Disbursement of public investment: “Decisive leadership is a key issue”
In fact, the rule of “leisurely beginning of the year, year-end hardship” of public investment disbursement is not only in Vietnam, but exists in many countries, this comes from the nature of public investment. As the contractor is only paid a part of the contract money, the disbursement is only done when the amount of work is completed.Although the Government was very aggressive in promoting public investment disbursement from the beginning of the year, in the first half of this year, the disbursement of this capital reached only 35%. As in previous years, disbursements will normally accrue at the end of the year. Could you please tell us the cause of this situation?
In general, a construction and installation item takes about 6-9 months to perform, so the disbursement of public investment in the first months of the year is usually low, besides this year the implementation and disbursement of the capital plan are applied with the transitional provision, it means that there are two years to implement. If the plan has not been fully disbursed in 2020, it can be transferred to 2021, so there is still a sense of relaxation, but with the new Law on Public Investment, the law on disbursement will see many changes.
As a rule, if the ministries, branches and localities do not fully disburse their capital plans for the year, they will have their budget estimates canceled and their capital plans reduced, leading to a reduction in the total of the five-year medium-term plans. Ministries, branches and localities will have to calculate carefully and plan appropriately from the beginning.
The Government has issued strong and tough messages showing determination to carry out this important task. Will the task of disbursing public investment capital in 2020 achieve the goal?
In the proposed solutions, the problem in disbursing public investment capital is in the dynamism of the leaders of each ministry, sector and locality. Units with close and drastic leadership will disburse public investment capital. In the process of project implementation,if difficulties happen, they are willing to learn and gradually solve those difficulties.
Many people think that the difficulty lies in procedures, processes. That is true, but it is not enough. First of all, it must be confirmed that the process and conditions for disbursement with a public investment project are many procedures which are very complicated, depending on the progress of each item.If each item is completed,the item will be paid; the payment depends on the execution volume and this takes time.
As such, the most important factor is to have the implementation volume; however, this work is a series of uninterrupted procedures that require just one malfunctioning stage that will lead to a delay in the disbursement process.
In this continuous chain, site clearance and consultancy stage of making, appraising, deciding investment projects, planning investment for the project are the steps that take the most time. However, it must be clearly stated that the reason for the slow disbursement is the complicated procedures; there are also reasons why the participants did not understand the process. If understood, they will complete it very quickly. Therefore, I think that the most important thing is that the leader must drastically and closely follow the project in order to solve difficulties and problems, and determine to perform the task to promote progress of public investment projects with the highest sense of responsibility, considering this a political responsibility.
If I can do that, along with the positive efforts to remove difficulties from the Government, the strict handling of inertia and stagnation, I believe that the goal set for the disbursement of public investment will be met. Although it is very difficult, it will achieve the highest results.
The capital transfer of ministries, branches and localities with slow disbursement to ministries, branches and localities will be carried out immediately in August 2020. Could you tell us how the transfer will be conducted?
Under this solution, the Ministry of Planning and Investment is tasked with monitoring and observing units with low disbursement results to summarize and report to the Prime Minister.
Currently, the Prime Minister has been assigned by the National Assembly to transfer capital from ministries, branches and localities to lower disbursement to ministries, branches and localities to do better.The purpose is to promote disbursement and efficient use of capital.
However, this has to go through a review step. There have been units that self-reviewed and felt that they could not complete the disbursement target, so they returned the capital plan of hundreds of billions of dong.
The Ministry of Agriculture and Rural Development has made a written proposal to transfer capital of more than VND1,800 billion (out of total capital of VND3,600 billion) of the foreign capital plan assigned to this ministry in 2020 to other ministries, branches and localities with a to ensure disbursement eligibility.
VCN – This year is the final year of the medium-term public investment plan period 2016-2020. The remaining …
Besides, through the review results, we realize that the locality and unit can disburse more than the capital already assigned, we will propose the Prime Minister to make additional adjustments. Given the current efforts of ministries, branches and localities, I hope that the rate of disbursement of public investment this year will be high. The story of “having money but not being spent” will gradually be overcome in the coming period; the autonomy of ministries, branches and localities will be greater but accompanied by more responsibilities.
By Thu Hien/ Bui Diep
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