At the 8th session of the 13th Standing
Committee meeting of the National Assembly in Hanoi on May 5, it was discussed
that even though public investment funding on construction projects had
increased, the results were far from effective.
Vietnam
is planning on restructuring its economy, which will include cutting down on
public investment funding. The restructuring plan will be submitted to the
National Assembly at its next session.
At the
National Assembly meeting it was announced that public investment funding in
2011 had increased, with the total spending last year being VND100,167 billion
(US$ 4.8 million), exceeding by 13.8 per cent the estimated budget. Around 23
per cent of this amount was for development projects.
For
instance, the transport sector had the highest investment with VND2,167
billion, equivalent to 29 per cent of the whole year budget plan and 11.4 per
cent higher than in the same period last year.
Despite
this huge expense, the sector is requiring more funding in the future.
According to the industrialisation plan set forth by the Ministry of Transport
till the year 2020, the sector will invest another VND223 trillion.
More
noticeably, the ministry announced its demand for VND12,170 billion to upgrade
its offices and those of its agencies and sub-divisions. Apart from this
amount, it requires VND7,950 billion from 2012-2015 for constructing new
headquarters and other offices. (VND1 trillion for the headquarter building and
VND4,800 billion for offices of its agencies and departments).
Phung
Quoc Hien, chairman of the Finance and Budget Committee, said that in the
context of public investment funding, the country also needs to boost its
savings but some sectors still continue to spend far too much; this will
increase pressure on public investment restructuring and comprehensive economic
planning.
Another
factor of concern is that increased public investment funding on construction
projects has not been as effective as expected in the eyes of the people.
Participants at the NA meeting pointed out that lack of interest and lax
supervision of construction projects was the reason that most projects have
failed to deliver.
According
to the state budget law issued in 2004, investments will be allocated to
sectors and localities offering more initiative, and local governments
themselves will approve the projects while only a few will be approved by the
Prime Minister. It is a loophole that has led to waste at a time when the
country needs to boost its savings.
Meanwhile
related agencies promise supervision of construction projects but take no
responsibility. According to a report of the Ministry of Planning and
Investment, 110 of the 124 agencies sent its reports of supervision of public
construction works in 2011, accounting for 88.7 per cent , much lower than
2010.
Furthermore,
it was discovered that slow progress of many projects used up 30 per cent of
state investment funding. For instance, during 2011, Vietnam had a total of
38,420 projects, of which 4,436 projects were running behind schedule.
The
slow progress of these projects is one of the reasons for increase in costs and
a negative impact on the economy.
SGGP
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