Vietnam to tighten management of state-funded investments: PM

Laws - The Vietnamese prime minister has issued a directive to ask ministries, agencies and localities to carry out a number of principles and measures to improve management of investments funded by state budget and government bonds.

Under the directive, plans, programmes and projects using the state budget and government bonds must strictly comply with socio-economic development strategy in 2010-2020 and socio-economic development plans in 2011-1015.

Vietnam plans to trim down public investment but instead raise funds from different economic sectors at home and overseas, especially for socio-economic infrastructure projects.

All ministries, sectors and localities must follow current regulations in the approval power for investment projects (including new projects and adjusted ones).They also take responsibilities for closely monitoring the scope, objective and business areas of the projects as approved.

Investments will only be approved after defining where to take money from and the ability of balancing funds in each level.

Signers of investment projects must bear responsibility for any losses caused by delayed projects as a result of not clearly defining capital source and ratio of state-funded capital.

Especially, from 2012, all approved projects be implemented within planned capital to avoid outstanding debts in the construction sector.

Capital allocation from state budget and government bonds must be done under 5 year investment strategy, but for 2011-2015 period, we have to make annual investment plan for 2011, 2012 and 3 year investment plan for 2013-2015. Capital investment plan for 2012 must be in line with 2011-2015.

Budget allocation Plan for 2012

The capital allocation from the state budget and government bonds is made with the following priorities:

Distributing to completed and handed over projects which will be put into operation before 31 December,2011

Projects to finish in 2012 ( base on schedule, capital balance capacity and implementation capacity in 2012) and for ODA projects.

The remaining ( if any) will be granted for selective on-going and new projects. Only new, urgent projects whose total cost already has been approved before October 25,2011 can be funded.

Projects invested by the state budget but have not get approval for 2012 capital disbursement are classified into 2 groups:

Projects can be switched to other investments as BOT, PT, PPP...

Ministries, sectors and localities will use other legal capital sources to continue or hang-up the rest projects in 2012 which cannot be switched to other investments.

Capital allocation, government Bonds Distribution Plans

According to preliminary estimates in the four years 2012-2015, the government bonds only meet about 36 percent of the demand for capital projects on the list was the National Assembly Standing Committee for approval.

The government will strictly carry out the Directive, not add the new projects as the government bonds capital will meet only 36 percent approved projects' capital demand, the prime minister said.