The Hanoitimes - From July next year, ODA (official development assistance) funds received by the country will only be allocated to provinces facing difficulties and for programmes to improve public welfare and eliminate hunger and poverty rather than for large infrastructure projects, according to the Ministry of Finance.
Head of the ministry's Debt Management and External Finance Department, Truong Hung Long, said the use of ODA by many faced shortcomings like lack of counterpart capital and slow progress.
Ninety percent of projects were extended at least once, leading to cost overruns — of billions of dollars in some cases — he told a seminar in HCM City on January 8.
Therefore, a sound legal framework for managing and effectively using foreign loans by localities would be created soon, he said.
An official from the HCM City Department of Finance said with the limited funds provided by the Government, it is imperative to mobilise domestic and foreign funds for infrastructure development.
Nhat Tan bridge in Hanoi- a project funded by Japanese ODA
The city wants a separate mechanism for capital mobilisation and favourable conditions for the issuance of government bonds in foreign currencies, he said.
Nguyen Xuan Thao, Deputy Head of the Debt Management and External Finance Department, said only 13 localities can balance their budgets while the remaining 50 get funds from the Government.
In the decade since 2004 the Government allotted 35 percent of ODA and preferential loans, or 15.5 billion USD, to provinces and cities, who used 38 percent of it to develop infrastructure, she said.