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Wednesday, July 24, 2024

Over VND10.3 trillion proposed for handling eight loss-making BOT projects

By Thai Huy

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HCMC – The Ministry of Transport (MOT) has proposed the Government spend over VND10.3 trillion buying five projects under the build-operate-transfer (BOT) format and a part of three other BOT projects.

If the proposal is passed, the Government would take over the Binh Loi railway bridge and Saigon River dredging project for VND571 billion; the beltway project in the west of Thanh Hoa City for VND892 billion; the Highway 91B upgrade and improvement project in Can Tho City for VND1,754 billion; the Thai Nguyen-Cho Moi road construction and National Highway 3 upgrade project for VND2,850 billion; and the Ho Chi Minh Highway upgrade and expansion project in Daklak Province for VND745 billion.

Thai Ha Bridge would get VND717 billion, Viet Tri-Ba Vi bridge VND533 billion, and and Deo Ca road and tunnel VND2,280 billion. The payback period could be extended but their investors should commit to reduce the profit margin by half.

The eight projects have been put into service but have failed to collect tolls due to insecurity, disorder, a broken financial plan, or actual revenue reaching only 30% of the contract.

“Without the Government’s intervention, the projects may incur bigger debt and affect the country’s monetary policy and discourage private sector investment in traffic infrastructure projects,” the ministry said.

The ministry has spoken to investors about a plan to amend the contracts to either eliminate toll stations or extend the toll collection period plus the lowering of the profit margin.

After negotiations, the ministry said three projects could continue while the others need the Government to buy them to terminate the contract.

In mid-2022, the ministry proposed using State budget funds or other legal sources worth VND13.1 trillion to handle the projects.

The National Assembly Standing Committee told the Government to review the proposal and determine the causes of the problems.

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