Hesitating about the ability to absorb the 100,000 billion VND bond package for transportation

There are different views regarding the ability to absorb the government bond package worth about VND100,000 billion in the 2025-2026 period, expected to be issued for transport infrastructure projects.

There are different views regarding the ability to absorb the government bond package worth about VND100,000 billion in the 2025-2026 period, expected to be issued for transport infrastructure projects.

Worry about public investment capital

The hesitation can be seen in Official Dispatch No. 12634/BTC-QLN sent by the Ministry of Finance to the Prime Minister and a number of Government leaders in the middle of last week regarding the issuance of government bonds to invest in key national projects.

According to Mr. Nguyen Duc Chi, Deputy Minister of Finance, the total development investment capital from the central budget in 2025 is about 450,000 billion VND, 1.6 times higher than in 2024 (277,800 billion VND).

Thus, to fully disburse the medium-term and annual public investment capital, ministries, central and local agencies must make great efforts, while the implementation and disbursement time of the 2025 capital plan will only be implemented until January 31, 2026 (not considering the proposal to extend the implementation time and payment of medium-term public investment capital for the 2021-2025 period to 2026).

In addition, of the 28 projects proposed by the Ministry of Planning and Investment to be allocated from additional government bond issuance, 19 projects, if expanded, need to adjust investment procedures and must report to the National Assembly.

“After completing investment procedures, the process of assigning plans and bidding will begin, so it is almost impossible for projects to be disbursed in 2025,” said a leader of the Ministry of Finance.

According to the leader of the Ministry of Finance, currently, the demand for central budget capital for investment in the period of 2026-2030 is very large, including investment in a number of large-scale projects according to the policy of competent authorities, such as the high-speed railway on the North-South axis, the standard gauge railway Lao Cai - Hanoi - Hai Phong...

According to preliminary calculations by the Ministry of Finance, the central budget capital demand for tasks and projects transitioning from the 2021-2025 period and key tasks requiring priority capital allocation, in the 2026-2030 period, will need about 1,985 trillion VND, 1.32 times higher than the medium-term 2021-2025 period. "With the ability to balance domestic central budget revenue, it will be necessary to mobilize additional capital from domestic and foreign loans, including government bonds, to supplement the balance for development investment in this period," the leader of the Ministry of Finance analyzed.

Disbursement roadmap

Previously, the Government Standing Committee assigned the ministries of Finance and Transport to closely coordinate with the Ministry of Planning and Investment to urgently study and propose the issuance of an additional VND 100,000 billion in government bonds to invest in key national projects.

In Official Dispatch No. 11056/BGTVT-KHĐT sent to the Ministry of Finance in mid-October 2024, the Ministry of Transport proposed a list of key national projects expected to use capital issued from government bonds.

Based on the principles and criteria to meet the purpose of issuing government bond capital, the Ministry of Transport proposes a list of investment projects in 2 groups.

Group 1 includes projects and items that meet the disbursement requirements in 2025, including an additional VND 27,000 billion for the North-South Expressway Phase II (VND 25,000 billion is expected to be transferred from the medium term 2026 - 2030 and VND 2,000 billion to extend the residential underpass according to the planning scale).

Group 2 is urgent investment projects, disbursed in 2025 - 2026, including completing 2 tunnels, 4 different level intersections on the North - South Expressway Phase I, completing Cu Mong Tunnel; investing in and completing 9 expressway routes, with a length of 373 km; supplementing the missing capital, investing in completing intersections, intelligent traffic control items, weighing stations of the North - South Expressway Phase I and Phase II.

It is estimated that the additional capital demand for this group is about VND 59,100 billion, of which VND 13,000 billion will be disbursed by the end of 2025.

Mr. Nguyen Danh Huy, Deputy Minister of Transport, said that with the above list of additional capital arrangements, it is expected that by the end of 2025, project owners can disburse about 40,000 billion VND; in 2026, about 46,100 billion VND will be disbursed. In total, about 86,100 billion VND will be disbursed in the 2025 - 2026 period.

According to the representative of the Association of Road Construction Investors (VARSI), the Ministry of Finance's concern is understandable, but in reality, the implementation of the North-South expressway projects in the East was carried out with the spirit of "only discussing, not retreating", "overcoming the sun, overcoming the rain"..., the construction progress of the expressways is only 18-20 months.

“If investment preparation is carried out quickly and the problems of land and materials are well resolved, the disbursement target of VND 100,000 billion in the 2025-2026 period is not an insurmountable challenge,” analyzed a representative of VARSI.

Source: https://baodautu.vn/dan-do-kha-nang-hap-thu-goi-trai-phieu-100000-ty-dong-cho-giao-thong-d230789.html