Localities innovating to boost public funding disbursement

According to Decision No.1012/QD-TTg released in August on assigning medium-term public investment plans of the central budget for 2021-2025, nearly VND31.4 trillion ($1.36 billion) of the Ministry of Transport’s medium-term capital is set to be transferred to seven localities across the country.

The government is urging acceleration of infrastructure ventures in order to boost socioeconomic development, photo Le Toan

The prime minister has asked ministries to direct the localities – Hanoi, Hung Yen, Bac Ninh, Ho Chi Minh City, Dong Nai, Binh Duong, and Long An – to detail every project and task of the spending plan, which is hoped to help meet annual spending targets.

Instead of immediately assigning the capital plan and then trying to disburse, plans are now considered carefully based on demand and capacity before capital allocation.

“Strengthening decentralisation for localities is a flexible management solution of the government to enhance the efficiency of public investment disbursement,” said Deputy Minister of Planning and Investment Tran Duy Dong.

The $1.36 billion will be partly allocated to the projects for Ring Road No.4 in Hanoi and Ring Road No.3 in Ho Chi Minh City. Such decentralisation will contribute to speeding up disbursement.

“The government and the prime minister have boosted decentralisation for localities, especially in large-scale projects. Thereby, localities will utilise their own capital, as well as mobilise the private sector – for example, in the form of public-private partnership or build-operate-transfer models that we are applying everywhere,” Dong said.

Investment portfolios, preparation, construction, and settlement are seen as the most important tasks to boost the disbursement of public investment.

Ninh Binh province, one of the localities with the highest rate of public disbursement, is having success in investment portfolios, which is shortening construction time and speeding up disbursement. The project road connecting National Highway 12B with National Highway 21B has a total investment of nearly $5.5 million with a total construction time of 33 months. However, after reviewing and rearranging capital sources, the project completion time was shortened to just six months.

“Thanks to allocating sufficient capital for the contractors, they can approve the payment soon for construction,” said Ninh Quang An, deputy general director of Cuong Thinh Thi Investment Group JSC which partakes in the project.

Vu Van Ha, vice director of Ninh Binh’s Traffic Works - Construction Investment Project Management Board, said, “Currently, the capital has been allocated, so we will set up machinery and equipment, trying to complete the construction this year.”

Ninh Binh Department of Transport is holding weekly meetings to review progress and resolve difficulties quickly, according to Bui Tien Thanh, director of the department’s Project Management Unit 1.

By the end of August, Ninh Binh had disbursed more than 53 per cent of the total public investment capital for the year ($262.1 million), one of the highest disbursement rates in the country. A local government representative said that this year, they had focused on making a list of investment projects prioritising high-performance and eliminating those not eligible for disbursement.

In addition to the investment portfolio, the province also asked departments and authorities to reduce investment procedures by at least 20 per cent to set up special working groups to speed up site clearance.

According to the Ministry of Planning and Investment, in the first eight months of this year, 39.2 per cent of the total yearly plan’s public investment $23.76 billion has been disbursed, which is modest compared to the same period last year (40.6 per cent). In addition to the government’s strong measures, localities are also making innovations in implementing and disbursing public investment.

Many localities have returned public investment to ensure the efficiency of disbursement. Localities with good disbursement rates have the political system’s strong support, an innovative management mindset, and promptly review and transfer capital to projects making better progress.

The government has also implemented other measures to speed up public spending. In the last few months, the prime minister has established six working groups to continue inspecting and urging ministries and localities with low disbursement rates to provide measures to speed up disbursement for the rest of the year.

Deputy PM asks Hanoi to accelerate public investment disbursement Deputy Prime Minister Le Van Thanh has asked Hanoi to clarify the causes behind the sluggish disbursement of public investment.

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