Adjust regulations, troubleshoot public investment in Vietnam

Amending several provisions

Over the weekend, the Government of Vietnam officially promulgated Decree No. 120/2018/NĐ-CP on amendments to some Articles of the Government’s Decree No. 77/2015/NĐ-CP on annual and medium-term public investment plan, Decree No. 136/2015/NĐ-CP on guidelines for some Articles of the Law on Public Investment 2014 of Vietnam and Decree No. 161/2016/ND-CP on special mechanism for construction management of some projects under national target programs during 2016-2020.

Several problems and difficulties in the process of implementing public investment projects will be amended and supplemented, one of which is the regulations on the conditions for providing capital for a program/project under an annual public investment plan.

Specifically, in addition to the conditions specified in Article 56 of the Law on Public Investment 2014 of Vietnam, the new project must have its investment guidelines must be approved by a competent authority by October 31 of the year preceding the plan year, except for emergency project, project funded by state budget reserves, surplus or increase in budget revenue and other cases decided by the Prime Minister.

Previously, according to regulations, all projects using public investment capital (including state budget reserve and excess revenue, local budget balance) must have an investment decision before October 31 of the year preceding the plan year.

This is a big problem of public investment projects in the past few years. By fact, according to the Ministry of Planning and Investment, with projects using state budget reserve capital, exceeding revenue, State budget balances - used to invest in urgent new projects - often arise outside the medium-term and annual investment plans.

Since these capital sources have not been determined at the time of medium-term and annual investment planning, these projects cannot have an investment decision before October 31 of the year preceding the plan year. Therefore, in this Decree amendment, projects in this category are excluded.

Similarly, the regulation on implementation of public investment plan and disbursement of capital therein is also amended. According to which, time for implementation of the annual and medium-term public investment plan and disbursement of capital therein shall comply with Article 76 of the Law on Public Investment 2014 of Vietnam.

Regarding the project funded by the state budget, sovereign bonds, government bonds, local government bonds or revenues which are retained but not recorded in the state budget balance, time for disbursement of capital specified in the annual public investment plan shall be extended by December 31 of the year succeeding the plan year.

In special cases, the Prime Minister shall decide to extend the time for disbursement of capital specified in the annual public investment plan to each project to the subsequent years, but not exceeding the time specified under Point a Clause 1 Article 76 of the Law on Public Investment 2014 of Vietnam.

The current regulation is that the time for disbursement of public investment plan capital is "extended to next year". However, before March 15 every year, ministries, branches and localities must send to the Ministry of Planning and Investment and the Ministry of Finance a list of projects that have not been fully disbursed in the previous year's plan, proposing a list, reason and capital level of the previous year's plan to extend the implementation and payment time to next year.

In principle, ministries, branches and localities can send the Ministry of Planning and Investment and the Ministry of Finance a list of projects to request for extension to next year from February every year (after the end of the adjustment period for the annual budget settlement), the Ministry of Planning and Investment may announce the extension as soon as the disbursement data is agreed with the Ministry of Finance.

However, in reality, the unification of disbursement data still takes a long time to compare the disbursement data of ministries, branches, localities and the Ministry of Finance.

Normally, it is not until the end of April that the Ministry of Planning and Investment can notify the extended capital amount to ministries, branches and localities, affecting the disbursement progress of projects. Now, the extension is set to the end of the year, which will remove difficulties for many projects that have to extend the disbursement deadline.

Accelerating disbursement

Along with the Law on Public Investment being finalized to submit to the National Assembly, the Government's timely promulgation of Decree No. 120/2018/NĐ-CP is expected to make an important contribution to solving difficulties, thereby promoting disbursement of public investment capital.

The amendment of the above decrees has been proposed by the Ministry of Planning and Investment to the Government since the end of last year, after reviewing the difficulties and obstacles related to the disbursement of this capital.

According to a report of the Ministry of Planning and Investment, the disbursement of development investment capital from the state budget has recently improved.

Specifically, in the first 8 months of 2018, the figure was estimated at 176,840 billion VND, reaching 44.24% of the plan assigned by the National Assembly and reaching 45.57% of the plan assigned by the Prime Minister.

Thus, the situation has improved compared to the same period last year, when the disbursement of public investment was relatively slow, making the Government impatient because it could affect economic growth.

However, the Ministry of Planning and Investment is also worried, because while domestic capital has a higher disbursement rate of about 3%, foreign capital has a lower disbursement rate of about 14% over the same period. Moreover, there is also a large disparity in disbursement rate among ministries, branches and localities.

Specifically, while some units such as the Office of the National Assembly, Quang Tri province, the Bank for Social Policies have a high disbursement rate, even exceeding the plan, there are still many units with low disbursement rate such as Vietnam Cooperative Union whose disbursement rate is 3.41%; State Bank of Vietnam 9.88%; Vietnam Academy of Science and Technology 12.79%, etc.

According to the forecast of the Ministry of Planning and Investment, this year, the target of total social investment compared to GDP will continue to reach the plan (equivalent to about 34% of GDP), but it is necessary to continue to promote the solution. public investment capital, especially ODA capital.

Source: baodautu.vn

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