Accelerating disbursement of public investment capital to realize growth goals

Economist Nguyen Minh Phong

By the end of the first quarter of 2022, there is still more than VND50,000 billion of unallocated public investment capital; the disbursement rate is slow, reaching just over 11%, lower than the same period last year, 29 units have not disbursed any money. What do you think is the cause of this situation?

There are many reasons for the delayed disbursement of public investment capital in the first quarter of 2022, including many objective factors such as the delay in disbursement due to a number of new construction projects in the process of completing bid procedures, marking the bid documents, and negotiating the contract.

Besides, there is also the reason that the investor, ministries, central and local agencies have not been drastic in leading, directing and promptly promulgating solutions to speed up the construction progress due to the organization and implementation. In this group of reasons, it is undeniable that there are still factors that are afraid of responsibility, or some people think that they don’t benefit, so they are stagnating.

Notably, an objective factor affecting the disbursement progress, which is similar to the first months of 2021, is the increasing price of construction materials, iron and steel, sand and stone, and cement. That makes the progress of the project delayed, the construction is "moderate" to wait for the price reduction because if the contractor worked the construction, they would suffer a loss compared to the price at the winning bid, affecting the financial status of the project.

Promoted public investment will create a motivation for economic growth and development. In particular, focusing on investment in key national transport projects will be the "prey capital" to lead other economic regions and the whole society. What is your opinion on this matter?

It must be said that the delayed disbursement of investment capital will bring about consequences in many aspects, from finance to economic growth, jobs, and income.

Therefore, one of the revolutionary points of the medium-term public investment plan in 2021-2025 is to sharply reduce the number of investment projects in the period.

Capital is prioritized for large-scale key projects, creating new development space; strengthening regional linkages, and improving the competitiveness of the economy and regions and localities.

With a plan to sharply reduce the number of projects for key investment, focusing on building a synchronous and modern infrastructure system in both economic and social terms, completing national key transport works, by 2025, basically completing the North-South expressway in the East; Ring Road 3, Ring 4, dynamic areas in Hanoi and Ho Chi Minh City; route connecting the South Central region with the Central Highlands, investing in infrastructure for the development of the Northern mountainous region, highways and inland waterways works for the Mekong Delta region, ensuring a harmonious, reasonable and effective investment structure among regions, both increasing the growth motivation and ensuring social security.

The appearance of economic infrastructure will have breakthroughs in the next five years, promoting fast and sustainable economic growth in the medium and long term.

In order to be able to complete the disbursement plan for public investment, especially in key transport projects in the context of the current skyrocketing price of raw materials, which solutions should be focused on?

With the remaining months of 2022, the task of disbursing public investment capital is still a lot, posing a challenge for all ministries, branches and localities.

However, it must be affirmed that the Government and the Prime Minister have been very aggressive in promoting the disbursement of public investment capital since the first months of the year. Most of the solutions are available and the work which we need to do is to drastically implement and follow the proposed solutions. At the same time, the correct identification and timely handling of public investment bottlenecks are important tasks, thereby finding ways to remove the bottlenecks and accelerate the disbursement of public investment.

The most important thing is the responsibility of the head, including conditions of participation and if there is a violation, it must be handled immediately. In fact, public investment is one of the areas with the most loss, waste, negativity and corruption. Therefore, it is necessary to increase the responsibility of the head and take strict and drastic measures to avoid this situation. At the same time, it is necessary to avoid increasing public debt as well as a budget imbalance.

In addition, it is necessary to create a mechanism to implement flexible regulations in adjusting projects, adjusting capital and adjusting decentralization faster, especially for key transport projects. It is not possible to apply a common measure for all key traffic projects, but it is necessary to clearly identify the difficulties and problems of each project, avoiding generalities to give specific solutions.

In particular, information on public investment must be public, transparent, and regularly disclosed. From there, ministries, branches, localities and investors must focus on removing difficulties and obstacles in the investment implementation process for each specific project.

In particular, they must actively support enterprises in space clearance, early handover to construction contractors and resolutely withdraw capital for slow projects to arrange capital allocation for projects capable of implementing and attracting investment.

Thank you, Sir!