The Ministry of Planning and Investment has issued an instruction that will more closely regulate government-funded investment projects from the start of work until completion.
The instruction, which was issued on December 19, relates to the implementation of the National Socio-Economic Development Plan over the next year.
The ruling requires the planning and investment, finance, and inspection sectors to participate in the early stages of contract negotiation, procurement and hire, and bidding on government-funded investment projects.
This is aimed at ensuring their transparency and effectiveness, in compliance with the instruction, which referred to the Government Decree dated January 6, 2015, on early government investment project inspection to ensure transparency of implementation.
Under this instruction, all procurement and hire contracts, as well as payment claims for project instalments, will be valid only if they are certified with a signature from the planning and investment sector. Inspection of work done so far has to be carried out in order to claim project instalments. Inspections will be done once or multiple times based on the contract.
Inspections of the use or testing of the use should take place before the handover of fully completed projects. This is in line with Article No. 71 of the Law on State Investment and other regulations.
A committee must be set up to make decisions on every modification, postponement, change of purpose, or cancellation of any government project.
Ministries and government agencies, as well as provincial authorities, that have received any state budget, have to report on the use of all money received. For completed projects, a report must explain how the money has been used and benefited the sector concerned, as well as local authorities and the public.
The government plans to spend around 3.3 trillion kip to fund development efforts next year. Of this, 70 billion kip will be allocated to various sectors and local authorities to provide joint funding with foreign assistance.
However, the government has issued a prohibition on the payment of money and on project developers using planned funds for other purposes when the original project cannot be carried out.
The developer must submit a proposal to the Ministry of Planning and Investment before using allocated funding for other purposes.
The government has also allocated about 1.6 trillion kip to fund projects that have been implemented but have yet to be completed.
Provincial People’s Assemblies are responsible for monitoring local investment projects, while Vientiane authorities are responsible for investment projects by sectors that are implemented in the provinces and Vientiane.
The instruction also prohibits the government from carrying out any unapproved investment projects, or projects in which private companies have invested initially and agreed with the government for reimbursement after completion.
The implementation of such projects in recent years has resulted in an increase in chronic public debt.
Source: Vientiane Times