The National Assembly's Economics Committee has released a report on the implementation of Resolution 437 on some tasks and solutions on investment and exploitation of BOT transport works.

The committee says the Government has been strictly observing the principle of not developing projects on rehabilitating or upgrading certain routes under the BOT model, which is believed to be one of the major reasons behind big problems in BOT investment.

The Government reviewed the implementation of investment models under the Public Private Partnership (PPP) mode and submitted to the 9th plenum of the 14th NA (June 2020) a draft law on investment under the PPP mode for consideration and approval.

As such, the legal framework covering the investment under PPP mode, including BOT, has been synchronized.

However, according to the NA Economics Committee, while the Government has reviewed the implementation of PPP investment models, including BOT, it has not reported to the NA Standing Committee the results on reviewing the responsibilities of the individuals and institutions where violations were made.

To date, all the projects have been audited. However, the settlement of some projects is slow because of problems related to lending interest rates, site clearance, and norms of some items.

BOT projects all offer toll remission for people living near the projects. However, according to the Ministry of Transport’s report, difficulties still exist at eight BOT toll collection stations because of problems in locations and disagreement with residents.

Therefore, the ministry has proposed that agencies allocate state budget capital for the 2021-2025 medium-term public investment plan to give support or make payments for some BOT projects.

The NA Economics Committee disagrees with the idea, saying that it is unreasonable to use the state budget to support buy back of BOT projects.

BOT projects all offer toll remission for people living near the projects. However, according to the Ministry of Transport’s report, difficulties still exist at eight BOT toll collection stations because of problems in locations and disagreement with residents.

Since local people in BOT project areas oppose the toll collection, investors cannot recover capital, and no clear criteria exists to have sufficient legal and practical basis for buying back the projects.

Besides these problems of many years, there are also problems at toll collection stations at some projects. However, the people in the project areas stopped protesting against toll collections after the policy on toll remission was announced.

The Economics Committee pointed out that if the State buys back the projects, this may lead to less transparency and trigger a wave of complaints, which would affect security and order. Besides, this will put pressure on the state budget and be contrary to the Party and State’s policy on mobilizing all capital sources in society for infrastructure development.

Most BOT projects in difficulties

Regarding the supervision of revenue from toll collections, the Economics Committee said the General Directorate for Roads of Vietnam has built a system to manage, supervise and exploit data on toll collections, but the system is applied to only six out of 66 toll collection stations (there are 107 stations under the central and local management).

In terms of revenue from toll collections, some projects have seen satisfactory revenue growth rate, but most projects have revenue below the estimates. Investors are meeting difficulties paying debts, which means a risk of bad debt at banks.

In 2018, there were 53 BOT projects, of which 27 had revenue equal to 100 percent or higher than estimates.

Meanwhile, 26 projects had revenue lower than estimates (one project stopped collection, three projects temporarily stopped collection, three projects have just begun collecting tolls and there are not enough figures for assessment).

The Economics Committee has proposed that the NA Standing Committee ask the Government to report the results of the review of responsibilities of individuals and institutions where violations occurred, as per the request by Resolution 437. 

Luong Bang

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