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Slow disbursements make ODA projects less efficient

 VietNamNet Bridge – The HCMC government said slow capital disbursements have made inroads into the efficiency of the projects funded by official assistance development (ODA) in the southern city.

VietNamNet Bridge – The HCMC government said slow capital disbursements have made inroads into the efficiency of the projects funded by official assistance development (ODA) in the southern city.

 

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Workers make preparations for construction of the underground station of Metro Line No. 1 in front of the City Opera House in HCMC. Work on this project falls behind schedule.

 

The city has 22 ODA-funded projects with total capital of nearly VND120 trillion, according to the city government’s report on limitations in attracting, managing and using ODA loans sent to the Government Office early this month. Of which, three projects have already been complete and 19 others are under construction. The ODA loans for these projects total nearly VND98.5 trillion and the city’s reciprocal capital is VND21.36 trillion.

The city pointed out a host of difficulties in implementing ODA projects, including frequent design adjustments and prolonged implementation. These have led to higher costs for project supervision and management and more spending from the budget.

The city government said the capabilities of many domestic contractors and consultants of the ODA projects are limited, and some foreign consultants are inexperienced and do not understand well the actual situation in Vietnam.

Slow site clearance and relocation of underground works, and rearrangement of traffic have impacted on project implementation and ODA disbursements in HCMC.

There are a number of ODA projects in HCMC whose loan agreements are close to an end but capital disbursements are still modest. For instance, 85% of the capital for the East-West Highway project using nearly VND8.766 trillion of ODA loans has been disbursed though the lending agreement ends on August 31.

In the same boat is the first phase of canal rehabilitation projects in HCMC with ODA loans amounting to VND4.258 trillion.

Slow implementation and capital disbursements of ODA projects are also major concerns of other localities. At a meeting over the weekend, Deputy Prime Minister Hoang Trung Hai called on ministries and agencies to speed up work on ODA projects to make the most of this capital source.

Hai attributed to the problems linked to slow site clearance, design and investment adjustments, bidding plans and personnel changes partly to the capacities of project management units and contractors. He urged drastic solutions to these problems.

Foreign donors and lenders pledged total ODA and preferential loans of US$2.25 billion for Vietnam in the first half of this year, lower than the same period last year. But disbursements rose 46% year-on-year to US$3.2 billion in the period.

Despite certain improvements, the disbursements of ODA-funded projects by sector among localities still remain inefficient, especially those in health, education, information and labor sectors.

At the meeting, ministries and relevant agencies were required to review the projects which have fallen behind schedule.

Ministries told to tightly control construction debt

* Ministries, agencies and localities have been told to closely observe regulations of the Law on Public Investments to stop debt of infrastructure construction from rising next year, and punitive sanctions will apply to those failing to fulfill this task.

According to the Prime Minister’s directive on public investments in 2016-2020 issued on Tuesday, the country targets to virtually settle all the debt of infrastructure construction by the end of this year.

The directive also requires public investments in the five-year period to be made based on the capacity of balancing capital sources and with a focus on the major projects that help fuel socio-economic growth.

In an interview with the Daily early this year, Minister of Planning and Investment Bui Quang Vinh said debt of infrastructure construction sourced from the State budget dropped to VND28 trillion from VND40 trillion last October, VND85 trillion in late 2012 and VND100 trillion in mid-2012.

SGT/VNN

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