Difficulties in achieving target of ODA disbursement

The conference assesses the ODA disbursement between January and September 2021.

Many ministries and government agencies return allocated capital

The ODA disbursement in 2021 has faced difficulties. Between January and September, the Prime Minister, ministries and government agencies made great efforts to provide solutions to expedite this task.

The Ministry of Finance has organized online working sessions with project owners of local government agencies to review the progress of projects especially projects that have faced difficulties and obstacles. However, the disbursement is still lower than the results of previous years, said Director of Department of Debt Management and External Finance Truong Hung Long at a conference with ministries and government agencies to assess the ODA disbursement between January and September 2021.

According to the ministry, the Prime Minister assigned ministries and local government agencies the public investment capital plan in 2021. The foreign capital is VND51,550 billion, including VND16,637 billion to ministries and central government agencies and VND34,913 billion to local government agencies.

As of end-September, ministries and government agencies imported the estimate of VND13,043 billion or 78% of the target to the Treasury and Budget Management Information System (Tabmis).

October 6, the disbursement of public investment capital from foreign capital sources in 2021 by ministries and government agencies reached 19.3% or VND3,166 billion, two times higher than in June.

Notably, as of October 6, the Ministry of Finance received nine proposals of ministries and government agencies to return allocated capital worth VND8,054 billion. This figure accounts for 44.08% of the allocated capital. This capital may be allocated to localities that need to disburse beyond the plan or be forced to cancel the capital plan.

Although agencies have made great efforts to provide solutions to support the disbursement, the completion of target of over 95% of the plan is not feasible.

The delay in the disbursement of public investment capital from foreign loans results from the impact of Covid-19 on ODA projects.

In addition, the slow disbursement is due to the delay in site clearance, resettlement, basic design, bidding, contract signing, or procedures for adjusting in-principle investment.

The capital plans are not effective and many ministries and government agencies have not yet allocated capital, leading to cancellations of the estimate.

Continue to transfer assigned internal capital

According to a representative of the Ministry of Agriculture and Rural Development, the ministry has 18 foreign-invested projects and disbursed 45.5% of the assigned capital in 2021. The capital in 2020 extended to 2021 of the ministry is VND137 billion, and 50% of that was disbursed. From now to the end of the year, the ministry will disburse all this capital.

The representative also said due to the public health crisis, all construction sites in localities have suspended their operation and foreign experts cannot enter.

The ministry’s projects include irrigation works, so they have to be built in the dry season. However, the projects cannot be implemented due to the Covid-19 pandemic. Currently, construction is allowed but it is the rainy season.

The price of steel materials surged seven times, causing an increase in the total investment of hundreds of billions of VND, so these projects have to be renegotiated with the sponsor, taking a long time.

The Ministry of Agriculture and Rural Development proposes to consider procedures for adjusting projects. Because the adjustment of projects takes a lot of time. The ministry also asks to use domestic experts instead of foreign experts.

A representative of the Academy of Science and Technology said that the unit has two ODA projects with a total allocated capital of VND2,159 billion. However, due to failure in implementation, the unit returned 89% of the assigned capital plan. Only 11% of capital is expected to be disbursed. The slow disbursement of the projects is mainly due to the impact of the Covid-19 pandemic and the waiting for investors' objection, prolonging procedures.

The Ministry of Finance proposed to the Government and the Prime Minister to request ministries and government agencies to urgently implement solutions and work with relevant agencies to expedite the disbursement of public investment capital, including ODA and foreign concessional loans. The ministry recommended that the Government and the Prime Minister require agencies to study the preview of e-documents (using scanned copies) to shorten the processing time of documents at all stages of the process.

The Ministry requested governing agencies to check, review and supervise the implementation of capital plans of project owners, promptly remove obstacles and difficulties in project implementation and disbursement; and transfer the internal capital plan.

It also requested project owners to call for the project management board to complete procedures for investment, construction, migration, resettlement, and site clearance for project implementation; promptly detect problems for handling or report them to the governing agencies, and ask for approval of the donor.

The project management board must send dossiers to the State Treasury for carrying out procedures for spending control after the volume has been completed.