Proposal of over 10,000 billion VND to buy back 8 loss-making BOT projects

The Ministry of Transport has proposed that the Government allocate 10,340 billion VND to buy back 5 BOT projects and buy part of 3 projects that are facing difficulties and losses.

Last week, the Ministry of Transport proposed to the Government solutions to handle difficulties in 8 BOT transport infrastructure projects managed by the Ministry. This is the second time the Ministry has proposed this content.

8 BOT projects have been completed and put into operation but tolls have not been collected or cannot be collected due to lack of security and order, or financial plans have been disrupted. Some projects have collected tolls but actual revenue only reached 30% of the contract. Over the years, state agencies and investors have sought solutions but to no avail.

"Unhandled BOT projects will disrupt financial plans, create bad debts, affect monetary policy and attract private investment in transport infrastructure," said the Ministry of Transport.

The Ministry has negotiated with investors on the plan to amend the contract in the direction of: Eliminating toll stations or extending the collection period, investors reduce profits. After negotiations, the Ministry said there are 3 feasible projects to continue implementing the contract; the remaining 5 projects supplemented with state capital but still not feasible, so the state needs to buy back to terminate the contract.

BOT station on National Highway 3 in Thai Nguyen has not yet collected tolls even though the project was completed in 2017. Photo: Anh Duy — BOT station on National Highway 3 Thai Nguyen has not yet collected tolls even though the project was completed in 2017. Photo: *Anh Duy*

The 5 projects proposed for repurchase include: BOT Binh Loi railway bridge and Saigon river channel renovation with 571 billion VND; BOT western belt of Thanh Hoa city with 892 billion VND; BOT upgrading and renovating National Highway 91, Can Tho city with 1,754 billion VND; BOT Thai Nguyen - Cho Moi and renovation and upgrade of National Highway 3 estimated at 2,850 billion VND; BOT upgrading and expanding Ho Chi Minh road through Dak Lak with 745 billion VND. These projects will have toll stations removed after the state allocates budget for repurchase.

In addition, three projects are considered to continue the contract and extend the payback period, with the state supporting no more than 49% of the total investment capital of the project. These are the Thai Ha Bridge BOT project (Thai Binh, Ha Nam) proposed to allocate 717 billion VND of budget capital, the payback period is extended to 35 years, the investor commits to reduce the profit rate by 50%; the Viet Tri - Ba Vi Bridge BOT project is expected to add 533 billion VND, extending the payback period by 22 years; the Deo Ca Road Tunnel BOT project is expected to add 2,280 billion VND, extending the toll collection period by about 28 years.

With a capital source of about 10,340 billion VND to handle 8 projects, the Ministry of Transport proposed that the Government assign the Ministry of Planning and Investment to preside over and coordinate with the Ministry of Finance and the Ministry of Transport to balance appropriate capital sources and report to the Government for approval.

The Ministry also proposed that the Government direct the State Bank and banks to have appropriate solutions to share difficulties with investors such as debt forgiveness, maintaining the debt group, and reducing loan interest rates for credit loans.

In mid-2022, the Ministry of Transport submitted to the Government solutions to handle shortcomings in 8 BOT projects after reaching an agreement with investors. The estimated state capital needed to buy back these projects is 13,115 billion VND.

The handling of BOT project problems is beyond the authority of the Ministry of Transport because it must arrange state capital to replace the right to collect fees or to pay investors and terminate the contract before the deadline. Therefore, the Ministry must report to the competent authority for consideration and decision.

Afterwards, the National Assembly Standing Committee requested the Government to review and clearly identify whether the project's problems originated from state representatives, businesses, or the investor's responsibility.

Doan Loan

Source link