Chairman of the Ho Chi Minh City People's Committee Phan Van Mai speaks at the conference (PHoto: SGGP)
Speaking at the conference, Chairman of the Ho Chi Minh City People's Committee Phan Van Mai said that the disbursement progress has so far achieved 11 percent, which is lower than last year with 17 percent.
He added that many units have had low disbursement rates; therefore, all units and investors must clearly define their responsibilities, review each project, and solve any problems to ensure progress, not accumulate at the end of the year.
In order to speed up the progress of projects, Chairman Phan Van Mai asked the units to report in detail and analyze each project for solutions. Reporting at the conference, Director of Ho Chi Minh City Department of Planning and Investment Le Thi Huynh Mai said that most of the units with too low disbursement rates do have not much capital and are currently in the process of implementing procedures, so they have not completed the formalities for disbursement.
She explained some projects have been assigned large capital, but have not been disbursed because they have just completed the procedure to adjust the investment decision; for instance, the Level 1 network development project with the capital of VND 96 billion (US$4,1 million).
Additionally, they are implementing bidding work; for instance, the project to build an organ transplant center and high-tech surgery area of Children's Hospital 2 with the capital of VND200 billion. Meanwhile, others are in the process of implementing procedures to adjust the project including the project to build a wastewater treatment system worth VND 152 billion and the project of compensation, site clearance, and resettlement of Hi-tech Park with an investment of VND80 billion.
Moreover, some projects’ investors changed so it took time for the handover of documents; for instance, the Investment project to build the City Planning Exhibition Center with the capital of VND350 billion.
Due to the change of investors and difficulties in handing over the site for project construction, the progress of the construction project of Pham Ngoc Thach Medical University - campus 2 with the investment of VND590 billion is slower than its schedule.
In addition, a number of ODA-funded projects have not yet been disbursed because they have just been completed or are carrying out investment procedures. Specifically, the construction project of HCMC urban railway line No. 1 Ben Thanh - Suoi Tien has just been approved to adjust the estimate in April 2022. The HCMC Green Traffic Development Project is currently waiting for technical design approval while the project to improve the water environment in the city of Tau Hu - Ben Nghe - Doi - Te canal basin, phase 2 is undergoing loan contract signing with the Ministry of Finance.
Furthermore, slow disbursement of the Ho Chi Minh City Environmental Sanitation Project - Phase 2 and the Project of Compensation and Resettlement to serve the Project of Construction of Metro Line No. 2 on Ben Thanh - Tham Luong Line is due to construction site problems. Since then, the disbursement of the entire ODA-funded projects has encountered many difficulties, possibly not completing the capital plan without drastic solutions from the investors and relevant agencies.
A leader of the Department of Planning and Investment also pointed out the reasons for fluctuating input material prices, difficulties in implementing regulations on public investment, procedures related to ODA loans, difficulties related to site clearance work...
In addition, a number of projects are facing investment procedures such as adjustment of implementation time, undergoing finalization procedures, increasing the total investment amount, and are being submitted for project adjustment, adjustment of ownership, and investment program.
Director of the HCMC Department of Planning and Investment Le Thi Huynh Mai affirmed if these difficulties are removed, it will speed up the project implementation and improve the city's disbursement rate for public investment.
Director of Ho Chi Minh City Department of Finance Pham Thi Hong Ha added that according to the investment capital allocation list for the city, up to VND 51,000 billion, but only more than VND 30,000 billion has been allocated, and VND 17,000-18,000 billion has not been allocated accounting for 30 percent-40 percent of the total city budget. That is quite a big number, which needs to be disbursed soon. Investors need to review the disbursement progress to propose additional capital as well as have a detailed plan to speed up the disbursement progress and transfer capital to effectively use the assigned capital plan.
Regarding this situation, Chairman Phan Van Mai said that due to both subjective and objective reasons. The price of building materials increases, affecting investors; as a result, some departments reported that many contractors had no choice but to abandon the project, losing their deposit but could not do the work.
Therefore, the city must propose to the central government to take measures to remove investors when the price of materials increases. Above all, the government should have a mechanism to monitor the price of construction materials.
In addition, the implementation of capital allocation procedures is still slow, and the coordination between departments, departments, and branches is not very synchronized and tight, leading to slow procedures. These reasons have made the disbursement progress not achieve the goal.
Mr. Mai directed that departments must perform well in the leading role of public investment; need to find sources of mobilization for investment, as a basis for lowering the ceiling of medium-term investment capital in the future.
The Chairman of the People's Committee of Ho Chi Minh City emphasized that related agencies must take heed of the investment portfolio. The roles and responsibilities of each management unit and each investor must be identified. Departments must maintain monthly and quarterly meetings for monitoring, progress as well as evaluation to have a resolution of problems with each project.
Two working groups will be set up. One group will focus on large capital projects but slow disbursement, assessing causes and proposing solutions while the second group will focus on site clearance, having difficulty can organize a symposium on this issue.
The Department of Planning and Investment was assigned to chair and organize a conference to guide investment-related procedures. Early allocation of reserve capital should be done for 44 projects; organizing coordination with departments and sectors from project investment procedures to finalization and disbursement must be more synchronous, stricter, and more convenient.
In addition, Chairman Phan Van Mai also requested that adjustment of any projects that need the approval of the municipal People's Council must be submitted immediately in the next meeting, to be resolved early.
Additional VND119,000 billion for the completion of projects
The slow implementation of related procedures for project implementation affects the progress of HCMC's medium-term public investment plan for the 2021-2025 period, making it difficult for the southern metropolis’ proposal to the National Assembly. The city petitioned to implement a mechanism to proactively decide on the addition of the total capital and the list of public investment projects in the city's medium-term public investment plan for the period 2021-2025, which is expected to add VND119,000 billion.
The Department of Planning and Investment of Ho Chi Minh City has just issued its document No. 1549/SKHDT-THQH to governing bodies and investors, proposing the need to extend the implementation time and disbursement of projects using local budget funds from 2021 to 2022. An estimated 118 projects with a total capital of nearly VND1,400 billion are in the area to be transferred.
These projects slated to be completed and put into use in 2022 have problems with compensation, resettlement, and site clearance.
The project capital plan has not been allocated because the annual capital plan has been arranged in accordance with the medium-term capital plan that has been assigned to the project but the projects have not been completed in time in 2021.
Disbursement of these projects can’t be conducted in the 2021 capital plan due to epidemic outbreaks or other reasons. Responsible agencies for these projects must report to the Department of Planning and Investment before May 20.
In addition, additional 44 transitional projects are expected to increase the total investment, which are transitional projects supplemented with the medium-term public investment plan for the 2021-2025 period from the medium-term reserve. Transitional projects with the proportion of capital already allocated in the public investment plan for 2021 and 2022 reaching less than 40 percent of the project's total medium-term investment plan for the 2021-2025 period including 331 transitional projects constructed from 2020 or have been under construction for three years but has a ratio of allocated capital below 40 percent.
