Undisbursed funds for public investment projects could be recalled if local governments failed to implement the projects for an extended period of time, said Deputy Prime Minister Le Minh Khai in a meeting with officials of five provinces in Hanoi on May 19.
According to the Ministry of Finance, funds allocated to five provinces, namely Vinh Phuc, Phu Yen, Khanh Hoa, Binh Thuan, Binh Phuoc, in 2022 will be VND 26.6 trillion (USD 1.2 billion), including VND 5.7 trillion from central budget and the rest from local budgets.
However, according to the State Treasury, as of May 15 this year, the five provinces managed to disburse just over VND 5.5 trillion or 20.7 percent of the year's target. Of which, nearly VND 4.2 trillion came from local budget, VND 1.28 trillion from central government budget and more than VND 40 billion from ODA sources.
Deputy Chairman of Vinh Phuc People's Committee Vu Viet Van said the country's existing regulations on public investment have been showing shortcomings and limitations.
For example, he said the law required local governments to present public investment projects to the People's Council but the council only holds 2-3 meetings a year, making it near impossible for them to meet such requirements.
Another issue was the land clearance procedure which is not allowed to start before a project received its final approval, significantly slowing down the speed at which a project can be implemented.
As land clearance and compensation typically required a large amount of money, a bottlenecked process could potentially tie up trillions of funding.
Le Ngoc Tien, director of Binh Thuan Province's Department of Planning and Investment, said it's high time the Government establish a detailed guideline for land clearance process to avoid confusions down the line.
Minister of Finance Ho Duc Phoc said his ministry is to collect and study all feedbacks by local officials and that the Government has been working around the clock to address said issues. However, he said disbursement for public investment projects has been too slow and too behind schedule. It was a cause for concern, especially in light of recent inflation waves, rising construction material prices and wages.
As a temporary solution, he suggested local governments to assign high-ranking officials to closely oversee the land clearance process. He said once all necessary steps are completed, his ministry only requires no more than 72 hours to transfer the funds.
He said the country's top priority right now is to quickly improve its infrastructure, a key component in speeding up economic recovery. As the National Assembly approved a VND 350 trillion economic recovery package, nearly one-third of it has been earmarked for infrastructure building.- (VLLF)