Accelerating disbursement of over VND70 trillion of public investment capital
tranthuy02 10-09-2021, 13:27
Accelerating disbursement of over VND70 trillion of public investment capital

Contractors carry out construction of Vinh Hao - Phan Thiet expressway project.   

NDO - Accelerating the disbursement of public investment capital is a crucial and urgent task contributing to the stimulation of aggregate demand and economic growth as well as creating more jobs and improving workers' lives.

According to the General Statistics Office, the country’s growth rate for public investment capital in August decreased by 7.1% compared to the previous month and fell by 24.7% compared to the same period in 2020. The social distancing measures applied in many localities to control the COVID-19 pandemic have affected the implementation of public investment projects.

Only 40.6% of the year’s public investment disbursed

The disbursement of investment capital from the state budget in the first eight months of 2021 reached only 40.6% of the plan assigned by the Prime Minister, lower than the same period in 2020 (46.41%). Public investment activities in 2021 faced many difficulties in localities with COVID-19 outbreaks.

According to the Ho Chi Minh City Statistics Office, almost all construction projects had to suspend activities in August and only projects eligible for “3 on-site” were allowed to continue construction during the social distancing under Government Directive 16. In addition, the suspension of several of construction material manufacturers and the increasing prices of construction materials also affected the bidding and selection of contractors.

During the eight-month period, Ho Chi Minh City disbursed public investment of over VND13.2 trillion, equivalent to 37% of the year’s plan and down more than 27% from the same period last year. The disbursement volume in August was only equivalent to 42.4% of the figure for July and equal 13% of that from the same period last year.

Key projects in the city had to be temporarily suspended or experience reduced capacity. The technical operation of urban Metro railway project No. 1 (Ben Thanh - SuoiTien) had to be rescheduled to mid-2022 instead of the end of this year due to the slowdown in progress.

The Ministry of Transport disbursed over VND22.3 billion of public investment by the end of August, reaching 52% of the whole year plan, higher than the national average and higher than the same period last year (48.4%). The ministry still has over VND20.9 trillion needed to be disbursed by the end of this year.

Amid this situation, on September 1, the Ministry of Transport established a special working group, led by Minister Nguyen Van The, to accelerate the implementation and disbursement of public investment capital. The working group will strictly handle investors, project management boards, and units who intentionally cause difficulties or delays to the progress of capital allocation and disbursement of public investment while replacing officials with poor capacity and negative acts in public investment management.

Big challenges for the last months of the year

Deputy Minister of Planning and Investment Tran Quoc Phuong said that this year's public investment activities are affected by many new factors due to the COVID-19 pandemic, including obstacles in the transport of construction materials and the isolation of a number of consultants and workers.

Notably, the increase in input material prices has greatly affected the construction progress and financial plans for public investment projects. Meanwhile, localities must focus on epidemic prevention and control, so they are dispersed in directing and disbursing public investment capital.

In addition, 2021 is the first year of a medium-term investment planning period, so the first months of the year mainly focus on implementing the transitional steps of the previous period, while new projects for the 2021-2025 period must wait for the National Assembly to approve the medium-term investment plan.

As usual, disbursement of public investment capital will accelerate in the last months of the year. But this is an extremely challenging task in the context of the short time left with so much work to be done.

The Ministry of Planning and Investment has asked for the Prime Minister’s assignment for the medium-term public investment plan for the 2021-2025 period, including many projects about to be implemented, creating the conditions to release more than VND70 trillion of public capital. At the same time, the ministry reported to the Government macro problems need to be removed.

Regarding the land clearance, the Government has established a working group to work on this issue and separate land clearance from public investment projects. For ODA-funded projects, the Ministry of Planning and Investment has submitted to the Government a draft to replace Decree 56/2020/ND-CP, which reduces many administrative procedures for ODA projects.

“Hopefully these changes will boost capital disbursement in the last months of the year and early 2022. However, breakthrough solutions to promote disbursement of public investment depend much on the direction and management of projects at ministries and localities. The Ministry of Planning and Investment has sympathy for localities, but they should pay attention to immediately boosting the disbursement of public investment depending on the specific conditions of each locality and the effects of the pandemic,” said Deputy Minister Tran Quoc Phuong.

According to the Ministry of Planning and Investment, the disbursement of public investment capital has been carried out quite well in a number of ministries and localities allocated with large capital, helping to compensate for the overall results of the whole country. Basically, large projects and projects of national importance, although facing some difficulties, are still underway and achieving positive results.

It is expected that by the end of September, the Ministry of Planning and Investment will have an overall report to submit to the Government on the results of public investment disbursement. If a ministry or locality needs additional capital, the Ministry will consider the transfer of capital between them.