The Ministry of Planning and Investment has consulted the Prime Minister to issue the directive no 1792 to stay firm on curbing the haphazard and unsynchronized investments in the country, Minister Bui Quang Vinh told Tuoi Tre.

Minister of Planning and Investment Bui Quang Vinh

Vinh said many localities have approved huge investment plans regardless of knowing if they can afford the money needed.

They just approve the plans, and then started to seek capital, he said.

Under the directive to take effect this year, it is stipulated that localities acquire the adequate capital for the projects before giving them the go-ahead.

If the localities cannot mobilize enough capital for a project, they should put it aside.

If any authorized individual green-lights the projects while the capital problem is unsettled, he will be held personally responsible if the project is delayed or fails to reach completion, Vinh said.

In the past, many provinces have started their investment projects prior to asking for approval from the government. However, under the new regulation, any province wishing to implement investment projects using the government capital will have to seek permission from the Prime Minister before any work is allowed to begin.

“I believe that with this policy change, there will be no haphazard and unsynchronized investments,” Vinh stated.

Vinh added that in the future, the government will announce capital allocation over a five-year term, rather than the current one year.

“It means the government will announce the localities countrywide on the budget allowable for investment in the next five years, which their investment planning should base on.”

Commenting on the incomplete investment projects around the country, the minister said that thanks to the government’s cutting public spending, state capital has been focused on completing many key projects.

The number of projects expected to reach completion this year has amounted to 4,400, much more than previous years.

However, he admitted that many projects still face capital shortage due to haphazard investments.

“We have to accept the fact that many projects will have to be halted, since in order to complete all of the approved projects, we will need a massive capital of VND500 trillion (US$24 million), while the government bond alone can only afford VND180 trillion,” Vinh said.

“Two thirds of the projects will have investment suspended. We have no choice.”

This year the government will develop the capital plan for a three-year term, and the localities can use the allocated capital to boost the completion of the unfinished projects, he said.

“They will also have to limit the approval for new projects.”

Source: Tuoi Tre