Removing bottlenecks in public investment

The construction project of Hoc Mon Hospital in HCMC is gradually being completed. (Photo: SGGP)

Based on statistics, the public investment disbursement rate in Ho Chi Minh City was only 2 percent in the first quarter of 2023. If this situation persists, it may be challenging to achieve the disbursement plan of over VND70 trillion by the end of 2023, which requires a disbursement rate of over 95 percent.

Entanglements in terms of construction site, procedures

Out of the 65 public investment projects approved for the 2021-2025 period, 48 projects in Binh Tan District have been experiencing slow progress in their implementation since the investment policy approval. Besides the impact of the Covid-19 pandemic, one significant reason recognized by the leaders of Binh Tan District is the complicated and lengthy procedures related to compensation. These procedures include surveying the current status and approving the land price adjustment coefficient, which can take a long time. In some cases, despite having construction plans, the compensation work was delayed due to disagreements on compensation prices, leading to complaints and further delays in handing over the site for construction.

Binh Tan District also faces difficulties in compensating for agricultural land located in residential areas, especially for local school projects. The compensation prices for agricultural land in these cases are considered too low, leading to disagreement among the majority of households.

In Phu Nhuan District, there are currently two delayed public investment projects: the renovation and expansion of Truong Quoc Dung Street and the construction of the second branch of Phu Nhuan District Hospital. Of these, the Truong Quoc Dung Street project, approved for investment in 2016, was separated into two independent projects: a site clearance compensation project and a construction and installation project. However, the new Law on Public Investment, which came into effect in 2019, stipulates that only national key projects and group A projects can have their compensation work separated into independent projects. This is one of the reasons why the project had to adjust its investment policy. Similarly, some previous projects under the investment decision-making authority of the District People's Committee are now subject to the adjustment authority of specialized departments, causing difficulties for the district.

Mr. Tran Van Bay, Deputy Director of the Department of Natural Resources and Environment, has identified two main factors affecting the disbursement of public investment: price appraisal and compensation and resettlement support policies. While the appraisal documents have been resolved quickly by the department, the compensation work is still lagging due in part to inadequate preparation by the district, resulting in delays and outdated compensation prices that have provoked public dissatisfaction. In fact, the longer a project is delayed, the more complex and challenging it becomes to resolve as compensation policies, regulations, and procedures evolve over time.

Focusing on dismantling for large projects

In 2023, HCMC is tasked with disbursing over VND70 trillion in public investment capital. However, only four management boards in the city have the funds to be disbursed, accounting for 67 percent of the total, including the Urban Railway Management Board, the HCMC Management Board for Traffic Works Construction and Investment, the Management Board of Construction Investment Projects for Civil and Industrial Works, and the Management Board for Urban Infrastructure Construction Investment Project. In 2022, the Management Board of Construction Investment Projects for Civil and Industrial Works was the most delayed in terms of disbursement of public investment capital.

By early August 2022, the Management Board of Civil and Industrial Construction Investment Projects had disbursed less than 10 percent of the capital for 12 projects, with some even at zero percent. These include high-value projects like the HCMC Children's Hospital (VND1 trillion), Tan Kien Medical Cluster (VND277 billion), and Planning Exhibition Center (VND350 billion).

To improve the disbursement of public investment capital, HCMC will focus on promoting the Ring Road No.3 project from the beginning of 2023 to set an example for the implementation of public investment projects.

According to Director Luong Minh Phuc of the Traffic Department, the project will traverse four localities, namely Thu Duc City, Binh Chanh, Cu Chi, and Hoc Mon districts. In 2023, the project will receive a total capital disbursement of VND23 trillion, accounting for 80 percent of the Department of Transportation's capital. Out of this amount, nearly VND5 trillion will be allocated to construction and installation projects, while VND18 trillion will be disbursed for land compensation, site clearance, and resettlement purposes.

According to Director Luong Minh Phuc, all capital has been allocated, and the Department of Transport has created a disbursement schedule for each month and quarter. It is anticipated that the disbursement will reach 72 percent by the end of the third quarter and complete 100 percent by the end of the year.

Historically, the disbursement rate of public investment capital has been concentrated in the final months of the year. However, the lessons learned from 2022 underscore the importance of starting off strong in the early months of the year. By doing so, procedures can be completed promptly, and capital delivery can be expedited, preventing the accumulation of year-end work and ensuring that targets are met successfully.

According to Mr. Hoang Tung, Chairman of the People's Committee of Thu Duc City, based on the progress of each project in the area, disbursement is expected to be concentrated in September and October. He also suggested that having a detailed disbursement progress table for public investment would make it easier to monitor and urge the process.