Remaining plenty of difficulties and obstacles
According to the MoF, the law on public investment has been improved in the areas of decentralization, decentralization, and unified management. In addition to the provisions of the Law on Public Investment, ministries, central and local agencies have been decentralized in the appraisal of capital sources and the ability to balance capital for projects under the authority to decide investment policies; decentralized in the management and use of capital from legal revenues of state agencies and public non-business units for investment.
|Measures needed to limit the return of allocated public investment capital|
The Government has promptly directed and managed the implementation of public investment plans, providing effective capital-utilization solutions. However, the implementation of the medium-term public investment plan for the period 2021-2025 still has certain shortcomings and limitations; particularly, the shortcomings of the formulation and allocation of the medium-term public investment plan for the period 2016-2020 have not been overcome in this period.
In particular, insufficient capital has been allocated to pay off capital construction debts and return advance capital from the central budget. According to the MoF’s summary, the amount of advance capital from the central budget that has not been recovered in the medium-term plan for the period 2021-2025 is more than 7,890 billion VND (5,528 billion VND for localities; 2,362 billion VND for ministries and central agencies).
At the same time, an inspection in four localities (Lao Cai, Nam Dinh, Ninh Binh, and Lam Dong) has just revealed that capital construction debt in these four localities by the end of 2020 is over 6,764 billion VND, with an additional 1,409 billion VND arising in 2021. The aggerate amount of capital construction debt handled by four localties is over 3,438 billion VND. The remaining capital construction debt after allocating the capital plan in 2022 is still being handled in the following years, totaling 4,734 billion VND.
The project that has been included in the medium-term public investment plan is not eligible to be assigned the annual plan (due to insufficient investment procedures), even though the project's annual plan is still ongoing. For example, the Dong Dang (Lang Son) - Tra Linh (Cao Bang) expressway project has been assigned a 2,500 billion VND budget for Cao Bang province to implement between 2021 and 2025 (particularly 300 billion VND in 2021 and 538 billion VND in 2022).
Because the annual plan capital has not been allocated to the project yet, Cao Bang province has been required to repay the central budget. The project's 2023 budget is 500 billion VND, but it has yet to be allocated.
Furthermore, while some ministries and central agencies have been assigned large medium-term public investment plans for the period 2021-2025, cumulative capital assigned in the annual public investment plan remains low. At the same time, some ministries and localities have not anticipated the ability to absorb and use the capital of the projects, so they are offering to return the capital. For instance, Quang Ninh province proposed lowering the central budget (foreign loans) investment plan for Ha Long’s drainage and wastewater treatment project or submitting to competent authorities to adjust the annual capital plan.
Furthermore, the capital allocation for key and inter-regional projects has been plagued by problems and has yet to be disbursed. Meanwhile, some ministries and central agencies have not been allocated enough medium-term plans based on their capital needs; and have not prioritized capital allocation for transition projects that will be completed and put into use soon while allocating capital for the implementation of new construction projects.
According to the MoF, some shortcomings indicated that the synthesis, evaluation, formulation, preparation, and selection of projects to put the medium-term financial assessment plan for the 2021-2025 period have not met the requirements.
Improving the effectiveness of medium-term public investment 2021-2025
In order for the medium-term public investment plan 2021-2025 to be highly effective, the Ministry of Planning and Investment is drafting a report to evaluate the mid-term implementation of the public investment plan for this period. The MoF has asked the Ministry of Planning and Investment to review, synthesize, and evaluate the necessity, feasibility, and effectiveness of developing medium-term public investment plans over the past few years and in the future.
The Ministry of Planning and Investment has proposed "allocating enough capital to completely recover all advance capital from the central budget and pay off capital construction debts" in the content of discipline in public investment that has been gradually strengthened and adhered to.
However, the MoF stated that the amount of advance capital from the central budget for the recovery plan has not been allocated, and capital construction debts in some localities remain significantly large. As a result, the MoF has suggested adding a firm solution to allocate sufficient capital to return advance capital and handle capital construction debts under regulations.
Furthermore, the draft report has presented problems in different fields, including overlapping and inconsistent regulations prescribed in Laws on Land, Public Investment, Biding, Road Traffic, and State budget, thus leading to confusion in the organization of the implementation, the situation of "capital waiting for the project" Indeed, there have been no immediate remedies yet.
The provisions of the law, however, existed before the development of the 2021-2025 medium-term public investment plan. These issues can be identified, but when developing the plan, implementing units as well as general agencies continue to include the projects in the plan, resulting in shortcomings in the implementation process.