Delays still apparent despite progress

The latest report from the Ministry of Finance (MoF) on state budget investment spending in the first five months, and estimated implementation in the first half of 2023, revealed that the disbursement of public investment was VND215.6 trillion ($9.2 billion), or 30.49 per cent of the yearly plan.

Delays still apparent despite progress, illustration photo/ Photo Le Toan

This was higher than the same period last year when it was 27.75 per cent of the allocated plan, and included $9 billion from the local budget and $200 million in foreign capital.

Nine ministries and 32 localities reported a disbursement rate at more than 30 per cent of the plan. However, numerous ministries and agencies did not report any disbursement, such as the Committee for Ethnic Minority Affairs, Vietnam State Auditor, Vietnam Lawyers Association, Vietnam National Tobacco Corporation, and Vietnam Cooperative Alliance.

Numerous authorities at all levels disbursed too little, including the Ministry of Labour, Invalids, and Social Affairs; Ministry of Information and Communications; Ministry of Health; the Government Inspectorate; and the localities of Quang Tri, Tuyen Quang, and Danang. The MoF revealed that 39 of 52 ministries and agencies and 12 provinces reported a disbursement rate of less than 20 per cent.

In the transport sector, despite spending almost $1.5 billion out of $4 billion in yearly allocation, doubling the amount on-year and much higher than the performance last year, numerous projects saw a delay compared to the plan.

Bui Quang Thai, who is the director general at the Ministry of Transport’s (MoT) Department of Planning and Investment, said, “The first half’s disbursement focused on the first phase of the North-South Expressway and contract advances of the project’s phase 2.”

Specifically, projects in the expressway’s first phase have already spent $298 million out of $723.4 million in the total. Some reported very high disbursement rates, like Vung Ang-Bung at 115 per cent and Van Ninh-Cam Lo 102 per cent, while there were others with disbursement rates higher than 90 per cent.

However, of this, some projects reported delays, such as National Highway 45-Nghi Son, Cam Lo-La Son, and Nghi Son-Dien Chau.

Projects in the North-South Expressway’s second phase have already spent $740.4 million out of the planned $1.94 billion.

Dinh Cong Minh, director of Thang Long Project Management Unit, said, “The two component projects of Bai Vot-Ham Nghi, and Ham Nghi-Vung Ang missed the disbursement plan in June due to challenges in the process of site clearance, compensation, resettlement support, and technical infrastructure relocation.”

In addition, according to the MoT’s Transport Construction Investment Management Authority, the construction progress of traffic projects has been significantly affected by the shortage of materials, especially for expressway projects in phase 2.

“In the second half of the year, the remaining capital for disbursement is too large at about $2.5 billion, while most expressway projects have just started construction and the output value is not very high. To disburse the remaining capital as much as possible, we need the efforts, determination, and innovation in the implementation of investors and project management units,” said Thai from the MoT.

According to the MoF, there are many reasons for the delays in disbursement. “The planned capital in 2022 extending to 2023 has just been approved. Relevant authorities are disbursing this capital, so some projects have not yet used the capital in the 2023 plan,” it said.

Meanwhile, projects using official development assistance that must both comply with foreign regulations and ensure domestic procedures are spending a lot of time doing procedures for extending agreements, adjusting investment in-principles, and tweaking projects, the MoF added. Equipment procurement projects, especially in the medical sector, have “wasted too much time” on selecting price appraisal units and build bidding documents.

In addition, there are some obstacles in the implementation of IT application projects, especially digital transformation projects, according to Decree No.73/2019/ND-CP on the management of investment in IT applications. To speed up disbursement in the second half of the year, the MoF asked authorities at all levels to continue implementing key tasks and solutions to speed up allocation and disbursement of public investment.

For the capital plan extending the implementation and disbursement, the MoF in May proposed that investors accelerate disbursement of the above capital plan until the end of this year. In the second half of the year, as planned, about $21 billion of public investment needs to be disbursed. Economist Can Van Luc calculated, “If 95 per cent of the total capital is disbursed, state investment can increase by 30 per cent, total social investment capital will increase by 13.2 per cent, and it would contribute 2 per cent to GDP for the year.”

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