HCMC – The Vietnam Association of Road Systems Investors (VARSI) has explained the various problems in the execution of public-private partnership (PPP) projects to the prime minister and sought solutions.
On September 8, VARSI held a seminar on obstacles facing the execution of PPP projects. The association coordinated with the Ministry of Planning and Investment to organize another seminar to comment on a decree ordering the deployment of the Law on Investment under the PPP format on October 19.
Through these seminars, enterprises shared their difficulties in the investment and operation of PPP projects.
VARSI, on behalf of these firms, reported to the prime minister that State management agencies asked the investors of projects to fulfill their commitments or risk facing sanctions. Meanwhile, many State management agencies have failed to meet their commitments, affecting projects and causing losses for investors and banks, but there have been no sanctions for them.
VARSI cited the Hanoi-Haiphong expressway project as an example, stating that the State had committed VND17 trillion, or 39% of the capital needed for the project. Until the end of last year, the project received only VND1.4 trillion from the State for the site clearance work.
For the Deo Ca Tunnel project, more than VND5 trillion was planned to be sourced from the State budget, but only VND3.9 trillion has been disbursed, affecting the capital use effectiveness and raising the interest of loans.
Although investors, the Ministry of Transport and banks have repeatedly reported these problems to the Government and the relevant ministries, their efforts have been in vain.
In addition, toll fees at build-operate-transfer projects have yet to be raised as planned.
These projects have been put into operation, proved investment effectiveness, boosted the trade connection and socioeconomic development of localities and reduced traffic congestion and accidents, so the investors have fulfilled their duties.
The State management agencies must bear responsibility for the delay in the toll fee increase and the lack of State capital for projects.
According to VARSI, Vietnam’s policies and regulations have been amended regularly, including those on taxes, fees and the management and use of public assets, posing a high risk during investment and negatively affecting the enhancement of long-term investments.
For example, the toll collection on the HCMC-Trung Luong Expressway has been suspended due to an amendment to policies on public asset management. The toll collection suspension will increase the risk of traffic accidents, cause losses for the State budget and threaten the financial viability of the project.
As for the Bo Dau tollgate for the La Son-Tuy Loan Expressway, the Government had earlier approved its operation and the Ministry of Transport had also signed an agreement with the investor on its operation. However, the Ministry of Transport recently proposed that the tollgate should not be allowed to operate without working with the investor and banks.
Moreover, the Public-Private Partnership Law, which will take effect next year, states that the State would share risks with the investors of new PPP projects and not of projects that have been completed and are under construction.
Therefore, VARSI suggested the prime minister direct the Ministry of Transport and other relevant agencies to address these problems to ensure fairness, safety and effectiveness during the execution and operation of PPP projects.