besides, a very important factor is to prepare the project early and supplement regulations on some actions to be taken in the process of investment preparation and project implementation to ensure feasibility and availability, especially in terms of premises, so that if it is allocated capital, it can be put into implementation and disbursed early.

Regarding this issue, the Government is studying to report to the National Assembly for permission to separate the site clearance into an independent project, to be implemented with specific regulations, suitable to real conditions, facilitating the preparation, and improving the readiness and implementation of the project.

Along with that, in addition to the general requirement of managing and using public investment capital effectively, and in accordance with the objectives and subjects, in compliance with regulations on principles and criteria for capital allocation, it is also necessary to directly approach the causes of the bottlenecks that are hindering and slowing the implementation progress and disbursement of public investment capital.

If each of the above-mentioned bottlenecks and limitations are resolved, the disbursement of public investment capital will definitely be improved.

Thank you Sir!

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