On March 8, 2011, 11 workgroups under the Ministry of Planning and Investment (MPI) will check public investment projects, particularly to revise activities on cutting down ineffective investments to rein in inflation and ensure macroeconomic stability

MPI Permanent Deputy Minister Cao Viet Sinh shed some light on this through a recent talk with VIR.

What are the major criteria for which public investments will be classified as ineffective and subject to be slashed or extended?

The criteria are clear. For example, investment projects with years-long capital allocations but facing persistent delays or those incapable to get underway in 2011 due to difficulties in site compensation or associated problems will be postponed or see extended progress.

In respect to projects by corporations or business groups, projects with unclear investment sources will not be eligible to commence construction while ineffective ones will see delays or extended progress.

Investment capital will be funneled into key and urgent projects involving in main production and business fields and those that envisage completion within 2011.

Ministries, departments, groups and local governments will embark on checking up project efficiency and cutting down ineffective investments based on above criteria first, then the MPI’s inspection teams later revise the activities and report final results to the Vietnamese government.

This year projects using state budget or government bonds capital cannot benefit from getting investment capital in advance. Does this mean the government is taking stronger measures to cut public investments?

That’s right. Usually, investment projects are eligible to carrying capital forward from the previous year or getting investment capital for the following year in advance. This year will be different.

For example, we disbursed VND177 trillion ($8.55 billion) worth state budget capital in 2010. The figure for 2011 is an estimated VND152 trillion merely with no forward-going capital. Government bonds capital will be in the same position.

Thereby, public investment may experience a sharp decline this year and this will force developers to restructure investment to enhance efficiency.

Is it true that capital restructuring and boosting public investment efficiency are key reasons behind the move?

Lengthy and ineffective investment projects will be placed on focus of inspection with a view to directing investment sources into effective projects and those having the potential to shortly reach deadline to accelerate investment pace. This comes in line with the government’s commitment to restructuring the economy.

Ministries, departments and local governments are all urged to take a comprehensive suite of measures for effective enforcement of Resolution 11/NQ-CP dated February 24, 2011 to bridle inflation and stabilise the macroeconomy.

Source: VIR