Gov’t wants to adjust criteria for classification of important national projects

Some economists warn that the higher investment capital for national important projects may make it more difficult to manage public projects and lend a hand to unnecessary use of state funds.

The government, when drafting the amended public investment law, proposed raising the investment capital for national important projects from VND10 trillion to VND35 trillion.

Gov’t wants to adjust criteria for classification of important national projects

Meanwhile, the National Assembly’s Finance & Budget Committee thinks the investment rate should be raised from VND10 trillion to VND20 trillion.

However, the proposals have not been applauded by many economists, who warned that the higher capital would lead to higher rate of loss during the investment.

They believe that there is no need to adjust the current investment level of VND10 trillion for national important projects, saying that only two projects of this kind are implemented for the 2016-2020 period. No problem has arisen during the implementation of the projects.

Dinh Trong Thinh from the Finance Academy commented that VND10 trillion should not be raised, especially when the loss rate in public investment is getting higher.

“Ministries and branches, which usually spend trillions of dong and have got used to wasting big money, may find VND10 trillion a small amount of money. But for Vietnamese people, this is really a big figure,” he commented.

The lifting of investment capital for national projects, if approved, would bring big benefits to ministries, state agencies and contractors as well. If so, they will have the right to make investment decisions for projects capitalized at below VND20 trillion or VND35 trillion, without having to ask for the National Assembly’s permission.

The lifting of investment capital for national projects, if approved, would bring big benefits to ministries, state agencies and contractors as well. If so, they will have the right to make investment decisions for projects capitalized at below VND20 trillion or VND35 trillion, without having to ask for the National Assembly’s permission.

An analyst commented that he cannot see any reason to raise the investment capital, as trillions of dong could be wasted in implementing every project.

 

“Some officials considered inflation and price increases to propose the adjustment. However, the price increases are not big enough to double or triple the investment capital,” he said.

He went on to say that in the 2010-2020 period, the average inflation rate is expected to be 3-3.5 percent per annum, or 35 percent for 10 years.

“So, why do we have to increase the investment capital by twofold?” he said.

“Even the projects with the capital of VND10 trillion are difficult for us to manage, let alone VND20 trillion or VND35 trillion projects,” he added.

Thinh from the Finance Academy commented that the management and supervision of the national projects were stricter in the past, while management has been loosened in recent years.

He said that tightening supervision over the implementation of state-funded projects should be done to be sure that money is spent for the right purposes.

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Nam Mai

 
 
 
 
 
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