A pick-up passes through an electronic toll collection (ETC) plaza on Can Tho-Phung Hiep expressway (Photo: VNA) Hanoi (VNS/VNA) - TheMinistry of Transport has recently proposed the Government to consider andapprove the option of increasing BOT toll fees in order to remove difficultiesfor the investors who suffered revenue losses.
At present, a series of BOT(build-operation-transfer) projects is reporting considerably lowerrevenues compared to the original financial plans, as toll fee collectionhad plummeted due to the COVID-19 pandemic resulting in less traffic. Thetoll had not increased according to the schedulewhile investors still had to pay interest on bank loans, pushingthem into financial hardship.
Therefore, the Ministry of Transporthad sent the Government a proposal on supporting BOT infrastructure transportbusinesses to overcome the consequences of the COVID-19 pandemic.
According to the ministry’sreport, since earlier this year, the COVID-19 pandemic has had negative impactson all sectors of the country’s economy.
Among them, BOT enterprises hadbeen directly affected due to a sharp decrease in vehicle transport leading toreductions of revenues, especially during the social distancing period.
Revenue of 58 out of 60 BOTprojects were lower than the financial plans, especially 17 which had reachedless than 50 percent of the plan.
In the circumstances, the BOTbusinesses had made a proposal to the transport ministry toseek solutions to support and remove the difficulties, such asrescheduling bank loan payments, not classified BOT businesses into thebad debt group, extending VAT and corporate income tax paymentdeadlines in 2019 and 2020, and reducing and exempting loan interestarising during the pandemic.
The businesses also suggestedto allocate the State budget to offset the declining revenue when the BOTinvestors followed the Government and Prime Minister’s directions as well asask the Government to buy part or all of the projects where the toll collectionhad not yet been carried out due to lack of security and order.
In terms of toll rates, theministry proposed two options.
The first option is toincrease the road toll rates under project contracts. The ministry wouldconsider the appropriate time to carry out this measure, to minimiseimpacts on transport costs and instruct localities to arrange functional forcesto ensure security and order at toll plazas.
The second option is to keepthe current toll rates and increase the toll collection roadmap agreed inthe contracts from 2022.
The Government will allocateabout 5.080 trillion VND (217.8 million USD) as financial assistance to theprojects which were not allowed to increase fees under the BOT contracts.
The Ministry of Planning andInvestment would be assigned to calculate the budget.
The Ministry of Transport wouldnegotiate with investors and banks about loan granting.
Analysing the pros and cons ofthe alternatives, the Ministry of Transport proposed the Prime Minister toconsider and approve the first plan because it has more advantages and does notrequire sourcing from the State budget.
Additionally, the Ministry ofTransport also suggested the Prime Minister to ask the State Bank of Vietnamand commercial banks to introduce supporting measures such as rescheduling loanpayments and reducing bank loan interest arising during the pandemic.
The transport ministry askedthe Prime Minister's permission to provide financial aid to the projectswhich suffered 50 percent revenue losses or more.
In some special cases, theGovernment should buy out the projects and allow businesses to extend VAT andcorporate income tax payments of 2019 and 2020.
The transport ministry willcontinue cooperating with relevant ministries and local governments to reviewall BOT projects for setting up suitable measures which ensure publicity,transparency and harmony of interests of the State, people and investors aswell as in accordance with the signed projects' contracts and granted investmentregistration certificates./.
At present, a series of BOT(build-operation-transfer) projects is reporting considerably lowerrevenues compared to the original financial plans, as toll fee collectionhad plummeted due to the COVID-19 pandemic resulting in less traffic. Thetoll had not increased according to the schedulewhile investors still had to pay interest on bank loans, pushingthem into financial hardship.
Therefore, the Ministry of Transporthad sent the Government a proposal on supporting BOT infrastructure transportbusinesses to overcome the consequences of the COVID-19 pandemic.
According to the ministry’sreport, since earlier this year, the COVID-19 pandemic has had negative impactson all sectors of the country’s economy.
Among them, BOT enterprises hadbeen directly affected due to a sharp decrease in vehicle transport leading toreductions of revenues, especially during the social distancing period.
Revenue of 58 out of 60 BOTprojects were lower than the financial plans, especially 17 which had reachedless than 50 percent of the plan.
In the circumstances, the BOTbusinesses had made a proposal to the transport ministry toseek solutions to support and remove the difficulties, such asrescheduling bank loan payments, not classified BOT businesses into thebad debt group, extending VAT and corporate income tax paymentdeadlines in 2019 and 2020, and reducing and exempting loan interestarising during the pandemic.
The businesses also suggestedto allocate the State budget to offset the declining revenue when the BOTinvestors followed the Government and Prime Minister’s directions as well asask the Government to buy part or all of the projects where the toll collectionhad not yet been carried out due to lack of security and order.
In terms of toll rates, theministry proposed two options.
The first option is toincrease the road toll rates under project contracts. The ministry wouldconsider the appropriate time to carry out this measure, to minimiseimpacts on transport costs and instruct localities to arrange functional forcesto ensure security and order at toll plazas.
The second option is to keepthe current toll rates and increase the toll collection roadmap agreed inthe contracts from 2022.
The Government will allocateabout 5.080 trillion VND (217.8 million USD) as financial assistance to theprojects which were not allowed to increase fees under the BOT contracts.
The Ministry of Planning andInvestment would be assigned to calculate the budget.
The Ministry of Transport wouldnegotiate with investors and banks about loan granting.
Analysing the pros and cons ofthe alternatives, the Ministry of Transport proposed the Prime Minister toconsider and approve the first plan because it has more advantages and does notrequire sourcing from the State budget.
Additionally, the Ministry ofTransport also suggested the Prime Minister to ask the State Bank of Vietnamand commercial banks to introduce supporting measures such as rescheduling loanpayments and reducing bank loan interest arising during the pandemic.
The transport ministry askedthe Prime Minister's permission to provide financial aid to the projectswhich suffered 50 percent revenue losses or more.
In some special cases, theGovernment should buy out the projects and allow businesses to extend VAT andcorporate income tax payments of 2019 and 2020.
The transport ministry willcontinue cooperating with relevant ministries and local governments to reviewall BOT projects for setting up suitable measures which ensure publicity,transparency and harmony of interests of the State, people and investors aswell as in accordance with the signed projects' contracts and granted investmentregistration certificates./.
VNA
