Hanoi’s authorities have urged relevant agencies to push the disbursement of official development assistance (ODA) funding for projects in the capital city.

Vice Chairman of the Hanoi People’s Committee Ha Minh Hai made the statement in referrence to the national low disbursement rate of 1.73% of the plan in the first five months.

Hanoi's urban railway project, section Nhon - Hanoi station. Photo: Pham Hung

Hai said this year Hanoi was allocated VND7.84 trillion (US$338 million) from the ODA funds for seven projects, but as of May, the disbursed amount stood at VND551 billion (US$23.78 million), or 7.03% of the plan.

“The Covid-19 pandemic was among main reasons causing a stagnation in the construction progress, as foreign experts could not re-enter Vietnam, or delay in the delivery of construction equipment from abroad, including powered vehicles for the urban railway project No.3 and machinery for Yen Xa wastewater treatment plant from Japan and Europe,” said Hai.

Hai also referred to the complicated process of adjusting construction schedule and costs for projects that are in delay, mainly due to the slow site clearance process and incompatibility between Vietnam’s regulations and international practices that could lead to possible disputes with foreign contractors.

“These issues are found in a number of projects, such as railway project No.2 with an ongoing modification of the planning for the underground station (Terminal C9) by Hoan Kiem Lake, and the project restructuring of the urban railway project No.3,” Hai added.

To further accelerate the disbursement of ODA funds, Hai suggested the Ministry of Planning and Investment (MPI) should soon issue an instruction on revising the plan for the use of ODA funds, as well as expeditiously contributing to the modification of financing agreements with donors from the Ministry of Finance and other agencies.