The Ministry of Planning and Investment said that the disbursement of public investment capital nationwide as of July 31 was about VND232,100 billion, only reaching 34.68% of the plan assigned by the Prime Minister, while in the same period in 2023 it reached 37.85%. Of which, up to 33 ministries, central agencies and 25 localities disbursed lower than the national average. In particular, some localities have a disbursement rate of less than 20% such as Ho Chi Minh City, Phu Yen, Bac Ninh...

Why is the progress slow?

Noting the reality of 2 of the urban beautification projects that Ho Chi Minh City residents are looking forward to, namely the Xuyen Tam canal renovation project (connecting from Vam Thuat river to Nhieu Loc - Thi Nghe canal, belonging to Binh Thanh and Go Vap districts) and the environmental improvement of the North bank of Doi canal in District 8, the representative of the Ho Chi Minh City Urban Infrastructure Construction Investment Project Management Board, the investor of the 2 projects, said that the current difficulty is adjusting the project investment policy due to the increased cost of compensation for site clearance (GPMB) compared to before; the arrangement of resettlement land and the GPMB work also encountered many difficulties, causing the disbursement of public investment capital to not be as effective as expected.

For the environmental improvement project of the North bank of the Doi Canal, according to the total investment approved by the Ho Chi Minh City People's Council, the estimated compensation cost for site clearance is VND 3,583 billion. However, during the implementation process, the project has changed its compensation plan and policy when applying the Land Law that has just taken effect from August 1, 2024.

At the same time, the compensation, support and resettlement policy for housing projects on and along canals in Ho Chi Minh City is expected to apply a support level of 70% of the compensation price for residential land. The Compensation and Site Clearance Board of District 8 updated the estimated compensation and site clearance costs to VND6,000 billion, an increase of VND2,485 billion compared to the total approved investment. Therefore, it is necessary to adjust the project investment policy as a basis for implementing compensation, support and resettlement for the project, expected to be submitted to the Ho Chi Minh City People's Council in the upcoming September session.

In addition to adjusting the project investment policy, the housing fund for resettlement for the project is also waiting for the departments and branches to coordinate with District 8 to resolve. "Currently, the Infrastructure Project Management Board is trying to speed up related procedures to soon get the feasibility study report approved in the third quarter of 2024, as a basis for implementing the work of preparing construction drawings and estimates; implementing compensation, resettlement support and starting construction in 2025 as planned" - said a representative of the Infrastructure Project Management Board.

Regarding the Xuyen Tam canal renovation project, the main difficulty is due to the huge amount of land acquisition and clearance. Currently, Go Vap and Binh Thanh districts are urgently carrying out procedures to complete the handover of the site to the Infrastructure Project Management Board to start construction as planned. Go Vap district is expected to hand over the entire route in December 2024.

As for Binh Thanh district, due to the large volume of site clearance, it is expected that by April 2025, the district will complete the procedures to hand over the site to the investor to start construction of the two packages XL-01 and XL-02.

In addition to the above two projects, some packages of the component project 1 of Ho Chi Minh City Ring Road 3 are also behind schedule. Typically, in the area through Binh Chanh district, many sections of the ground are ready but have not been implemented due to lack of sand, which is a challenge for the goal of completing the entire project by 2026.

The Tham Luong - Ben Cat - Nuoc Len canal renovation project has 9/10 construction packages currently being deployed for testing reinforced concrete piles. However, the construction work has encountered some difficulties when 54 households and businesses have re-encroached on the land that had been handed over to the project in phase 1; some locations on the canal banks have been polluted by garbage, hindering the construction.

In Dong Nai, a series of key transport projects such as 2 component projects of the Bien Hoa - Vung Tau Expressway project, Ho Chi Minh City Ring Road 3, riverside roads and parks, Dong Nai river embankment, Cai riverside road... have not met the capital disbursement plan, although the authorities as well as localities have vigorously implemented the acceleration of site clearance. Representatives of a number of investor units all said that the biggest obstacle affecting the progress of disbursement of public investment capital in the province at present is still site clearance for project construction.

Not only difficult in site clearance

Acting Chairman of Dong Nai Provincial People's Committee, Mr. Vo Tan Duc, admitted that the site clearance work for projects in the province is still slow, leading to the disbursement progress of public investment capital not meeting expectations. "At the beginning of the year, the units committed to disbursing 50% of the capital plan by the end of June. However, by the end of July, the province had only disbursed more than VND 5,400 billion, reaching more than 28% of the capital plan" - Mr. Vo Tan Duc pointed out in a meeting to report on the socio-economic situation in early August.

Mr. Le Ngoc Linh, Director of the Department of Planning and Investment of Ba Ria - Vung Tau province, also pointed out that the reason for the low disbursement of public investment capital in the province is due to difficulties and problems with compensation and site clearance; difficulties in completing investment procedures and related to the project implementation process. Specifically, up to now, the province still has 62 projects that have not completed compensation and site clearance, some projects are stuck with problems related to defense land and forest land.

In addition to the above problems, there is also a lack of coordination between investors and local authorities, lack of determination, lack of initiative, and the leaders have not completely resolved the problems. Part of the reason is also due to the limited construction capacity of the contractor.

Chairman of the Ho Chi Minh City People's Committee Phan Van Mai pointed out that the difficulty lies in a stage such as: planning, site clearance, procedures... Many projects have to wait for new laws such as the 2024 Land Law, effective from August 1, 2024, and the 2023 Bidding Law, effective from January 1, 2024, but by the end of April, the guiding documents were fully issued, partly extending the time to select contractors to implement the project and the time to carry out the following steps.

In addition, some projects with large investment capital that must be disbursed by the city are facing difficulties and procedural problems and are in the process of coordinating with central ministries and branches to resolve them, so the allocated capital cannot be immediately disbursed. In addition, coordination between relevant agencies, including project development partners, to disburse ODA capital and preferential loans from foreign donors is still slow, affecting the progress of project implementation and completion...

An official in charge of public investment at a state agency in Ho Chi Minh City pointed out some more reasons for the slow disbursement rate of public investment. For example, the group of works and projects using transitional budget capital may not have the volume to continue to disburse, so it is slow. Because usually at the end of the previous year, after the bidding is completed, the investor (departments, branches, districts, and towns) has already made an advance payment to the contractor, now there is not or is not enough volume to continue to disburse. Therefore, the first months of the year often stop at carrying out procedures to complete the documents. For the group of works preparing the project, there may be delays in the project appraisal and approval stage; delays in organizing the selection of contractors...

In addition, some new regulations in the 2023 Bidding Law are also creating barriers affecting the bidding progress, project approval, departments, branches, districts and towns in localities. For example, previously, Circular 08/2022/TT-BKHĐT detailed the provision and posting of information on bidding and contractor selection on the national bidding network, stipulating that even if only one contractor participates in an online competitive bidding package, the investor can immediately open the bid for evaluation.

(To be continued)

(*) See Lao Dong Newspaper from issue dated August 13