10:05 | 29/09/2016 Investment
(VEN) - Public investment capital disbursement has been slow in the beginning months of the year, making significant impacts on many industries in particular and economic growth in general. Numerous solutions to accelerate public investment capital disbursement conducted by the government and ministries have been implemented in order to complete this year’s economic growth target.
As reported by the Ministry of Planning and Investment, this year’s total investment capital approved by the National Assembly reached VND255 trillion. In the first five months of the year, government agencies disbursed more than VND83 trillion, equal to around one-third of the set plan. In particular, disbursement of capital raised via government bond sales in this period accounted for only 15 percent of the year’s plan.
The disbursement of state budget for public investment projects reached an estimated VND92.21 trillion by July, completing 36.7 percent of the year’s plan, much lower than that of 47 percent in the same period last year. In addition, the disbursement of capital raised via government bond sales and official development assistance stood at nearly VND12 trillion and about US$2.3 billion, respectively.
Slow disbursement was due to slow submission of budget plans by some ministries, agencies and localities, while administrative procedures remained complex. There were also others reasons that should be taken account including incomplete government guidelines on project assessment and approval, difficulties in land clearance, and incompetent contractors.
Some local leaders mentioned the inadequacies in the disbursement of public investment capital. 2016 is the first year investors must implement construction and investment procedures as prescribed in the Construction Law and the Public Investment Law. Therefore, they have faced many difficulties and could not open accounts for disbursement.
The prime minister made his opinions about subjective and objective factors leading to this year’s slow public investment capital disbursement in a meeting with the Ministry of Planning and Investment and relevant agencies. Therefore, each ministry and department must review responsibility of officials in charge of public investment, while having strict sanctions to handle delays in disbursement.
Ministries, departments and localities must disburse nearly VND163 trillion in the remaining months of the year in order to accomplish the plan. Therefore, promoting disbursement for necessary projects is mentioned.
To increase the disbursement rate of public investment capital in the remaining months of the year, economist suggested ministries, departments and localities to accelerate project assessment and approval,
According to the Ministry of Planning and Investment, the Ministry of Construction and relevant ministries have to be involved and should promulgate standards and norms as a basis for the approval of investment decisions. In particular, drastic solutions combined with strict sanctions to ensure quality for public investment projects are necessary such as strengthening inspection, overseeing the implementation of public investment plans, strictly handling organizations and inpiduals violating the provisions of the law and dealing with delays in disbursement.
The Ministry of Finance representative proposed that in addition to removing obstacles in the implementation of new laws such as the Public Investment Law, the Construction Law and the Bidding Law, projects using standby budget, exceeding state budget revenues and implementing investment in a shortened time should be allowed. In addition, the Ministry of Construction needs to amend and supplement documents guiding management mechanisms for the national target program during the 2016-2020 period.
The prime minister asked the Ministry of Planning and Investment to review and submit a government’s report to the National Assembly on state capital plan for 2017. As of September 30, 2016, projects with less than 30 percent of capital disbursement in 2016 will not receive additional capital in 2017.