Public capital disbursement in HCMC reaches 50.5% of plan

Public capital disbursement in HCMC reaches 50.5% of plan

Van Nam

A flood control project in HCMC deployed under the PPP format. Many public projects in the city are falling behind schedule due to slow capital disbursement – PHOTO: VAN NAM

HCMC – Capital disbursed for public projects in HCMC in the first seven months of 2017 reached only 50.5% of the year’s plan, lower than targeted, announced the city’s Department of Planning and Investment at a meeting on August 3.

According to the department, the city is allocated nearly VND26.2 trillion (about US$1.152 billion) for 2017 from the State budget, official development assistance (ODA) and the city’s own budget, for public projects.

As of the end of July, over VND13.2 trillion had been disbursed, 50.5% of the plan. In particular, VND722 billion from the central State budget was disbursed, only 22% of the full-year plan, VND2.9 trillion from ODA, 71.9%, and VND9.59 trillion from the city’s budget, 50.8%.

The pace of capital disbursement was slower than expected due to many reasons.

For capital from the State budget, the city was allocated VND3.2 trillion to build Children’s Hospital and Oncology Hospital 2. The investor, the Works Construction and Management Authority under the city’s Department of Health, only began to disburse capital for the projects after the financial management agency finished paperwork.

ODA required for the city’s public projects in 2017 was estimated at VND7.7 trillion but the city was allocated only VND4 trillion. Therefore, the city could not complete the projects on schedule and had to pay interest and fines due to slow payments for contractors.

The HCMC People’s Committee earlier proposed the Government provide an additional VND3.65 trillion from ODA for the city’s Metro Line No.1 project and the second phase of the water environment improvement project.

However, at a conference on solutions to accelerate disbursement of ODA and concessional loans on August 1, the Ministry of Planning and Investment said the National Assembly has not approved the metro project’s cost adjustment from VND17.39 trillion to VND47.3 trillion. Therefore, the city’s proposal to have an additional VND3 trillion for the project is not yet approved at the moment.

At a working session on July 25, Minister and Chairman of the Government Office Mai Tien Dung criticized leaders of 13 provinces, ministries and agencies, including HCMC, over delayed disbursements for public projects.

According to the Ministry of Finance, the city had disbursed only 26% of finances from the central State budget required for public projects by June 17.

At the conference on August 3, HCMC Vice Chairman Tran Vinh Tuyen urged departments and districts to accelerate capital disbursement for public projects and asked the leaders to take responsibility before the city government if slow disbursements continue.

The HCMC People’s Council in early July passed the medium-term public investment plan for the 2016-2020 period with a total budget of about VND172 trillion (US$7.56 billion), including about VND22 trillion from the central State budget and the remaining VND150 trillion from the city’s budget.

Priority will be given to urgent infrastructure projects and the city will take measures to promote public private partnership (PPP) which is seen as a key capital-raising channel.

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