Disbursement of public investment funds in the first eight months of 2021 reached VND245 trillion ($10.76 billion), or 51.1% of the year’s target and representing a slight increase of 0.4% year-on-year.
|Elevated ring road No.3 project in Hanoi. Photo: Hai Linh|
“The figure, however, remains lower than expected, as the Covid-19 pandemic and stay-at-home order adopted by several provinces/cities are making it hard for the execution of public projects,” noted the General Statistics Office (GSO) in its monthly report.
In addition to the current pandemic situation, Vice Minister of Planning and Investment (MPI) Tran Quoc Phuong noted rising construction materials and the lack of commitment from government agencies and localities are factors hindering progress in public investment.
Data from the GSO noted the high disbursement rate mainly comes from large-scale projects or those of national priority. On the contrary, local projects of small scale register slow progress.
“Leaders’ attention to public investment is of significance, regardless of the size of the project,” Phuong said.
In a recent directive urging for localities to speed up public investment in the remaining months of the year, the Government called for greater responsibility and political determination from leaders to realize the disbursement target.
The directive also pointed out other shortcomings that need to be addressed, including the slow procurement and site clearance, as well as inefficient cooperation between different agencies in supervision or realizing administrative processes.
This year, the Government targets to disburse 95-100% of the VND461.3 trillion ($20.2 billion) of public investment funds allocated for this year, for which the rate should be at least 60% by the end of the third quarter, or VND276.7 trillion ($12.12 billion).
According to the directive, the slow disbursement of public funds reverses the positive effects of investment projects and leads to waste of resources.
This is particularly a concerning issue as this could delay the implementation of monetary and fiscal policies at a time when the economy is still struggling with the Covid-19 impacts, it added.
To speed up public investment, Prime Minister Chinh requested the MPI to shift state funds allocated to provinces/cities or ministries having disbursement rates below 60% to those disbursing at a higher pace.
During the eight-month period, the disbursement in Hanoi stood at VND27.5 trillion ($1.2 billion), representing an increase of 3.4% year-on-year and equivalent to 54% of the year’s estimate.
The city identifies public investment as a key measure to boost economic recovery during the pandemic, especially as fulfill the economic growth target for 2021 of 7.5%.
By the end of the third quarter, Hanoi expects to disburse 60% of the targeted amount and 100% for the whole year.