Tightening management over public investment

Tightening management over public investmentDisbursement of investment capital for basic construction from the State budget in the first six months of 2015 is estimated at a lower level than the same period last year.
Focused basic construction capital only reached 45% of the assigned plan, while the same period in 2014 reached 49.6%. Funding mobilised from government bonds was only 32.4% of the projected schedule - the same period in 2014 was at 40.3%. Slow disbursement progress compared to the economy’s needs is affecting the efficiency of public investment, as well as public investment restructuring, one of three focus areas of the overall economic restructuring process.
Public investment management thinking has recently moved towards being more rigorous and transparent, and in the direction of decreasing overspreading of State investment. To realise this policy, public investment management policy systems have been built, supplemented and modified to meet the requirements of strict and efficient control of public investment. In particular, it should be made clear that structural renovation and efficiency improvement of public investment, combined with the role of the State and the market in allocation and use of resources, is the responsibility of relevant ministries, branches, localities and business communities.
Accordingly, investments or investment support using State funds must ensure separation of State management function (competent person who makes investment decisions) and project management functions (investors). This means that management mechanism for investment capital sourced from the State budget must be strengthened towards reforming administrative procedures and improving accountability of authorities at all levels. The efficient of investment capital from the State budget must always be accompanied with strengthening financial discipline.
Currently, in order to improve efficiency of the management of State budget sourced investment, the Ministry of Finance is implementing amendments on a series of mechanisms for management, billing and settlement of investment capital.  A meeting to collect comments on financial investment management mechanisms and solutions to accelerate disbursement in 2015 took place in Hanoi on June 22. The Ministry of Finance drafted a synchronous financial management mechanism, including payment mechanisms, cost management mechanisms and management mechanisms of settlement of completed projects.
With proposed amendments and additional mechanisms discussed at the event, the scope and object of investment management under the administration of financial authorities at all levels is expanded associations with higher responsibilities. In addition to responsibility for managing payments for contractors, financial agencies (particularly the State Treasury) are assigned the additional responsibility of managing the cost of project management boards and stakeholders’ operations while finalising the balance sheet once a project is completed.
With such synchronised amendments, it is expected that management over State capital will continue to be tightened and be more effective, particularly the increased liability provisions of the State Treasury in evaluating the implementation of advanced payments to contractors, and co-ordinating with investors in withdrawing capital in case advance funds are not used properly. This will contribute to limiting the negative in settlement of completed projects. From those supplements, the management of State capital will see significant changes, in line with strengthening financial discipline and administrative reform to improve the efficiency of public investment.
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All comments [ 10 ]

Gentle Moon 23/6/15 22:31

Scattered public investment causes policymakers major headaches and costs major national economic losses. Resolving the issue is no easy task.

Jane smartnic 23/6/15 22:32

Who are responsible for inefficient investment

Love Peace 23/6/15 22:33

Vietnam, only recently emerging from low-income nation status, needs large infrastructure investments—but its sporadic nature has caused alarming unsettled debts.

Pack Cassiopian 23/6/15 22:33

localities to change their public investment philosophy, extravagant offices and luxury cars are indefensible considering current economic difficulties and should be abandoned in favour of “road, school, or hospital projects.”

Deck Hero14 23/6/15 22:34

laws like the Law on Corruption Prevention and Control and the Law on Thrift Practice and Waste Prevention must be respected and enforced.

Only Solidar 23/6/15 22:35

legal loopholes in project appraisal, implementation, and management that lead to massive wastes of capital and human resources.

MaskOf Zero 23/6/15 22:36

Clarifying the rights and responsibilities of agencies, organisations, and individuals is imperative, adding transparency in public investment management should also be encouraged.

yobro yobro 23/6/15 22:37

the government to explicate clear public investment project criteria that takes the solvency of individual agencies and localities into account.

LawrenceSamuels 23/6/15 22:38

Many projects underwhelm expectations with delays caused by capital shortages or misuse following completion.

John Smith 23/6/15 22:40

the need to carefully distribute annual investment allocations among regions and between short and long-term plans.

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