HCMC – The Ministry of Finance has asked other ministries, government agencies and local authorities to take prompt action to boost public spending as the disbursement rate of foreign loans and official development assistance (ODA) remains low.
At a meeting on public capital disbursement chaired by Deputy Minister of Finance Tran Xuan Ha on August 31, the Debt Management and External Finance Department under the Finance Ministry said the disbursement rate of foreign loans and ODA in the January-August period was a mere 21.64%.
Head of the department Truong Hung Long attributed the low disbursement rate to later-than-expected bidding, incomplete procedures for project adjustment, slow site clearance and the Covid-19 pandemic’s impact on the progress of the projects.
Long said five of 62 cities and provinces have sent documents to the Ministry of Planning and Investment seeking to return VND1.61 trillion of unused public investment capital.
Vice Chairman of Hanoi City Nguyen Doan Toan said the city’s disbursement rate of foreign loans and ODA was around 20% between January and July and is expected to reach 69% for the entire year.
In the southern province of Binh Phuoc, the disbursement rate of foreign loans and ODA as of August 30 was just 11%. The province has two projects using foreign loans and ODA worth a combined VND43.7 billion, including the VND23.7 billion border area development project and the VND20 billion rural electricity project, but it had disbursed only VND4.8 billion.
A representative of the central province of Thua Thien-Hue said some projects in the province needed adjustments but the approval process was way too slow because it involved many local and central agencies. Besides this, projects using foreign loans and ODA have to meet numerous criteria such as social impacts and environmental protection so they require more time.
The Ministry of Finance said the slow disbursement of public capital, especially from foreign loans and ODA, has hampered the country’s socioeconomic development and affected the macroeconomic stability.
It has established five special teams led by the Minister of Finance and leaders of the Debt Management and External Finance Department and the Foreign Investment Department to inspect the disbursement of public capital in ministries and localities.
The ministry asked localities to assist investors in clearing the difficulties hindering their projects and achieving public capital disbursement targets for this year.