Hanoi accelerates medium-term public investment disbursement

06:00 | 07/05/2020 Economy

(VEN) - In order to fulfill public investment targets and minimize the impact of the Covid-19 pandemic on economic growth, the Hanoi People’s Committee has issued a document on speeding up disbursement progress of its five-year medium-term public investment plan (2016-2020) and of its 2020 plan.

hanoi accelerates medium term public investment disbursement

No adjustments of 2020 plan

Out of 207 city-level public investment projects this year, 123 estimated at more than VND13.94 trillion were left over from 2019, and 84 new projects have capital of VND1.92 trillion. The city has opened bidding for 30 of the 84 projects, but the disbursement progress remains slow. In the first three months of 2020, investors and contractors completed 18.8 percent of the public investment volumes with a disbursement rate of 9.8 percent, higher than the 7.2 percent level of the same period last year.

At an April 8 meeting on promoting disbursement of public investment capital in 2020 and on the development of Hanoi’s medium-term public investment plan for the next five years, the director of the capital’s Department of Planning and Investment Nguyen Manh Quyen said the greatest obstacle to disbursement is the delay in site clearance. Quyen also blamed the “sense of responsibility of the department’s staff implementing investment procedures” as not being very high.

In this difficult time of the Covid-19 pandemic, a timely disbursement of investment capital will help contractors complete their projects early, and is seen as a positive solution to stimulate economic growth and ease difficulties for businesses.

The Hanoi People’s Committee has said it would not adjust this year’s public investment plan, including VND22 trillion of its planned capital, VND11 trillion forwarded from the previous disbursements, and about VND6 trillion assigned from the city’s 2019 budget balance. “We need to quickly remove difficulties and accelerate public investment progress, the city will not adjust public investment plans, even though our budget revenue will be affected,” said the chairman.

Hanoi will strive to balance its budget revenue by diverting capital from slow or less effective projects (about VND2 trillion), from the city’s 2019 budget balance, salary reform and reserves. In addition, it will propose to the Party Central Committee a budget retention ratio at 35 percent, a specific mechanism to shorten site clearance procedures like the one adopted by Ho Chi Minh City, allowing Hanoi to designate contractors and to disburse ODA projects without influencing the total public investment.

Hanoi’s city Party Secretary Vuong Dinh Hue said the Covid-19 epidemic has affected the city’s trade, production activities and exports. Therefore, boosting public investment is an urgent task.

Hue asked officials and departments of the Hanoi Party Committee to set up a working group to speed up disbursement progress, defining responsibilities of related agencies as well as deadlines for site clearance procedures. He also directed agencies to promulgate construction regulations given the prolonged epidemic to accelerate the works.

Accelerating medium-term disbursement

Hanoi City People’s Committee data show that the city’s five-year medium-term public investment plan (2016-2020) was updated and adjusted on December 4, 2019 with total capital of more than VND107.3 trillion.

From the beginning of the medium-term period, the city has allocated more than VND101 trillion. The remaining capital of nearly VND6.3 trillion will continue to be allocated in 2020 once plans for public investment projects and tasks are completed in accordance with regulations.

However, accumulated disbursement in this period until January 31, 2020 reached only VND67.49 trillion, equal to 85.3 percent of the assigned plan in the 2016-2019 period and only achieved 62.9 percent of the total plan of medium-term public investment capital approved by the Hanoi People’s Council.

Thus, the remaining workload of 2020 - also the last year of the term - is very heavy, requiring departments, agencies, people’s committees of districts, towns and investors to accelerate the disbursement progress.

To do so, the city asked agencies and units to develop the 2020 public investment plan compatible with the Covid-19 epidemic; review projects in prioritized order; promptly complete investment procedures, and ensure a capital allocation plan in 2020 for key projects before June 30, 2020.

The city also urged investors to cooperate closely with districts and towns to speed up compensation, site clearance, design, cost estimates and bidding; complete payment documents within four days from the time of acceptance; and implement disbursement, site clearance, and payment in a flexible manner.

The Hanoi Department of Planning and Investment is assigned to coordinate with the city’s Department of Finance, state treasury and related units to inspect and evaluate the implementation of the public investment plan; ensure accelerated progress of projects; and strive to disburse all remaining public investment capital in 2020.

Nguyen Hanh