Party chief demands investment answers

Trong didn’t beat around the bush when he said Vietnam’s public investment remained “ineffective” and “is undermining the country’s socio-economic development.”

“How has the MPI’s fight against scattered public investment in localities and ministries been implemented? Does the project-asking and –giving mechanism exist? These issues need to be made clear as they are related to money and interests. The MPI needs to make an action plan on managing public investment,” Trong said.

MPI Minister Bui Quang Vinh said Vietnam’s public investment in 2012 had “witnessed an important stride.”

“The 96.5 per cent of total public investment capital [VND240 trillion ($11.53 trillion)] for projects in 2012 had been controlled strictly. Total capital was only used for urgent and key projects, while new projects could only be financed after they were stringently appraised,” Vinh said.

“With this method of managing public investment, Vietnam’s public investment management will be remarkably improved by 2015,” he said.

He ascribed this achievement to the governments’ Instruction 1792/CT-TTg dated October 15, 2011 on strengthening management of state budget and government bond investment.

Under the instruction, ministries, agencies and localities must make their own investment portfolios with the most essential projects. The portfolios and capital are then submitted to the government and MPI for approval.

Before the Instruction 1792 was applied, the government applied a mechanism on decentralising public investment, in which localities and ministries were empowered to design projects, with capital sourced from the state coffers. However, this mechanism provided ineffective.

At the 13th National Assembly’s fourth session in October-November, 2012, Vinh announced that the government would use some VND180 trillion ($8.65 billion) for its public investment in 2013, down from VND240 trillion ($11.53 trillion) in 2012 and VND341.6 trillion ($16.42 billion) in 2011.

“The VND180 trillion ($8.65 billion) will be far lower than localities’ huge demand. However, it reflects the government’s big efforts given its limited budget,” Vinh said.

The MPI said the government would minimise the construction of new projects in 2013 and only imperative projects would start construction this year.

It said these projects would be in such sectors as national security and defense, agriculture, forestry and fisheries, national-level projects and counterpart funded projects backed by official development assistance.

“New projects for 2013 must be in approved planning and their capital must be appraised in line with the Instruction 1792. This is to prevent wastefulness in using state capital and ensure projects would be completed as scheduled,” said MPI deputy minister Cao Viet Sinh.

Vinh said the MPI in 2013 would submit a draft Law on Public Investment to the National Assembly seeking opinions from delegates for the first times. It was expected that the law would take effect on January 1, 2014.