Over 2.56 bln USD of ODA, soft loans committed in 6 months hinh anh 1Ho Chi Minh City - Long Thanh - Dau Giay Highway was built with JICA's ODA loan (Photo: VNA)

Hanoi (VNA) – Total official development assistance (ODA) and concessional loans committed for Vietnam was over 2.56 billion USD in the first half of 2016, surging by 61 percent year on year.

The disbursed ODA and concessional loans during the reviewed period declined by 4 percent from a year earlier to about 1.85 billion USD, including 1.75 billion USD of ODA loans and 100 million USD of non-refundable ODA, according to the Ministry of Planning and Investment (MPI).

At a meeting of the National Steering Committee for ODA and preferential loans in Hanoi on June 8, the MPI blamed the slow disbursement on institutional obstacles, specialised regulations and standards, adjustments during project implementation, procedure differences between Vietnam and loan providers, slow preparation of corresponding capital, and sluggish site clearance for projects.

The biggest hindrance is that the disbursed sum must not exceed the planned amount as stated in the National Assembly’s resolution on the State budget estimates this year, the ministry noted.

From 2011 to 2015, 45 percent of the ODA and preferential loans were earmarked for projects by the Ministry of Transport (MoT). The ministry said that it currently has 36 projects funded by ODA and concessional loans, which have been disbursed smoothly for 18 projects but slowly for seven others.

By the end of Q1 this year, more than 151 trillion VND (6.76 billion USD) of the 237.97 trillion VND (10.66 billion USD) ODA pledged for transport projects was disbursed. The disbursed corresponding capital was over 33 trillion VND (1.48 billion USD) out of the 71.9 trillion VND (3.22 billion USD) to be disbursed.

The MoT signed agreements on some 890 million USD of ODA loans for six projects during the six-month period through to June.

It noted that its ODA-funded projects are large-scale projects with the participation of foreign contractors. They also have major impacts on the society and economy. Hence, slow ODA disbursement for those projects will seriously affect the duration of construction and cause costs to spiral.

At the meeting, Deputy Prime Minister Pham Binh Minh asked the national steering committee for ODA and concessional loans to streamline administrative procedures in project implementation.

The MPI and the Ministry of Finance (MoF) should fine-tune related regulations while taking into account the development level of each locality benefiting from ODA projects to ensure the local budget balances.

The State Bank of Vietnam, the MPI, the MoF, and the Foreign Ministry need to seek an appropriate roadmap for ODA mobilisation as Vietnam will no longer receive ODA and concessional loans in the near future.

Minh also told the MPI and the MoF to ask the Government and the National Assembly Standing Committee to allow aligning the ODA disbursement with suppliers’ loan provision progress.-VNA