Reallocation of public investment capital

Projects like the Van Ly bridge, which have significant work to be completed, will receive additional investment capital from other projects and programs that are unable to disburse funds.

As of October 16, 2024, the disbursement rate of Quang Nam 's 2024 public investment plan reached only 46.1% of the plan assigned by the Prime Minister (central government budget sources reached 37.6%), which is far too low compared to the requirements.

Capital plan reallocation

The Provincial People's Council has approved a reduction of nearly 246.2 billion VND in the 2024 public investment plan from tasks, resolutions, and projects that are experiencing slow disbursement or are unlikely to fully disburse their planned capital for 2024. Specifically, the resolutions of the Provincial People's Council will reduce funding by nearly 33.8 billion VND, and nearly 212.4 billion VND for many other projects.

According to Mr. Dinh Chau Hieu Toan, Head of the Planning and Synthesis Department of the Department of Science and Technology, in Resolution No. 56, dated December 8, 2023, the Provincial People's Council allocated an investment expenditure budget of approximately 1,072 billion VND from land use fee revenue (included in the provincial budget). Of this amount, over 645.8 billion VND has been allocated; nearly 426.2 billion VND remains unallocated.

However, according to statistics, the current revenue from land use fees for the provincial budget is 125 billion VND. Therefore, the shortfall in land use fee revenue (budget imbalance) is over 520.8 billion VND.

To ensure budget balance, the revenue saved from land use fees, resulting from the review and adjustment of a reduction of nearly 117.4 billion VND, will be calculated and recovered to address the shortfall in land use fee revenue.

Unspent central government funds from the Road 129 project will be considered for reallocation to other central government-funded investment projects at the local level.

The remaining adjusted capital of nearly 128.8 billion VND will be allocated to tasks and projects according to the principles and order of capital allocation. Accordingly, nearly 21.7 billion VND will be allocated to resolutions and projects that have been completed, handed over for use, and have had their final accounts approved or verified, over 32.5 billion VND will be used to recover advance capital from two ODA projects (Central Region Linkage and Infrastructure Development for Ethnic Minorities Adapting to Climate Change (CRIEM)), and over 74.6 billion VND will be used to settle outstanding debts for transitional work of resolutions and projects (including counterpart funds for national target programs).

The province did not wait until near the end of 2024 to consider reallocating public investment funds from the 2024 budget. As soon as the Quang Nam State Treasury reviewed the situation at the end of May 2024, it was found that 13 departments and agencies and 12 localities had a disbursement rate of public investment funds below 15%. The Provincial People's Committee decided that by May 31, 2024, for tasks and projects that did not meet the conditions for capital allocation, the Department of Planning and Investment would advise the Provincial People's Committee to report to the Provincial People's Council for consideration of cutting the allocated capital and reallocating additional funds to other projects in need.

The Quang Nam provincial government is determined to reallocate, cut, or reverse the capital allocation from projects that are unable to disburse funds or whose disbursement is not progressing as planned, in order to supplement high-disbursement projects that need additional capital, projects that have been completed and settled, projects requiring payment of outstanding debts for work completed, land clearance, and projects where the provincial budget has outstanding debts for basic construction work.

Boost the disbursement rate.

According to statistics, along with the efforts of investors and localities in accelerating construction progress, completing projects, finalizing settlement documents, and disbursing funds, the reallocation of capital through multiple phases (approximately over 500 billion VND) has contributed to a significant increase in the disbursement rate.

The Loc Dai Lake (Que Hiep) project, unable to disburse the allocated funds this year, will have its funds cut and transferred to other projects.

One significant difference compared to previous years is that investors and localities are not "hoarding capital" but are proactively checking, reviewing, and assessing the disbursement capacity of each specific project with a low disbursement rate to propose to competent authorities to adjust the capital plan to projects that ensure the volume of work completed.

This capital can be transferred to projects that can be disbursed immediately upon receiving additional funding internally within each unit, or a proposal can be submitted to the competent authority to adjust and reduce the annual capital plan to reallocate funds to units and localities in need of additional capital.

Furthermore, for projects facing prolonged land compensation and clearance issues that cannot be continued, proposals have been made to halt the project or reduce its scale in order to finalize the project's completion.

The People's Committee of Quang Nam province has requested the Ministry of Planning and Investment and the Ministry of Finance to compile and submit to the Prime Minister for decision a reduction of over 163 billion VND in the 2024 foreign capital plan (80.4 billion VND borrowed from the provincial budget and 82.6 billion VND allocated from the central government budget) to other provinces and cities in need.

Furthermore, if Quảng Nam accepts the "risk" of reallocating central government budget funds (there will be difficulties regarding whether the central government will allocate further funds; it is possible to reallocate funds from the Road 129 project to the Văn Ly Bridge project, which has a significant volume of work but is short by approximately 50 billion VND this year), then hopefully Quảng Nam will improve its disbursement rate in 2024 to achieve the set target.

The disbursement period will end on January 31, 2025. The pressure to disburse funds has forced the government to decide to reallocate or cut capital... this has become a common practice. It is immediately apparent that cutting or reallocating capital to increase the disbursement rate are only temporary, situational solutions.

However, Mr. Nguyen Quang Thu, Director of the Department of Planning and Investment, stated that to achieve a high disbursement rate, in addition to the efforts of the investors, the cutting and reallocation of capital is only a technical, temporary solution, but it acts as a "lifeline" for boosting the disbursement rate of planned capital.

Many questions have been raised regarding the reallocation of funds and whether all the reallocated capital will be disbursed. Mr. Doan Van Thong, Secretary of the Phuoc Son District Party Committee, said that there are only two months left until the end of the year, along with the rainy and stormy season.

It will be difficult to disburse all the additional capital allocated to the locality (50 billion VND), which will drag down the district's disbursement rate. Therefore, we need to be understanding and sympathetic to the locality when it does not achieve the maximum disbursement rate.

Mr. Nguyen Duc, Head of the Economic and Budget Committee of the Provincial People's Council, said that the advisory agencies had carefully considered each adjustment item. It is impossible to adjust or increase funding for projects and localities without fully utilizing the allocated capital. The most important thing is to disburse funds on schedule, use up all the allocated capital, and use budget funds effectively for the quality of the projects and works for which the capital has been reallocated.

Comment (0)