Proposed special policy for North-South high-speed railway: 0% interest rate loan

The Ministry of Construction has completed the Draft Resolution on a number of specific mechanisms and policies applicable to the North-South high-speed railway project. The draft document has been sent to the Ministry of Justice for appraisal.

Get a loan with 0% interest rate for 30 years

Notably, the Ministry of Construction proposed a series of mechanisms related to financial policies, tax incentives, and specific regulations for the public-private partnership method.

Specifically, regarding financial support in the case of investment in the form of business investment, the State lends a maximum of no more than 80% of the total approved project investment (excluding contingency costs), with a minimum interest rate of 0%, and a maximum loan term of 30 years from the date of disbursement of the first loan.

The investor must repay the entire loan within 30 years from the date of first disbursement.

Proposing many financial support mechanisms for investors when building the North-South high-speed railway. Photo: TL

In case of investment under the public-private partnership method, the State capital participation ratio shall not exceed 80% of the total approved project investment.

Domestic commercial banks are exempted from the regulations on total outstanding credit balance for loans to investors. This loan is also not included in the total outstanding credit balance of the bank to investors as prescribed.

Investors are exempted from import tax on machinery, equipment, railway transport vehicles to create fixed assets and imported goods, components, materials, spare parts serving investment in construction, renovation, upgrading, maintenance, exploitation of railway infrastructure and other materials and equipment directly serving the project. The condition is that these items cannot be produced domestically, or can be produced but do not meet the technical standards of the project.

The draft also specifies specific regulations for the public-private partnership method. Accordingly, in the first 3 years after the time of operation and business, it is allowed to apply a 100% sharing of the difference between actual revenue and revenue in the financial plan when actual revenue is lower.

The Government shall prioritize allocation from the annual revenue increase, the remaining expenditure estimate of the Central budget, or capital from the annual investment plan to cover the difference in revenue reduction. The sharing of the revenue reduction in the remaining years after the first 3 years shall be implemented in accordance with the law on investment under the public-private partnership method.

The payback period for the project is not more than 70 years.

Investors whose operations are suspended or terminated are not entitled to compensation.

Regarding the capital arrangement and disbursement plan, according to the draft, immediately after being granted the investment registration certificate, the investor is responsible for developing a project implementation schedule, capital mobilization and disbursement plan; and submitting it to the investment registration authority for review and approval before starting construction.

In addition, the investor is responsible for disbursing the capital at the rate of capital mobilized by the investor according to the provisions of the investment registration certificate, but ensuring that the disbursement periods are not lower than 20% of the disbursement period until the investor's capital contribution is exhausted.

In case the investor fails to meet the capital mobilization schedule as committed, or uses the State loan for the wrong purpose, or fails to promptly remedy the situation as required, the agency issuing the investment registration certificate has the right to unilaterally revoke it; at the same time, the investor must compensate for all damages, losses, and expenses.

Investors shall have their investment and business activities suspended or terminated and shall not be compensated in case of causing harm or risk of causing harm to national defense and security, exploitation without ensuring quality leading to serious incidents, or failure to carry out guarantees as prescribed.

Investors must have a project performance guarantee for the State budget loan. In case after the project construction is completed, the security asset is the asset formed from the project. Investors are not allowed to pledge or mortgage the project assets to mobilize capital to implement other projects.

During the project implementation process, investors are not allowed to adjust the investment objectives and main scale of the project in terms of road gauge, design speed, and load.

Also according to the draft, in case the project is applied in the form of business investment or investment in the form of public-private partnership, the investor must prioritize the use of products, goods and services that can be produced and supplied domestically; require foreign partners to transfer technology, train human resources for Vietnamese partners to master management, operation, exploitation and maintenance; and gradually master the technology.

Vietnamnet.vn

Source: https://vietnamnet.vn/de-xuat-loat-co-che-chinh-sach-dac-thu-cho-duong-sat-toc-do-cao-bac-nam-2458699.html