PM tries to boost ODA disbursement

According to the Government Office, Prime Minister Nguyen Tan Dung just signed a decision allocating an additional VND3.6 trillion ($171 million) in matching funds for ODA projects. 

Additionally, the prime minister also ordered central and local authorities to arrange enough corresponding funds for ODA projects next year, with the aim of boosting disbursement of ODA nationwide.

The prime minister’s decisions come from a more determined effort to keep commitments to international donors, many of whom have complained about the slow pace of ODA projects.

According to the Ministry of Planning and Investment (MPI), around $21 billion of ODA had yet to be disbursed by the end of 2013, of which $8 billion is planned to be completed this year.

The MPI reported that only $2.51 billion in ODA funds were disbursed in the first seven months of this year, meaning that time is running out for disbursement of the remaining $5.5 billion.

As most ODA goes toward infrastructure projects and poverty reduction, slow disbursement is adversely affecting the efficiency of ODA use in Vietnam.

Ho Chi Minh City for instance announced that slow capital disbursements have delayed ODA projects. The city currently has ten donor projects registered, with total investment of nearly $6 billion, of which Vietnam owes a corresponding $1 billion.

The Ministry of Transport (MoT), the biggest ODA recipient in Vietnam, reported that corresponding fund disbursement into ODA transportation projects in Vietnam has met only one-third of demand, resulting in the tardiness of important projects such as the Noi Bai-Lao Cai expressway in the north and the Ho Chi Minh City-Long Thanh-Dau Giay expressway in the south.

According to the MoT, the lack of corresponding funds has also led to delays in site clearance and land compensation for transportation projects.