VietNamNet Bridge – Localities and ministries this year must tighten controls on public investment activity, especially in the stages of fund appraisal and balance, approval in principle and final approval.

Illustrative image -- File photo

There will be no additions to the investment portfolio for 2017 if ministries and localities cannot secure sufficient funds for projects in the medium term, says a report published by the Ministry of Planning and Investment last week reviewing the disbursement of the State budget and government bond sales revenues in 2016.

In the report, the ministry states that disbursements last year in general did not go as planned.

The disbursement objective for 2016 was more than VND261.5 trillion, but in reality, only VND201.9 trillion had been paid out, 81.6% of the plan, an increase of 23.5% from the preceding year. Eight ministries and 21 localities met over 90% of the goal, whereas certain units accomplished less than 50%.

The target for government bond disbursements for 2016 was VND60 trillion. By the end of the year, only VND26.2 trillion had been used. Notably, two localities and five ministries fulfilled less than 40% of their disbursement task.

The MPI remarks capital construction debts and capital advances were more closely controlled in 2016, minimizing capital advances for public investment.

However, the release and regulation of capital for public investment remained slow in some ministries, agencies and localities, leading to the modest result of government bond disbursement.

Certain ministries, agencies and localities did not strictly adhere to the regulations on public investment management. The rush for completion of investment procedures in the final months showed poor project preparations.

To properly implement the public investment plan for 2017, the MPI calls for further policy synchronization and public investment restructuring in accordance with a decision of the Prime Minister and the economic restructuring plan for 2016-2020 adopted by the National Assembly.

Along with priority funds for settlement of capital construction debts, authorities at all levels should strive to prevent new debts. The State budget will not cover the debts incurred after December 31, 2014.

Capital advances should be minimized. When it is necessary, strict control should be given to each project and the return of capital should be ensured in the public investment plan for the medium term 2016-2020.

Commenting on the socio-economic situation of 2016, besides some achievements, the MPI pinpoints a number of shortcomings. State budget collections turned difficult, missing the target; tax arrears remained considerable; the implementation of the public investment plan was slow; government bond disbursement reached only half of the plan; asset management and public spending remained inefficient; public debt was high with huge repayment pressure.

As previously reported by the Daily, Vietnam will need a hefty VND2,000 trillion (US$90 billion) for medium-term public investment in 2016-2020.

SGT