Disbursement of public investment slow in January – May
The disbursement of public investment was slow in the first five months of this year, meaning greater effort was needed to push up progress as such investment is an important driver for post-pandemic economic recovery.
The Ministry of Transport, one of the ministries and agencies allocated the largest sum of public investment this year, worth nearly VND43 trillion for 61 projects, was seeing slower than expected disbursement.
The ministry’s statistics showed that as of the end of May, the ministry disbursed more than VND13.5 trillion, equivalent to 32.1 per cent of the plan for the full year.
The transport ministry said despite being one of the ministries and agencies with the highest public investment, the progress failed to meet the plan because most projects were focusing on conducting procedures for implementation in the first months of this year and disbursement was expected to be sped up in the second half.
Statistics of the Ministry of Finance showed that realised public investment was estimated at more than VND102 trillion in January – May, or 22 per cent of the Government’s plan and 3.8 percentage points lower than the same period last year.
Only seven ministries, agencies and localities had disbursement rates of more than 25 per cent of the plan while most saw low disbursement rates, with 39 out of 50 ministries and agencies and 17 out of 63 provinces and cities reporting disbursement rates of less than 15 per cent.
Among them, 13 ministries and agencies had not managed to disburse any, while eight saw disbursement rates of less than one per cent.
Deputy Minister of Finance Ta Anh Tuan said that the progress of the public-invested projects was partly affected by the outbreak of the COVID-19 pandemic, skyrocketing prices of building materials and slow site clearance. Especially, some contractors were of weak capacity and there existed a number of problems in implementing official development assistance (ODA)-funded projects, he pointed out.
The Ministry of Planning and Investment said that it was necessary to make good preparations for public invested projects so that the capital could be disbursed from the first months of the year, not left until the final months.
Nguyen Dinh Cung, member of the Prime Minister’s Economic Advisory Group, said that slow disbursement of public investment had existed for many years but little improvement was made despite its important role in accelerating economic growth amid the pandemic.
Economic expert Ngo Tri Long said that the soaring prices of steel and other building materials from the beginning of this year were causing significant difficulties to public-invested projects.
Long urged the Government to raise solutions to cope with this situation and speed up the disbursement of public investment, which would contribute to realising the economic growth target.
Accountability in disbursing public investment must also be enhanced to ensure feasibility of the projects, Long stressed, adding that the waste of public investment would cause damage to the budget and socio-economic development.
The stagnation in disbursing public investment reflected the weak capacity of the relevant ministries and agencies from the evaluation stage of the projects. It was necessary to have strict punishment mechanisms when the slow disbursement of public investment caused waste, Long said.
Vu Hong Thanh, Chairman of the National Assembly’s Economic Committee, said that some major projects were seeing very slow progress, especially component projects of the North-South Expressway, due to the shortage of building materials and high steel prices.
If no effective measures were put forward, it would be difficult to speed up the progress and disbursement of public investment, Thanh said.
The Ministry of Planning and Investment said that a special working group would be set up, which would be in charge of reviewing and tackling difficulties in implementing public invested projects. The proposal was submitted to the Prime Minister for approval.