JICA urges Vietnam to address late payment for ODA-funded projects

Construction workers at the metro line 1 running from Ben Thanh market to Suoi Tien park in HCM City (Photo: VNA)

Hanoi (VNA) – Chief Representative of the Japan International Cooperation Agency (JICA) Vietnam Office Tetsuo Konaka has urged the Government of Vietnam to continue scrutinizing the process of allocating funds for official development assistance (ODA) projects.

Konaka made the request at an annual press conference of JICA in Hanoi on May 10 given the late payment of some ODA-funded projects, including the urban railway line No.1 in the southern economic hub of Ho Chi Minh City with slow disbursement of ODA loans worth up to 270 million JPY (2.4 million USD) estimated at the end of March 2018.

The JICA official pointed out the cause of the problem, which lies in the government’s policy of increasing public debt control at a higher level.

In a Resolution adopted in 2012, the Vietnamese National Assembly decided to keep the public debt ceiling at 65 percent of the country’s gross domestic product (GDP).

Since 2015, the Vietnamese Government has set a maximum loan limit within one year for ODA projects under the Law on State Budget.

Konaka said Japan along with other sponsors have had high-level talks with the Vietnamese Government, bringing remarkable improvements in the budget allocation for the fiscal year 2018. 

However, the Japanese Government still wants Vietnam to allocate more funds for underfinanced projects such as the urban railway line No.1 in HCM City or others managed by the Ministry of Transport, he said. 

The official also asked the Vietnamese Government to simplify procedures to ensure the smooth and effective implementation of ODA projects funded by Japan.

As one of the biggest development partners of Vietnam, JICA will continue supporting the country’s efforts at a higher level and hopes to discuss some issues such as building a list of high-priority projects, implementing projects effectively, and promoting domestic and foreign investment in different spheres, he said.

JICA wants to offer assistance for Vietnam in both hard and soft infrastructure development including human resources training and business management improvement, he affirmed. 

Vietnam and JICA signed three agreements with ODA loans totaling at 61.8 billion JPY (some 563.6 million USD) for the fiscal year 2017. The total disbursement was 105.4 billion JPY (961.2 million USD).

JICA has focused on carrying out development cooperation programmes on three pillars, which has been promoting economic growth and increasing international competitiveness, supporting vulnerable groups and strengthening State administration.-VNA