Accelerating the disbursement of investment capital from foreign loans

– In the first six months of 2021, Lang Son province’s disbursement rate of public investment capital from foreign loans has reached 8.5% and Lang Son is in the group of provinces with high disbursement rate in the whole country. However, compared with the disbursement results of the province’s public investment capital in general, the disbursement rate of foreign loans is very low (the disbursement of public investment capital in the whole province by mid-June 2021 reached 30% of the plan. To speed up the disbursement of this capital, investors are currently implementing synchronous solutions, striving by the end of September 2021, the disbursement rate will reach 60% of the plan.

In 2021, Lang Son province was assigned more than 583 billion VND in foreign loans by Ministry of Finance to implement seven projects. By mid-June 2021, investors assigned to manage capital have completed entering estimates for capital management and disbursement. However, the disbursement volume for projects in the first six months of the year was low, investors disbursed 49.9 billion VND, equivalent to 8.5% of the plan assigned by Ministry of Finance.

Notably, according to the report of the Provincial State Treasury, up to 4/7 projects with a total capital planning of more than 151 billion VND have not been disbursed. The reason for the delay in disbursement was due to problems in project adjustment procedures; problems with site clearance, some projects could not be executed due to the Covid-19 epidemic.

Workers of Truong An Lang Son Construction Joint Stock Company constructed a bridge on Khau Ban-Con Quan-Na Lua road, Dinh Lap district

Facing the fact that the disbursement of investment capital from foreign loans is low, investors have proposed a number of solutions to promote disbursement in the last six months of the year such as planning the progress of capital disbursement monthly, quarterly; coordinating with the Provincial State Treasury in settling payment dossiers for completed and accepted volumes, not accumulating capital until the end of the year; proactively reviewing projects’ ability to disburse capital from now until the end of the year to adjust within the assigned estimate, attaching the responsibilities of heads of relevant agencies, units and individuals to foreign capital disbursement results.

In 2021, the Provincial Construction Investment Project Management Board is allocated more than 287 billion VND by the central government from the Asian Development Bank (ADB) loan to carry out transport infrastructure construction projects; water supply for domestic use and capacity building for public property management under the project of basic infrastructure for inclusive growth in the Northeastern provinces: Ha Giang, Cao Bang, Bac Kan and Lang Son – Lang Son province’s subproject.

In the first six months of 2021, the volume of construction works reached about 50 billion VND, but only more than 12.7/287 billion VND was disbursed, equivalent to 4.4% of the assigned capital plan.

Specifically, in Lang Son, there are two projects that are slow to complete procedures from central agencies, leading to slow disbursement, namely Lang Son city drainage system and wastewater treatment project and the project of clean water sanitation and environment based on outputs.

Mr. Tran Quang Huy, Deputy Director of Lang Son Water Supply and Drainage Joint Stock Company said that in 2021, the company is allocated more than 75.6 billion VND from foreign loans to complete Lang Son city drainage system and wastewater treatment project. Because adding more items increases the total investment, the project must adjust the scale and implementation time, so the project must be adjusted. Currently, documents and procedures were completed and submitted by the Provincial People’s Committee to Ministry of Planning and Investment from May 2021, but so far, it has not been approved, leading to the project not having a basis for capital disbursement. Although Lang Son city drainage system and wastewater treatment project has basically completed construction and in trial operation.

Mr. Trinh Tuan Dong, Director of the Provincial Construction Investment Project Management Board, said that the reason for low disbursement results is that some works have problems in site clearance, the volume of acceptance has not yet guaranteed the value with each capital withdrawal. In order to overcome these shortcomings, in the last six months of the year, the Board must focus on doing a good job of coordinating with the districts to speed up site clearance and strengthen the urging and inspection over construction contractors as well as the acceptance of the volume as a basis for disbursement. For key projects, the members of the Board of Directors must directly direct the disbursement and take responsibility for unsatisfactory disbursement results.

In addition, investors must actively review the implementation of projects, urge contractors to accelerate progress to promote disbursement. Central agencies also need to urgently speed up the appraisal, approval and adjustment of investment projects using foreign capital for localities and complete procedures for capital withdrawal to disburse the planned capital in 2021.

The time for disbursement of investment capital from foreign loans is only six months while the allocated investment capital is still very large. Therefore, investors need to uphold their responsibility in inspecting, supervising and urging construction contractors, organizing acceptance to complete disbursement procedures. It is required to avoid the tendency of concentrating disbursements at the end of the year to soon promote the efficiency of investment capital for projects