Disbursement delay deemed unacceptable
Public investment continues to suffer from poor disbursement, with names of culpable units being highlighted by the government. A list of authorities that have not yet allocated all of their state budget investment plans, and details of disbursement rates as of the end of March, has been published on the Ministry of Planning and Investment (MPI) portal.
The agriculture, health, and culture ministries as well as people’s committees of Ho Chi Minh City, Dong Nai, Quang Nam, Cao Bang, Thai Nguyen, and many others are mentioned.
Last year, following poor allocation and disbursement of public investment, the prime minister requested local authorities at all levels to “urgently allocate details of the state budget capital investment plan in 2024 without delay”.
However, according to the MPI, as of the end of March this year, about $1.3 billion out of over $27 billion of planned capital for 2024 was not allocated, including nearly $400 million from the central state budget and the remainder from the local budget.
“We are working with the Ministry of Finance on reports to authorised authorities on reducing the central budget capital investment plan for 2024 from areas that have not yet been allocated in detail,” said Minister of Planning and Investment Nguyen Chi Dung.
Among the top reasons for slow disbursement, many newly started projects have yet to carry out investment procedures to qualify for the annual capital plan.
In 2023, disbursement of public investment was more than $27.5 billion, equivalent to 93 per cent of the plan set forth. That means over $2 billion was not used.
“We know that some of this amount will be spent in 2024, but if public investment were fully al
located and disbursed, investment performance will improve with a more positive impact on economic growth last year, and being a better foundation for future development,” Minister Dung said.
In 2023, disbursement of public investment was good, but did not reach the target of 95 per cent. This year, this target remains the same, Dung said, and to achieve it, the government has urged departments to spend the money.
Thanks to efforts in holding meetings and creating relevant working groups, in the first three months of 2024, disbursement of public investment reported positive outcomes of about $3.75 billion being spent, equal to 13.67 per cent of the plan, and higher than the same period last year.
However, based on disbursement rate, while there are four ministries and agencies and 23 localities achieving high rates of over 20 per cent of
the assigned plan, nearly 40 ministries and agencies and 26 localities have reported disbursement rates below the average of the whole country. Some agencies have been reported zero disbursement this year so far.
Minister Dung pointed out some difficulties such as there not being enough sand for the construction of many key highway and road projects, especially in the Mekong Delta and the southern region, affecting construction progress of projects (see below).
There are also inherent difficulties such as slow site clearance, untimely investment procedures, and poor contractor capacity, which also affects the speed of public spending.
“Authorities at all levels must promote the allocation and disbursement of public spending as a key political task to ensure economic growth. We should promptly handle and remove difficulties in the supply
of sand and stone to speed up the progress of key national projects,” said Minister Dung.
Minister of Transport Nguyen Van Thang said that in 2024, the ministry will strive to spend all the allocated capital. In 2024, his ministry was assigned nearly $2.4 billion in planned capital; almost $450 million of this was disbursed by the end of March, reaching 19 per cent of the yearly plan.
Nguyen Duc Trung, Chairman of Nghe An People’s Committee, said that the province had outlined its plan in detail and had already disbursed over 20 per cent. “We are determined to ensure disbursement of public investment capital this year. The provincial government has made great efforts to work with investors of projects that have low disbursement rates, remove problems and ensure disbursement,” Trung said.n