CAN THO – Despite significant policy shifts aimed at expediting projects for the Mekong Delta’s sustainable development in climate change adaptation (Mekong DPO projects), progress has remain sluggish, according to discussions at a recent meeting.
Speaking at a meeting on the progress report of the Mekong DPO projects, Tran Quoc Phuong, deputy minister of Planning and Investment, said the Government had issued key resolutions to remove barriers to project advancement.
Resolution 108/NQ-CP, issued on July 18, 2023, is aimed at mobilizing ODA loans and foreign concessional loans for Mekong DPO projects. This resolution adjusts the total foreign capital based on project needs, commitments from development partners, and an approved foreign loan re-borrowing rate of 10% for local spending.
Resolution 106/2023/QH15, adopted on November 28, 2023 by the National Assembly, piloted specific policies for road construction investment in the Mekong Delta. Subsequently, the Government issued Resolution 16/NQ-CP on January 27, 2024, to echo these pilot policies.
However, despite these policy revisions, the Mekong Delta project approval process continues to lag behind schedule. Several proposals from localities are stuck in the feedback gathering phase, with some regions yet to agree on project specifics or finances.
This lack of progress impedes governing agencies from compiling and submitting complete proposals for prime ministerial consideration and approval.
Phuong assessed that while there has been some progress, the preparation and approval process for implementing Mekong DPO projects have been slower than expected.
Pham Hoang Mai, head of the Foreign Economic Affairs Department at the Ministry of Planning and Investment, attributed the sluggish progress to adjustments in proposals and changes in project scale or direction in certain localities. Some areas await assessments from the Ministry of Finance regarding debt repayment capacity and project impact.
At the meeting, it was reported that the latest projected investment capital for Mekong DPO projects exceeds VND99.1 trillion. This comprises over VND30 trillion from domestic sources and nearly VND69.1 trillion in foreign loans, equivalent to around US$2.93 billion.
This indicates a significant increase compared to the provisions set forth in Resolution 108 by the Government. Nguyen Xuan Thao, vice head of the Debt and Foreign Finance Management Department at the Ministry of Finance, said that ODA capital cannot be directly allocated to localities according to the Law on Public Debt Management. Instead, it must be re-borrowed at a minimum rate of 10%.
While Mekong DPO projects received support at this minimum rate, amounting to a determined scale of US$2.56 billion as outlined in Resolution 108, the latest projections surpass this amount, potentially affecting long-term fiscal sustainability.
Thao explained that the evaluation for the 2021-2025 period would show no impact as most projects will not spend money during this time. However, Mekong DPO projects are expected to disburse funds in the 2026-2030 period.
