Vietnam’s Minister of Planning and Investment, Nguyen Chi Dung, presented the proposed amendments to the Public Investment Law before the National Assembly, emphasizing a transformative shift towards local autonomy and away from central dependency.

The revisions seek to embody the principle, “local decisions, local actions, local accountability,” with the National Assembly and central government focusing on oversight, policy development, and regulatory support.

According to Minister Dung, the central government and National Assembly will take on a guiding role, enhancing institutional frameworks and monitoring outcomes, while decentralizing project decision-making to local leaders.

This update aims to clarify accountability at every level, streamline administrative procedures, and avoid bureaucratic bottlenecks, preventing localities from becoming dependent on central-level approval.

The most significant proposal in this revision is to raise the budget threshold for national projects from VND 30 trillion ($1.25 billion) and above. The draft also suggests that ministry heads and leaders of central agencies may now approve Category A projects under VND 10 trillion ($415 million). For projects between VND 10 trillion and VND 30 trillion ($415 million to $1.25 billion), approval would require the Prime Minister's authorization.

The revised law also recommends decentralizing the authority to extend budget allocations. For national funds, the authority to extend deadlines would shift from the Prime Minister to the relevant project decision-making level. For local budget allocations, authority would shift from the Provincial People’s Council to district-level People’s Committee Chairpersons.

For nationally funded projects, Category A, B, and C projects under VND 10 trillion would be permitted a budget allocation extension of up to one year, while Category A projects ranging between VND 10 trillion and VND 30 trillion would receive up to two years. The Prime Minister would retain authority for extensions for central budget allocations.

Speaking before the Assembly, Le Quang Manh, Chair of the National Assembly’s Finance and Budget Committee, noted that increasing decentralization and local accountability aligns with current needs. However, he cautioned that the recent changes should be carefully evaluated for their long-term impacts and recommended a supplementary assessment to gauge the policy’s effectiveness.

Manh added that adjustments to project categorization (which effectively promote decentralization) are needed, but adjustments must be balanced and aligned with national GDP growth, project management capacities, and cost indices.

“We suggest further reviewing the proposed increases in project budget thresholds, ensuring they reflect GDP growth, local project management abilities, and national construction cost indices,” he said.

Quang Phong