Urgent solutions needed to speed up public investment disbursement from foreign loans ​

Hanoi (VNA) – As of August 27, five out of 62 localities nationwide have submitted requests to give back official development assistance (ODA) totalingover 1.61 trillion VND (700 million USD). But in the remaining localities, the disbursement of the capital is predicted to be at a low level.

In Hanoi, the municipal People’s Committee has requested relevant agencies to reduce the ODA plan for 2020 by over 1.75 trillion VND to more than 3.48 trillion VND.

The reason is difficulties in the implementation of the ODA projects, such as the procedures to adjust the Nam Thang Long-Tran Hung Dao section of the urban railway Line 2 project, a project to strengthen sustainable urban transport for the Hanoi urban railway Line 3 and vocational schools for which borrowing contracts are unable to be signed again, said Nguyen Doan Toan, Vice Chairman of the city People’s Committee at an online conference held by the Finance Ministry on August 31.

Obstacles from procedures

In 2020, Hanoi is allocated nine ODA projects worth nearly 7 trillion VND, including more than 5.23 trillion VND of ODA. Besides, the ODA left unused from 2019 is 1.01 trillion VND.

Toan said that as of the end of August, Hanoi had disbursed nearly 1.66 trillion VND, reaching 27.75 percent of the yearly target, including 112.3 billion VND of ODA, fulfilling25.07 percent of the plan. Besides, the 340 billion VND of ODA left from 2019 was disbursed, equivalent to 39.56 percent of the plan.

He said that despite impact of COVID-19 pandemic, the city has asked investors to apply measures to prevent the spreading of the pandemic and ensure progress of ODA projects at the same time.

However, the problem lies in legal procedures, including the suspension of bidding package No. 9 as the agreement with the French Government on a 20 million EUR loan has yet to receive the legal efficiency, and a contract between the Finance Ministry and the Hanoi administration for the loan has yet to be signed again.

An overview of the online conference on the disbursement of public investment sourced from foreign loans of the Government in the first eight months of 2020 held by the Ministry of Finance on August 31 (Photo: VietnamPlus)

At the same time, the central province of Thua Thien-Hue also reported that it has disbursed only 375 billion VND out of the total of more than 1.37 trillion VND of capital it has been allocated in 2020, or 27 percent.

A representative of the province explained that the budget plan for 2020 as well as guidelines for the implementation of a number of projects were issued late.

Meanwhile, investors have been confused by the complicated procedures of spending ODA, said the representative.

Five out of 62 localities requests to give back ODA

At the conference, Deputy Minister of Finance Tran Xuan Ha said that as of August 27, localities nationwide had disbursed 8.41 billion VND of the capital they were allocated from foreign sources in 2020, completing 21.86 percent of the assigned target, representing a rise of 9.14 percent compared to the disbursement reported on June 25. Meanwhile, 5.76 trillion VND of foreign loans that were re-borrowed by localities had also been disbursed, fulfilling 29.3 percent of the estimate.

So far, the Ministry of Finance has received requests by five localities on the returning of the capital with total value of 1.61 trillion VND, including 953 billion VND of allocated and 664 billion of re-borrowed capital. Besides, other localities that did not ask for reduction in the capital plan are likely to record a low level of disbursement, he said.

Ha pointed her finger to shortcomings of localities in the work. He said that they have focused too much on the disbursement of capital in 2019 and the slow processing of administrative procedures.

He also named a number of other reasons behind the situation, including slow bidding process and ground clearance, and impact of COVID-19 pandemic.

Ha asked localities to promptly speed up the disbursement of public investment from foreign resources in 2020 by making detailed allocation of the capital to each project, while reporting to the Ministry of Planning and Investment and Ministry of Finance on the amount they fail to allocate or use.

At the same time, the localities should ask investors of the projectswith extremely large balance in their accounts and slow report of spending to promptly complete procedures to submit documents related to the spending.

The localities should work with the management units of projects and programmes to review capital for each project. The Ministry of Planning and Investment as well as the Ministry of Industry and Trade will also adjust mid-term investment plan for the rural power supply programme soon and inform localities of the amendments of estimate for 2020, he said.

The official also underlined that in order to complete the disbursement tasks for 2020, the whole political system from the Government to ministries, sectors and localities should roll out concerted and drastic measures.

Ha also pledged that the Finance Ministry will coordinate with localities to seek solutions to arising problems. He also expressed his hope that localities will accompany theproject owners inremoving obstacles facing the projects to complete the disbursement target for the year./.