Photo: A conference between the Ministry of Finance and localities on disbursement of public investment from foreign loans in the first nine months of 2020, October 14 (Photo: Vietnam+)
Hanoi (VNA) - At the conference between the Ministry of Finance and localities on disbursement of public investment from foreign loans in the first nine months of 2020 on October 14, General Director of the Debt Management and External Finance Department under the Ministry of Finance Truong Hung Long said "Though Official Development Assistance (ODA) disbursement rate of localities in September has greatly improved, up eight percent month-on-month, the total disbursed amount of ODA in the first nine months of 2020 is still lower than the year’s estimate at 32.43 percent while only four months remain for completing the target.”
With the completion rate at both ministries, sectors and localities, less than 40 percent of the annual estimate, the amount of ODA – foreign concessional loans that must be disbursed in the remaining 3 months of the year is very heavy.
Still, he said that ODA disbursement in localities has sped up from seven months to only three to four months. This has contributed to lowering loan interests on state budget and at the same time accelerating disbursement activities.
Low disbursement rate
According to statistics from the Ministry of Finance on disbursement of public investment fueled by foreign capital in 2020, as of September 30, regarding the central budget's targeted support for the local budget, localities have allocated 97 percent of the estimate (allocated capital), an increase of 6.6% compared to that as of August 31. However, among the aforementioned estimate, localities have requested to return to the state budget only 11.73 percent as of September 30.
Disbursement rate (including disbursement in line with domestic financial mechanism) as of September 30 reached only 29 percent of target for this year.
Photo: As of September 30, 60/62 localities receiving foreign loans have disbursed over 50 percent of their assigned estimates (Photo: Vietnam+)
General Director of the Debt Management and External Finance Department under the Ministry of Finance Truong Hung Long, as of September 30, 60/62 localities receiving foreign loans have disbursed over 50 percent of their assigned estimates, up by 18 localities compare to that as of August 31.
Drastic measures to be implemented to speed up disbursement
Given the low disbursement rate, Long requested localities to prompt investors to speed up their payment procedure and send reports to the Ministry of Finance to lower interest rate for deposits of foreign loans.
For projects with disbursement-based-on-outcomes mechanism, he requested localities to closely work with project owners to examines outcomes in each component and locality as soon as they are completed instead of waiting for a full completion.
For advance capital transferred to accounts of projects at State Treasury, he asked project owners to speed up disbursement and make payments for project activities then inform to the Ministry of Finance relevant information. In addition, regarding 20 draft on-lending contracts have been sent by the Ministry of Finance to localities for signing, Long requested localities to give feedbacks at the soonest.
The Ministry of Finance plans to carry out a number of measures to speed up disbursement rate in localities. Long said, “the Ministry will review and work with each locality and project with huge accounts to accelerate disbursement rate.”
Besides, the Ministry looks to have dialogues with partners to facilitate direct payment.
“The Ministry of Finance has also instructed functional units to quickly process capital withdrawal applications eligible for payment of projects and closely coordinate with localities to sign on-lending contracts as well as comment on the adjusting the investment policy of the projects,” said Long./.
