Accelerating the disbursement of public investment capital

The Ministry of Planning and Investment has proposed that the government consider launching a 120-day-and-night campaign to disburse public investment capital for 2024. It also urged ministries, sectors, and localities with disbursement rates below the national average to focus on accelerating the disbursement of public investment capital from now until the end of the year.
Construction of the North-South Expressway project, Van Phong-Nha Trang section. (Photo: TUAN KHAI)
Construction of the North-South Expressway project, Van Phong-Nha Trang section. (Photo: TUAN KHAI)

As of the end of August 2024, the disbursement of public investment capital has reached over 274 trillion VND, equating to 40.49% of the plan assigned by the Prime Minister, which is lower than the disbursement rate of 42.35% during the same period of 2023.

Pressure in the last months of the year

Data from the Ministry of Finance shows that the estimated disbursement of public investment from the beginning of the year to August 31, 2024, is 274.5 trillion VND, reaching 37.01% of the plan and 40.49% of the target set by the Prime Minister. So far, 34 ministries and sectors and 23 localities have a disbursement rate lower than the national average. The fact that some localities have large plans with low disbursement rates has greatly impacted the overall national disbursement rate.

For example, Ho Chi Minh City was allocated more than 79.2 trillion VND, accounting for 11.8% of the national plan, but only 16.58% of the figure has been disbursed. Meanwhile, Hanoi was allocated over 81 trillion VND, making up 12.1% of the national plan, but only 35.23% has been disbursed.

Thus, there is immense pressure to disburse public investment capital in the last months of the year, as nearly 60% of the planned funds still need to be disbursed. Notably, about 26.5 trillion VND has yet to be allocated in detail, accounting for nearly 4% of the total public investment capital for 2024. Of this, ministries, sectors, and localities have requested a reduction of over 9 trillion VND as they cannot disburse it all. This capital is being reallocated by the Ministry of Planning and Investment to key national projects and those with high potential to promote rapid and sustainable socio-economic development.

The Ministry of Planning and Investment has also submitted a request to the government to allow ministries, sectors, and localities to continue allocating the 2024 capital plan for new tasks and projects that were recently approved under the adjusted medium-term public investment plan for 2021-2025. Given the current disbursement status, the Ministry of Planning and Investment has proposed that ministries, sectors, and localities focus on accelerating disbursement in the remaining months of the year, aiming to disburse over 95% of the plan assigned by the Prime Minister.

Solutions are needed to ensure the progress of key projects, improve the quality of investment preparation for several important railway projects, especially the North-South high-speed railway, rail connections between Vietnam and China, and expressway projects for the 2026-2030 period, as well as upgrading existing expressways to their fully planned scales.

Legal revisions to unlock resources

At a meeting in early September 2024, Deputy Prime Minister Tran Hong Ha requested that ministries, sectors, and localities urgently review the progress of each project to identify specific causes, difficulties, and delays in disbursement. Based on this review, they should categorise projects and adjust capital in line with each project’s capacity to absorb funds, thus ensuring full disbursement of allocated capital. Additionally, ministries must compile all challenges for each project to be addressed under their authority and submit specific proposals to the Ministry of Planning and Investment by September 15, 2024, for issues beyond their jurisdiction.

Based on the proposals, the Ministry of Planning and Investment will lead a comprehensive review and submit recommendations to the appropriate authorities to ensure the full disbursement of the 2024 capital plan.

In preparation for the final sprint, the Ministry of Planning and Investment has proposed that the government launch a 120-day-and-night public investment disbursement campaign for 2024, directing ministries, sectors, and localities with disbursement rates below the national average to focus on accelerating the process from now until the end of the year.

In addition to immediate solutions to fulfil the 2024 public investment plan, the government has tasked the Ministry of Planning and Investment with urgently drafting amendments to the Law on Public Investment and revisions to several related laws, including the Law on Planning, the Law on Investment, the Law on Public-Private Partnerships, and the Law on Bidding.

One of the key requirements in the upcoming law revisions is to identify and remove bottlenecks in the current legal framework to facilitate smoother project implementation in the future. The broader goal is to free up resources as the amended laws largely concern investment, finance, and budget regulations that directly impact economic resources.

Regarding the progress of amendments to the Law on Public Investment, Deputy Minister of Planning and Investment Tran Quoc Phuong said that the ministry has conducted a review and submitted proposals for amendments to the relevant authorities. These amendments aim to simplify procedures, focusing on five major policy groups approved by the government, reflecting the spirit of bold reform, decentralisation, and empowerment by the government and the prime minister.

These policy groups include institutionalising pilot and special mechanisms approved by the National Assembly, further decentralising powers, improving the quality of investment preparation, leveraging local and state-owned enterprise resources, accelerating the disbursement of ODA and concessional loans from foreign donors, simplifying investment procedures, and clarifying concepts and terms to ensure consistency within the legal system.

“The upcoming amendments to the Law on Public Investment are very comprehensive, with an urgent timeline and high-quality requirements aimed at fundamentally addressing difficulties, limitations, and bottlenecks, improving the efficiency of capital use, and unlocking resources for development. The revised Law on Public Investment is expected to be passed at the 8th session of the 15th National Assembly,” said Deputy Minister Tran Quoc Phuong.

Source: NDO

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