Removing obstacles for loss-making and revenue-reducing BOT projects.

Following the opinions of the National Assembly Standing Committee and the directives of the Prime Minister and Deputy Prime Minister, the Ministry of Transport has coordinated with localities to conduct a comprehensive review and assessment of the difficulties and obstacles of BOT transport projects nationwide and develop appropriate solutions.

The Ministry of Transport has submitted to the Standing Committee of the Government a plan to address difficulties and obstacles in BOT transport projects.

Recently, the Ministry submitted a document to the Prime Minister proposing additional regulations in the amended Law on Investment under the Public-Private Partnership (PPP) method to address difficulties and obstacles for BOT projects. The Ministry also submitted to the Standing Committee of the Government a plan to resolve difficulties and obstacles in BOT transportation projects.

Eleven BOT projects need to be addressed.

Recently, the Provincial People's Committee Lang Son The Ministry of Transport has submitted a request to the Prime Minister for support from the central government budget to ensure the financial plan and resolve difficulties and obstacles at the Bac Giang-Lang Son BOT project. The project was put into operation, with toll collection for the upgraded section of National Highway 1 starting on June 1, 2018; the expressway section opened in September 2019, with toll collection beginning on February 18, 2020.

According to the initial financial plan, the project was to collect tolls to recover investment costs at two toll stations on National Highway 1 and other stations on the expressway, with projected revenue of 93 billion VND per month. This is a rather unique project, implemented under the PPP model but without any state capital participation, stalled for over 5 years, and toll revenue only reaching about 32% of the initial financial plan.

According to the People's Committee of Lang Son province, the reason for the project's low revenue is due to the reduction of one toll station compared to the initial plan of two stations without any alternative support method, leading to a decrease in revenue throughout the toll collection period; the failure to increase toll fees on the expressway and National Highway 1 according to the approved financial plan; and the application of exemptions and reductions for more than 4,200 vehicles around the toll stations, causing a decrease in the project's revenue.

This project is one of 11 BOT projects that have encountered numerous difficulties and obstacles, requiring appropriate solutions.

Accordingly, to address the difficulties and obstacles in BOT transportation projects, the Ministry proposed two solutions: supplementing state capital support (during the exploitation phase) to enable the parties to continue implementing the contract; terminating the contract and allocating state capital to pay the investor; and requiring the investor and the bank providing credit to share the reduced profit and interest rates to ensure a balance of interests.

Subsequently, the Standing Committee of the Government convened and issued a conclusion in Notice No. 270/TB-VPCP dated June 22, 2024, which directed that, in cases where it is absolutely necessary to submit a resolution to the National Assembly, completed projects that are not allowed to collect fees should be reviewed, and a specific list of projects with quantifiable difficulties and obstacles should be identified. In the long term, the Ministry of Planning and Investment is tasked with leading and coordinating with the Ministry of Transport in the process of amending the PPP Law to research and develop appropriate solutions to address PPP projects that potentially face difficulties and obstacles.

Following the conclusions of the Standing Committee of the Government, the Ministry of Transport has coordinated with localities to review and compile a list of projects to finalize the Plan. According to the compiled results to date, out of a total of 140 projects... BOT transportation Across the country (66 projects under the authority of the Ministry of Transport, 74 projects under the authority of local authorities), 11 projects have had their difficulties and obstacles specifically identified and addressed.

The Ca Pass road tunnel is one of 11 BOT projects facing difficulties and obstacles.

In addition, there are several projects with potential revenue declines (mainly due to investment in parallel and cross-river highways) that cannot yet be quantified, such as the BOT National Highway 26 project, which risks revenue decline due to investment in the Khanh Hoa-Buon Ma Thuot expressway; the project to upgrade and expand National Highway 14 section from Bridge 38 to Dong Xoai town (Binh Phuoc) and the project to expand National Highway 14 section from Km817 to Km887 (Dak Nong), which also risk revenue decline due to investment in the Gia Nghia-Chon Thanh expressway…

Research on state capital support for BOT projects.

According to the draft revised PPP Law, submitted by the Government to the National Assembly at the 8th session, additional regulations have been added, providing sufficient grounds for terminating contracts for BOT transportation projects. However, the solution of using state capital to support the continued implementation of the contract during the operational phase is not yet clearly regulated.

Therefore, during discussions in committees and in the plenary session, some National Assembly deputies proposed studying and supplementing regulations on the use of state capital to support the exploitation phase in order to resolve difficulties and obstacles for some BOT projects that signed contracts before the PPP Law was promulgated.

Based on the opinions of National Assembly deputies, the Economic Committee is currently coordinating with the Legal Committee, the Ministry of Planning and Investment, and the Ministry of Transport to study options for incorporating these suggestions. These options include proposing additions to the transitional provisions of the amended PPP Law, and assigning the Government the authority to regulate the conditions and criteria for applicable BOT transport projects.

Specifically, the transitional provision adds: "For infrastructure investment projects under the BOT contract form signed before 2021, using state capital to terminate the contract prematurely or using state capital to support the project during the operation phase to continue implementing the contract, the Government shall specify the conditions and criteria for applicable BOT projects."

Some National Assembly deputies proposed studying and supplementing regulations on the use of state capital to support the exploitation phase in order to resolve difficulties and obstacles for some BOT projects that signed contracts before the PPP Law was promulgated.

Representatives from the Ministry of Transport expressed that if the National Assembly approves the above-mentioned supplementary regulations, there will be sufficient legal basis to address difficulties and obstacles facing BOT transport projects, eliminating the need to continue implementing the scheme. According to the Ministry of Transport's leadership, this is the view at the time the National Assembly is considering the matter. PPP Law The amendments and supplementary provisions in the transitional clause of the draft revised PPP Law to address difficulties and obstacles in BOT projects are appropriate, as they only address specific project groups (BOT transportation projects with contracts signed before the PPP Law came into effect).

The Ministry of Transport will closely coordinate with the Ministry of Planning and Investment to advise the Government on developing conditions and criteria for BOT projects, and the responsibilities shared by the parties involved (investors, banks providing credit) to ensure a balance of interests, prevent exploitation and abuse of policies, and avoid losses and waste.

Based on that, the Ministry recommends that the Prime Minister direct the Ministry of Planning and Investment to finalize the report incorporating the opinions of National Assembly deputies and the Ministry's opinions, and to add the aforementioned provisions to the transitional provisions of the amended PPP Law.

List of 11 BOT projects facing difficulties and obstacles requiring resolution.

Eight projects under the authority of the Ministry of Transport.

- BOT project for National Highway 1 bypass around Thanh Hoa city (including the eastern and western bypass sections from Km0 to Km6)

- The project involves the construction of the Thai Nguyen - Cho Moi (Bac Kan) road and the renovation and upgrading of National Highway 3, section Km75 - Km100, under a BOT (Build-Operate-Transfer) contract.

- Project to upgrade and expand Ho Chi Minh Highway section Km1738+148 - Km1763+610, Dak Lak province

- Project to renovate and upgrade National Highway 91, section Km14 - Km50+889

- Project to renovate and upgrade the Saigon River waterway section from Binh Loi Bridge to Ben Suc Port

- Viet Tri - Ba Vi Bridge Construction Project

- Thai Ha Bridge Construction Project

- The project to build a road tunnel through Ca Pass.

3 projects are under the jurisdiction of local authorities.

- The Bac Giang - Lang Son expressway project is implemented under the BOT (Build-Operate-Transfer) model (Lang Son Provincial People's Committee)

- An Hai Bridge Construction Project (Phu Yen Provincial People's Committee)

- Project for the renovation and upgrading of National Highway 39B and the bypass section around Thanh Ne town (Thai Binh Provincial People's Committee)

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