Khanh Hoa states the reason for the difficulty in bidding for 500 billion VND of local government bonds

Khanh Hoa Provincial People's Committee organized two local government bond auctions in 2023 with a volume of 500 billion VND but no investor won the bid.

Khanh Hoa states the reason for the difficulty in bidding for 500 billion VND of local government bonds

Khanh Hoa Provincial People's Committee organized two local government bond auctions in 2023 with a volume of 500 billion VND but no investor won the bid.

In an interview with a reporter from the Investment Electronic Newspaper - Baodautu.vn , Mr. Nguyen Tan Tuan, Chairman of the Khanh Hoa Provincial People's Committee, said that with the policy of Khanh Hoa province being able to borrow through the issuance of local government bonds, borrowing from domestic financial institutions, other domestic organizations and from foreign loans from the Government to the province for re-lending with the total outstanding loan balance not exceeding 60% of the provincial budget revenue enjoyed according to decentralization, the issuance of local government bonds encountered many difficulties.

According to Mr. Tuan, 2023 is the first time the province has issued local government bonds. Khanh Hoa Provincial People's Committee has organized two local government bond auctions in 2023 with a volume of VND 500 billion on December 4, 2023 and December 8, 2023.

However, due to market fluctuations, investors all bid at interest rates higher than the interest rates prescribed by the Ministry of Finance, so no investor won the bid.

In Resolution No. 78/NQ-HDND dated December 7, 2023, the Provincial People's Council approved the Project to issue local government bonds of Khanh Hoa province in 2024 with an amount of VND 855.6 billion for 7 key projects.

On November 7, 2023, the Ministry of Finance requested the People's Committee of Khanh Hoa province, based on the remaining funds of the provincial budget, to review and ensure the effective use of local budget sources to allocate capital for public investment projects in accordance with the provisions of law and local authority; only issue local government bonds that are really necessary, ensuring the effective use of mobilized capital in accordance with the provisions of law.

“Based on the review of the budget allocation for development investment expenditure in 2024 and the increased land use fee revenue in 2023, the current local resources ensure a balance of projects expected to allocate capital from local government bonds in 2024. Therefore, for 2024, the Provincial People's Committee reports to the Provincial People's Council to consider not issuing local government bonds to ensure that local budget capital is used effectively, while reducing interest costs”, Khanh Hoa Provincial People's Committee stated the reality.

Source: https://baodautu.vn/khanh-hoa-neu-ly-do-dau-thau-500-ty-dong-trai-phieu-chinh-quyen-dia-phuong-gap-kho-d238199.html