The Hanoitimes - Minister of Finance Dinh Tien Dung attributed the low disbursement rate to delay in assigning mid-term public investment plan, insufficient fund allocation, slow adjustment of investment plan, cumbersome procedures, or delay in completing disbursement procedures.
The disbursement of ODA and preferential loans in Vietnam in the first six months of 2019 was equivalent to 3.4% of the target set by the National Assembly, according to Minister of Finance Dinh Tien Dung.
As of August, the disbursement rate was VND6.48 trillion (US$281.32 million), or 10.7% of the target set by the National Assembly at VND60 trillion (US$2.6 billion), Dung informed at the conference discussing the disbursement rate of ODA on September 13 as reported by Tuoi Tre Newspaper.
Overview of the conference. Source: Tuoitre Newspaper.
In the 2016 – 2018 period, total investment capital from the ODA and preferential loans stood at VND137.17 trillion (US$5.95 billion), or 74.53% of the estimate.
Regular spending from foreign sources in the January – August period reached VND862 billion (US$37.41 million), or 8.5% of the estimate.
As of present, 35 government agencies and provinces recorded low disbursement rate, such as the Ministry of Health with 4.8%, Quang Ninh province with 0.5%, Quang Nam with 2.3%, Hung Yen with 8.3%, among others.
Dung attributed the low disbursement rate to delay in assigning mid-term public investment plan, insufficient fund allocation, slow adjustment of investment plan, cumbersome procedures, or delay in completing disbursement procedures.
Dung referred to the case of Ministry of Education and Training (MoET) having disbursement rate of 25% of the estimate, citing the lack of counterpart funds as the reason.
Additionally, representative of the MoET said the process of fund allocation is time consuming, in which the planning often takes one to three months, and only until the third quarter then the ODA funds starts getting disbursed.
To speed up the disbursement rate of ODA and preferential loans, Ngo Van Quy, vice chairman of Hanoi People’s Committee proposed the mechanism of disbursing ODA funds based on actual implementation progress and the fund provision plan of donors.
Quy pointed to the pilot urban railway project of Hanoi with section Nhon – Railway Station which invested with an estimated fund of VND3.27 trillion (US$141.69 million). However, as of the end of August, only VND1.1 trillion (US$47.65 million) has been allocated, or 34% of the estimate.
Another example is the Hanoi urban railway project section South Thang Long – Tran Hung Dao with the disbursement rate of 5% of the estimate. IN 2019, the allocation plan was VND393 billion (US$17 million), but only VND18.4 billion (US$796,904) has been disbursed to date.