Foreign loan disbursement remains sluggish in first five months

Hanoi (VNA) - The Government’s Resolution No 45/NQ-CP, dated April 16, stated that accelerating the implementation and disbursement of public investment is one of the important and urgent tasks to help promote growth, job creation, and incomes for labourers and create production capacity. However, the five-month disbursements by ministries and sectors were assessed as very low.

129 proposals for public funding to be revoked

At the June 11 meeting with ministries and sectors to review the disbursement of foreign-funded public investment capital, Deputy Minister of Finance Tran Xuan Ha stressed that as investment disbursement influences economic growth, the good disbursement of official development assistance (ODA) and foreign concessional loans will be helpful for the country to fuel growth and fulfill the financial and budgetary tasks assigned by the National Assembly.

Given this, the foreign loan disbursement rate of just over 7 percent in the five months is “too low and worrying,” he said.

Truong Hung Long, Director of the Ministry of Finance’s Debt Management and External Finance Department, cited statistics as showing that as of June 10, only 1.253 trillion VND (54.6 million USD) of the foreign-funded public investment capital earmarked for 2021 had been disbursed, equivalent to 7.53 percent of the target.

Only five out of the 13 ministries and sectors have moved to disburse public investment from ODA and foreign loans for this year, he noted, pointing out that this is partly because many ministries and sectors are still working to allocate the 2020 funding.

Long added as of June 10, his department had received and handled 129 requests for public funding revocation.

Sluggish settlement of procedures

The Department of Debt Management and External Finance said the incomplete settlement of investment procedures for projects is also among the reasons behind the slow disbursement.

Many projects that have been allocated capital and completed investment procedures, meanwhile, have been slow in site clearance and resettlement.

Obstacles in the bidding and contract approving processes and difficulties in relation to contractors or sponsors have also hampered disbursement.

The adjustment of investment policies and loan agreements is also among the factors hindering the disbursement progress, Long noted.

Enhancing capacity of relevant agencies

To speed up the disbursement of public investment, including ODA and foreign concessional loans, the Ministry of Finance proposed the Government and the Prime Minister to request ministries and sectors to promptly carry out solutions within their jurisdiction and closely coordinate with relevant agencies.

Long said ministries and sectors should also enhance the project implementation capacity of management agencies, investors, and project management boards.

The agencies directly managing public investment projects need to work closely with the Ministry of Finance, the Ministry of Planning and Investment, and related agencies so as to deal with problems arising, especially in projects with investment policies and loan agreements amended

At the meeting, Deputy Minister Ha pledged continued coordination with ministries and sectors to remove difficulties and carry out uniform solutions to accelerate the disbursement, adding that his ministry will step up applying information technology to the disbursement of ODA capital and foreign concessional loans.

It also expects other ministries and sectors that manage public investment projects will keep a close watch on and take timely action to address obstacles, thereby helping to achieve the disbursement targets for 2021, he said, stressing the need for concerted efforts by the entire political system, from the Government, ministries, and sectors to localities./.