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Tuesday, July 23, 2024

Transport Ministry proposes fee hike for BOT road projects

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HCMC – The Ministry of Transport has written to the Government proposing increasing the toll fees for some build-operate-transfer (BOT) road projects to support the investors in these projects who have been affected by Covid-19, reporting a sharp drop in revenues.

The ministry presented two solutions for fee collection. The first solution is to raise toll fees based on the BOT contracts and assign the Ministry of Transport to choose a suitable time for the hike to avoid objections by road users and minimize costs.

The second solution, which the ministry proposed, is to keep the current fees unchanged and raise toll fees in 2022, in line with a roadmap previously signed in the contracts. Meanwhile, the State will have to spend some VND5.08 trillion to compensate the owners of projects which will not be subject to fee hikes.

The ministry also proposed the Government consider and approve the first solution as it is more practical, and under this solution, the Government will not need to use the State budget to rescue the BOT projects.

Since early 2020, the country has seen revenues drop for up to 58 out of 60 BOT road projects, with the revenues of 17 projects failing to meet as low as 50% of their targets, the local media reported.

The revenue drop was attributed to toll fee reduction and exemption policies for vehicles owners living near BOT tollgates. Besides this, a fee hike has yet to be implemented in line with the roadmap in the BOT contracts, which has made it difficult for the investors in BOT road projects to pay their bank loans.

Apart from this, the social distancing order, part of efforts to fight the spread of the coronavirus, reduced the number of vehicles passing through BOT tollgates, resulting in a drop in revenue.

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