Hanoi will continue to push the acceleration of public investment during the year-end period, which requires the active response of each agency, department, and sub-municipal locality to complete the projects under their jurisdiction.

Ring road No.3 in Hanoi. Photo: Hai Linh

Chairman of the Hanoi People’s Committee Tran Sy Thanh stressed the determination during the city’s recent meeting, discussing the socio-economic performance for this year and the objectives for 2023.

This year, the city has set up two scenarios for public investment. In the optimistic scenario, Hanoi is expected to disburse 90% of the public funds of VND51.58 trillion (US$2.07 billion). Meanwhile, a less favorable case would see the disbursement rate at 82.6%.

The authorities stated that land clearing remains one of the main bottlenecks for implementing public projects, especially when identifying the origin of the land, valuation, and compensation packages for affected households.

In addition, rising costs during the project implementation have also resulted in contract adjustment, leading to a slowdown in the construction process.

“The Covid-19 pandemic has also been a major factor undermining the public investment progress, given its disruption impacts on the supply chains, causing difficulties in importing machinery, equipment, and higher transportation costs,” stated the city’s report.

By 2023, the city expects to disburse VND47 trillion ($1.9 billion) of public funds, including VND15.7 trillion ($632 million), for municipal-level projects.

Key projects in 2023 would include the Hanoi Children Hospital-Phase 1, the Children Palace, the Yen Xa Wastewater treatment plant, and the Soc Son waste treatment complex Phase II.

Overall, Hanoi needs VND321.14 trillion ($13.6 billion) for the five-year public investment plan in the tenure 2021-2025, of which VND62.3 trillion ($2.64 billion) was allocated for the 2021-2022 period, or 26.5% of the total.

Vietnam's public investment reached 52.4% as of November

As of November, Vietnam's total disbursed amount reached 52.4% of the plan. The rate for projects financed by domestic funds was estimated at 60.25%, and foreign sources at 28%, according to the Ministry of Finance (MoF).

To further boost the disbursement of public funds, the MoF asked localities and government agencies to improve the spirit of discipline in public investment.

Prime Minister Pham Minh Chinh has issued a directive urging provinces/cities to improve public investment performance and called it a critical task for Vietnam to achieve socio-economic development targets, including a GDP growth target of 8% for this year.

Chinh noted a higher disbursement rate would require greater responsibility from leaders in agencies, units, and localities.  

Under the directive, the Ministry of Construction is tasked with monitoring the prices of construction materials and issuing new guidance on using alternative materials in public projects in case of rising prices.

The Ministry of Natural Resources and Environment would focus on addressing bottlenecks in land management in provinces/cities and the process of issuing licenses for mining operations to supply materials for public projects.

The Ministry of Industry and Trade is expected to ensure supply-demand balance and stable prices of input materials, especially fuels, gasoline, steel, and construction materials.

For provinces and cities, the directive requested a higher disciplined spirit to speed up public investment, including focusing on site clearance and compensation processes for affected households.