Dealing with stagnation in disbursement of public investment capital

There are many bottlenecks in disbursement such as cumbersome procedures and fear of responsibility (Photo: Huy Hung/VNA)

Disbursement of low investment capital

Disbursing public investment capital is said to be key for rapid socio-economic recovery and development in 2022. Public investment in key national transport projects will lead and attract capital from other economic sectors and the whole society. However, the problem of slow disbursement of public investment capital has been talked about forever but there has been no change in many localities across the country.

In fact, the disbursement speed of this capital in the first months of the year was still slow. Therefore, just two weeks after receiving the assignment, it realizes that the disbursement of investment capital in five provinces has not changed much and there are still many difficulties and obstacles. On May 18, Minister Ho Duc Phuc urgently convened and worked with 5 provinces of Vinh Phuc, Phu Yen, Khanh Hoa, Binh Thuan, and Binh Phuoc to listen and remove difficulties and obstacles in this key work.

According to the report of the Ministry of Finance, the Prime Minister assigned the state budget capital plan in 2022 to the above five provinces with a total capital of more than VND 26.6 trillion; in which, the central budget capital is more than VND 5.7 trillion, the local budget balance capital is more than VND 20.9 trillion. Up to now, localities have detailed allocations totaling more than VND 28 trillion, equaling 108% of the plan assigned by the Prime Minister. In which, the central budget allocated 100% of the plan; the local budget was allocated more to three provinces, including: Vinh Phuc, Phu Yen and Binh Phuoc while the other two provinces are allocated less than the plan: Binh Thuan and Khanh Hoa.

According to local reports, as of May 4, these five localities have disbursed more than VND 5 trillion, disbursing 20.7% on average. In which, the province with the highest disbursement is more than 34% and the province with the lowest disbursement is more than 14%.

The Minister of Finance assessed that for almost half the year, the disbursement rate of this investment capital is very low, not to mention the newly allocated national target program capital, the state budget capital and the demand stimulus package. If these capital sources are added, the disbursement rate is still low.

Recognizing the difficulties in disbursement, Mr. Nguyen Duc Tam, Director of the Department of Localities and Territories, Ministry of Planning and Investment said that the main reason was due to unfavorable weather changes like heavy rain and the investment preparation work of 5 provinces faced difficulties. This has been the cause for many years. 2022 is the first year of implementing the medium-term plan, September 15, 2021, the medium-term plan for 2021-2025 has just been assigned, so investment preparation is not good, leading to slow disbursement. The next reason is the site clearance, especially the determination of land origin and the unit price of compensation for site clearance; raw material prices increased. Moreover, the implementation work in localities is still limit ed, increasing decentralization without matching with capacity. The capacity of some investors and contractors is low, and the financial capacity is low. Besides, among these five localities, the state budget allocated more than VND 26 thousand billion, but there are localities that have not yet allotted all the capital assigned by the Prime Minister; plus transitional capital, national target program capital and additional capital, the amount of capital will increase, so localities must drastically disburse funds.

Bottleneck on clearance

In fact, many problems are both subjective and objective in the disbursement of public investment capital. Of these localities have difficulties related to institutions and regulations of the law on public investment and related regulations. Specifically, according to a report by Vinh Phuc province, this province is facing difficulties in terms of authority in extending the implementation time and adjusting the annual investment plan of projects using local budget capital. In fact, the Provincial People's Council usually holds 2-3 meetings/year; Reporting to the Provincial People's Council for decision requires a lot of time to follow the process, thereby causing passivity for the district and commune levels.

Difficulties also relate to the authority deciding on the investment policy of the project. Specifically, Clause 2, Article 24 and Clause 2, Article 27 of the Law on Public Investment stipulate that the People's Committee submits to the People's Council at the same level to decide on investment policies in projects of groups A, B and C with public investment capital managed by the locality. In fact, submitting to the Provincial People's Council to decide the investment policy of each public investment project managed by the province will take a lot of time because it depends on the meeting of the Provincial People's Council in accordance with regulations (usually only 2-3 meetings/year), resulting in failure to meet the reporting time requirements to central agencies as prescribed.

Another difficulty that many localities face is site clearance in terms of implementation and compensation. The locality believes that the project site clearance cannot be implemented together with the basic design and construction drawing design stages. Therefore, when reviewing and synthesizing the compensation plan, the compensation plan is often not consistent with the basic design documents and construction drawing designs that have been appraised by the Ministry of Transport, which leads to problems in the construction process.

Article 61 of the Law on Construction on adjusting the total investment of construction investment projects did not provide permission to increase the total investment due to the causes of compensation and site clearance costs. During the actual implementation, when inventorying and calculating the compensation and site clearance plan, a lot of costs arise that cannot be fully calculated when making the project, leading to the locality adjusting the compensation unit price, solving the problem. If the ground clearance is suitable for reality, the cost will increase much. Therefore, it is necessary to study the regulations that allow the adjustment of the total investment amount due to the costs of compensation and site clearance to have a basis for implementation.

Giving solutions to overcome this, representatives of a number of ministries and sectors at the meeting had very specific plans. Accordingly, it is necessary to; carefully evaluate the subjective and objective causes; establish working groups led by the provincial vice president, to urge the disbursement of capital to departments and branches; definitively deal with ground clearance problems; resolutely reduce slow disbursement projects to good disbursed projects. Projects that have not been disbursed for six months are resolutely cut down; strengthen supervision and direction to accelerate capital disbursement in 2022.

Regarding extending the budget capital from 2021 to 2022, according to the representative of the Ministry of Planning and Investment, the Prime Minister has approved in writing, this week, the Ministry of Planning and Investment will make comments only directed by the Prime Minister, notifying the localities the list and the length of capital.