State budget hurt by project delays

“Projects that are implemented slower than planned continue to form a high ratio of the total number of projects being implemented,” said Cao Van Ban, director of the Ministry of Planning and Investment (MPI)’s Investment Appraisal and Supervision Department.
According to statistics cited by Ban, 9.5 per cent of government projects were behind schedule last year, compared to 14.7 per cent in 2003.
“This is a major issue of concern because slow implementation is one of the main causes of increased costs and inefficient investment,” he said.
The MPI reported that only 5.7 per cent of the projects belonging to Group A, a category that covers key projects requiring the government’s approval, are expected to begin operation in the near future.
“This is too low a ratio, demonstrating that the implementation process of Group A projects has been lengthened to an average of 15 years. It is an issue of particular concern that demands focused attention soon,” said Ban.
About 49 per cent of Group A projects are behind schedule, according to the MPI.
“Slower-than-required project implementation has delayed the commencement of new production units, increased costs to project management boards, raised interest rates of loans and especially added costs for hiring foreign experts in official development assistance (ODA)-financed projects,” Ban said.
Participants at the conference agreed that difficulties with land clearance and compensation were the biggest reasons for the delays.
They also pointed to the incompetence of consulting organisations and project developers and the lengthy approval process, along with the slow disbursement of state-funded capital.
Ban stressed that cumbersome administrative procedures had often made the project appraisal process too long and subject to public criticism.
“The government has a specific timeframe that project appraisal bodies have to abide by. Yet the matter is how project developers adequately prepare documents for submission to relevant ministries. If the documents are properly prepared, delays will be shortened,” Ban said.
In practice, many documents have to be returned to project developers for revision, often two or three times, he said.
Furthermore, under current regulations, relevant ministries and agencies are usually asked to give their opinions on the projects, a process that also consumes too much time.
“For such organisations, there are deadlines for their replies. But in several cases, we cannot urge them to do so due to the sensitive nature of the projects,” he added.
Ban said the MPI had authorised provincial authorities to undertake most appraisal work. However, authorities are expected to encounter the same problems because the procedures remain valid.