More "signs" for handling revenue reduction in the Bac Giang - Lang Son BOT expressway project.

The investment project to build the Bac Giang - Lang Son City expressway section from Km45+100 to Km108+500 is one of the projects that applies Decree No. 122/2026/ND-CP detailing the handling of obstacles in BOT transport projects.

A section of the Bac Giang - Lang Son expressway.

The Ministry of Finance has sent a letter to the People's Committee of Lang Son province regarding the allocation of central government budget funds to address revenue reduction issues in the investment project to build the Bac Giang - Lang Son City expressway section from Km45+100 to Km108+500, combined with upgrading the surface of National Highway 1 section from Km1+800 to Km106+500 in Bac Giang and Lang Son provinces under the BOT contract form.

Detailed instructions

According to the Ministry of Finance, on April 3, 2026, the Government issued Decree No. 122/2026/ND-CP detailing the handling of obstacles in BOT transport projects (effective from April 3, 2026).

Decree No. 122 provides detailed regulations on determining projects with unsecured financial plans as stipulated in point a, clause 2, Article 99a of the PPP Law; the content of negotiations and agreements between the contracting authority, the investor, the project enterprise, and the lender as stipulated in point c, clause 2, Article 99a of the PPP Law; the revenue reduction sharing ratio; the responsibilities of the investor, the project enterprise, and the lender; and the procedures for sharing revenue reductions with the investor and the PPP project enterprise.

In order to provide a basis for submitting to competent authorities for consideration the allocation of state capital to pay for the revenue reduction of the Project, the Ministry of Finance requests the People's Committee of Lang Son province to review and supplement the explanation, clarifying the legal and practical basis of the proposal to apply the revenue reduction sharing mechanism, ensuring compliance with the provisions of Clause 2, Article 99a of the PPP Law and Decree No. 122/2026/ND-CP.

At the same time, the Ministry of Finance requested localities to direct investors and project enterprises to review actual revenue compared to the financial plan in the BOT contract, determine the percentage and amount of state capital participation in sharing the revenue reduction; calculate the adjustment of return on equity, interest rate on borrowed capital, debt repayment plan, and thereby complete the dossier to request the State to implement the revenue-sharing mechanism as prescribed.

If the parties agree on a solution, the People's Committee of Lang Son province needs to request the State Audit Office to audit the revenue reduction and the amount of state capital participating in the sharing. Based on the audit results, the locality will decide on the application of the sharing mechanism, determine the percentage and amount of state capital participation, the responsibilities of the relevant parties, and simultaneously develop a plan for funding to make payments, reporting to the competent authority according to the priority order stipulated in the PPP Law.

The project passes through Lang Son and Bac Giang provinces, with the Lang Son Provincial People's Council deciding on the investment policy and the Provincial People's Committee approving the project. Therefore, the Ministry of Finance requests the Lang Son Provincial People's Committee to coordinate with the Bac Giang Provincial People's Committee to agree on the responsibilities of the localities in paying for the revenue reduction, prioritizing the use of local budgets in accordance with the current regulations on the allocation of state capital.

The Ministry of Finance stated that it will coordinate with the People's Committee of Lang Son province in the process of reporting to competent authorities to consider state capital for implementing a revenue-sharing mechanism for the Project in accordance with the law.

The investment project to construct the Bac Giang - Lang Son City expressway (section Km45+100 - Km108+500), combined with upgrading the surface of National Highway 1 (section Km1+800 - Km106+500) in Bac Giang province (now Bac Ninh province) and Lang Son province, was implemented under a BOT contract.

Many major obstacles

According to the People's Committee of Lang Son province, the investment project to build the Bac Giang - Lang Son City expressway section from Km45+100 to Km108+500, combined with upgrading the surface of National Highway 1 section from Km1+800 to Km106+500, has a total expressway length of approximately 63.86 km. The starting point is at Km45+100 (intersecting with National Highway 1 in Mai Sao commune, Chi Lang district, Lang Son province) and the end point is at Km108+500 (Bac Giang City), connecting with the National Highway 1 upgrade and expansion project from Hanoi to Bac Giang.

The section of National Highway 1 included in the Project is approximately 110.2 km long, from Km1+800 (Huu Nghi border gate area, Lang Son province) to Km112+038.84 (Tan Dinh commune, Lang Giang district, Bac Giang province).

In this project, the People's Committee of Lang Son province is the competent authority, and the Lang Son Provincial Investment and Construction Project Management Board is the representative unit signing the contract. The project investor is a consortium comprising Deo Ca Infrastructure Investment Joint Stock Company, Lizen Joint Stock Company, Hoa Hiep Limited Company, and My Da Construction Limited Company; the project enterprise is Bac Giang - Lang Son BOT Joint Stock Company.

The project aims to establish the Bac Giang - Lang Son City expressway, contributing to the completion of the national expressway network, meeting the increasing transportation needs, improving operating conditions, reducing traffic congestion and accidents on National Highway 1 section between Bac Giang and Lang Son, while serving socio-economic development, ensuring regional security and defense, and aligning with the transportation development plan.

The total investment capital for the project is approximately VND 12,188.664 billion, of which equity capital is VND 1,645.470 billion (accounting for 13.5%) and borrowed capital is VND 10,543.194 billion (accounting for 86.5%). The project is implemented under a build-operate-transfer (BOT) contract.

Regarding the project's progress, construction began on March 2, 2016, and the entire route was completed and put into operation by the end of 2019. Specifically, the National Highway 1 component was completed on November 12, 2017, and toll collection began on June 1, 2018; the expressway component was completed on December 31, 2019, and toll collection officially began on February 18, 2020. The project is expected to be handed over in September 2048.

According to the financial plan, the interest rate on borrowed capital during the construction and operation period is 10.5% per year, and the investor's profit is approximately 11.5% per year. Revenue for capital recovery will be collected from toll stations on National Highway 1 (Km93+160) and on the expressway, using a closed toll collection system for the expressway and an open toll collection system for National Highway 1, with a toll increase schedule of approximately 15% every 3 years. The projected toll collection period for capital recovery is approximately 28 years and 7 months, extending until 2048.

The project was completed and put into operation in 2020. However, during operation, many difficulties, obstacles, and fluctuations arose, leading to a decrease in revenue and affecting the financial plan compared to the approved plan and the signed contract.

Specifically, some contributing factors include: the removal of one toll station; fee exemptions and reductions for certain groups; expansion of the project's scale; traffic diversion ratios between the expressway and National Highway 1 not matching forecasts; and the impact of the COVID-19 pandemic, which reduced traffic volume.

According to the initial financial plan, the project's revenue was projected to reach approximately 123 billion VND per month, but currently it only reaches about 52 billion VND per month (equivalent to about 42%), leading to a cash flow shortage and inability to guarantee repayment of principal and interest.

We need significant support from the central government.

In early April 2026, the People's Committee of Lang Son province submitted Proposal No. 64/TTr-UBND requesting the Ministry of Finance and the Ministry of Construction to report to the competent authority on the allocation of Central Government budget funds for the period 2026-2030 (outside the Central Government budget public investment plan allocated to the province according to the principles, criteria, and norms of Resolution No. 70/2025/UBTVQH15 dated February 7, 2025, of the Standing Committee of the National Assembly stipulating the principles, criteria, and norms for the allocation of public investment capital from the State budget for the period 2026-2030): 4,580 billion VND.

According to Mr. Dinh Huu Hoc, Vice Chairman of the People's Committee of Lang Son province, the investment development plan for Lang Son province in the 2026-2030 period, as reported to central ministries and agencies, amounts to approximately 50,221.463 billion VND. Of this, the proposed capital from the medium-term public investment plan of the State budget for the 2026-2030 period is 41,626.742 billion VND, not including the list of projects facing revenue reduction issues.

"The capital allocated to address the revenue reduction issues of the Project (4,580 billion VND) is very large compared to the budget balance capacity from local budget sources and the Central Government's budget allocated to the province according to criteria and norms. Therefore, the province is unable to allocate resources to address the revenue reduction issues of the Project," shared a leader of the Lang Son Provincial People's Committee.

Previously, the People's Committee of Lang Son province had also requested the Ministry of Finance and the Ministry of Transport (now the Ministry of Construction) to consider reporting to the competent authorities to provide central government budget support for the Project with an amount of approximately 4,600 billion VND as requested by the project enterprise to compensate for the cash flow deficit during the toll collection period for capital recovery, ensuring the financial plan (at that time, the capital recovery period of the Project was about 28 years and 7 months).

The People's Committee of Lang Son province also requested the Ministry of Transport (now the Ministry of Construction) to report to the Government, the Prime Minister, and central ministries and agencies to issue mechanisms and policies to implement debt restructuring and maintain the same debt classification for the Project.

Previously, in late March 2024, in an effort to "rescue" the Bac Giang - Lang Son BOT expressway project, the People's Committee of Lang Son province submitted Proposal No. 23/TTr-UBND requesting the Prime Minister to consider and approve the policy of providing support from the Central Government budget of approximately 5,600 billion VND (not exceeding 50% of the audited and finalized value of the Project) to compensate for the cash flow deficit during the toll collection period, ensuring the financial plan and stable operation and exploitation of the project.

Thus, compared to the March 2024 plan, the amount of state budget support for the project has decreased by approximately 1,000 billion VND. However, this is not the only difference in the proposed solution for the Bac Giang - Lang Son BOT expressway project mentioned by the Lang Son Provincial People's Committee in Report No. 402.

Reportedly, to reduce the state support by approximately 1 trillion VND, the People's Committee of Lang Son province, the project enterprise, the Vietnam Commercial and Industrial Bank (Vietinbank), and related agencies have implemented many measures to share the difficulties with the investor, such as approving adjustments to the financial plan twice.

Specifically, revenue will be adjusted based on actual figures; the maximum ticket discount will be reduced from 60% to 40% for vehicles in groups 2, 3, 4, and 5; investor profit will be reduced from 11.5%/year to 9.34%/year; and the loan interest rate will be reduced from 10.5%/year to 8.53%/year (applicable from the time the Project receives support from the State budget).

“This project is implemented under Government Decree No. 15/2015/ND-CP dated February 14, 2015, on investment in the form of PPP, with 100% of the capital mobilized by the investor, without any participation from the State budget, and without a revenue-sharing mechanism. Therefore, simply extending the toll collection period without support or sharing from the State will make it difficult to thoroughly resolve the project's problems,” the leader of the Lang Son Provincial People's Committee assessed.

Source: https://baodautu.vn/them-bien-bao-xu-ly-giam-doanh-thu-du-an-bot-cao-toc-bac-giang---lang-son-d585353.html