The construction of Bai Chay Bridge in Quang Ninh Province was completed in 2006 using official development aid from Japan.

Foreign donors have urged Vietnam to speed up official development assistance (ODA) disbursement noting the country has only disbursed about 38 percent of the year’s target in the first five months.

Assistance worth $3.5 billion from the Asian Development Bank (ADB) was also yet to be disbursed, said Ayumi Konishi, the bank’s country director in Vietnam.

The Minister of Planning and Investment, Vo Hong Phuc, said that the government “highly appreciates” ODA resources and is committed to providing sufficient counter funding as “one dong in counterpart funding attracts four dong in ODA.”

The minister told the media on the meeting’s sidelines that the speed of ODA disbursement this year was higher than previous years but still “very low” compared to donor expectations.

In the first five months this year, Vietnam gained ODA of more than $1.46 billion, a year-over-year increase of 9 percent. Around $720 million of this assistance has been disbursed, mostly for projects to upgrade the country’s transportation system, water system and for urban development.

According to the World Bank, projects in the power sector topped disbursement speed, followed by those in traffic, urban upgrading, education and informatics technology.

At a time when the country is in dire need of funding to upgrade its infrastructure system and deal with environmental degradation, donors and experts warned that not using ODA funding effectively would hinder Vietnam’s efforts to achieve its socioeconomic goals and could reduce the amount of ODA committed to the country in the future.

The procedures of the Vietnamese government and the donors have not totally harmonized, Konishi told Thanh Nien in an exclusive interview after the meeting.

The government has authorized provincial administrations to carry out many projects, but some of them may lack capacity, he said, talking about possible causes that could slow ODA disbursement.

He also said the government could simplify related procedures to expedite the disbursement process.

Local authorities should not divide the project’s packages into smaller parts because it might not attract many competent bidders who often bid for larger packages, he said.

Konishi also advised that the ability of management boards be improved to make the projects more effective.

He said many ODA projects had been carried out long after the aid was promised, but this would pose the risk of undermining future funding.

In 2007-2008, price hikes in the construction materials industry led to the delay of several projects and caused significant losses.

During a meeting last week with the Ministry of Planning and Investment, WB Country Director Victoria Kwakwa said it would be difficult to offer more aid without improving the disbursement process, Saigon Tiep Thi newspaper reported.

She also said that the government should not distribute aid to localities failing to follow their commitments on disbursing the fund.

Cao Viet Sinh, deputy minister of Planning and Investment, said his ministry would identify agencies responsible for the slow rate of disbursement.

Nguyen Ngoc Thuat, deputy minister of Agriculture and Rural Development admitted disbursement was slow, saying local authorities had to spend 2-3 years to prepare the staff for each project.

However, he pointed out that the WB was also slow at times, failing to respond even six months after local authorities had forwarded their project plans.

Source: TN, Agencies