Plunger used to unblock ODA

The Ministry of Planning and Investment (MPI) and the World Bank (WB) are recommending actions to disburse about $1.1 billion to slowest moving projects funded by the WB.

They include a $65.9 million customs modernisation project, an $80 million tax administration reform scheme, a $112.6 million clean water supply development project, a $124.7 million coastal cities’ environmental sanitation project, a $225 million road network improvement project, and a $2.7.7 million Mekong Delta transport infrastructure development project.

According to the MPI’s Foreign Economic Relations Department, the projects were initiated years ago but suffered from slow capital disbursement. They are expected to contribute to infrastructure development and simplifing Vietnam’s administrative procedures.

The customs modernisation project, slated for completion next June, has only received $1.8 million, or 3 per cent of its planned funds.

Disbursed capital for the tax administration reform scheme, which began in June 2008, has reached only $300,000, or 0.4 per cent of the planned credit. Meanwhile, the disbursement for the water supply development project, which began in November 2005, has reached $26.3 million, fulfilling just 23 per cent of the financing plan.

“The disbursement for those projects is lagging behind the requirements of the World Bank and the Vietnamese government,” said MPI vice minister Cao Viet Sinh.

The MPI’s Foreign Economic Relations Department remarked the main barriers hindering the disbursement included complicated procedures, slow assessment, slow bidding approval and weak project management ability.

“We must find solutions to speed up disbursement,” Sinh said.

Victoria Kwakwa, general director of the WB in Vietnam, said improved disbursement would help Vietnam attract more financial support from the WB.

In a recent meeting between the MPI and the WB, both sides discussed specific solutions to remove hindrances in the projects’ disbursement.

The Mekong Delta Transport Infrastructure Development, for example, was delayed due to provincial project management staff being unfamiliar with the WB’s resettlement safeguard policy, leading to non-compliance by some provinces when implementing compensation and resettlement.

To handle this issue, the MPI and the World Bank proposed that the provinces, including Tra Vinh, Ben Tre, Bac Lieu and An Giang, stop current compensation activities and continue payment only once they have obtained the bank’s go-ahead.