The Ministry of Transport submits a plan to the government on BOT tollfee increases in an attempt to support road project investors (Photo: VietnamPlus) Hanoi (VNA) – Whether fees at BOT (Build – Operate – Transfer) toll stations remain the same or increase is of great concern during the COVID-19 pandemic.
As the Ministry of Transport (MoT) suggested BOT toll fee increases to “rescue” road project investors, representatives of transport businesses affirmed that it is not a suitable time, pushing for fees to remain the same during the COVID-19 period.
Investors expressed their view that, if the fees remain low in addition to paying interest rates, they will be “beaten out”, resulting in distress for the banking sector.
Should the fees at BOT toll booths be increased or maintained?
Chairman of the Dat Cang Transport, Trade and Services Joint Stock Company Khuc Huu Thanh Hai said that, while the frequency of transport activity and passenger number declined considerably, impacting many cargo transport firms, BOT toll and road maintenance fees have become a burden on transport businesses, especially amid the COVID-19.
“Although taxes and bank interest rates remain the same, businesses have to pay high costs at BOT toll booths. If the fees are to rise just for the sake of investors, then the operation of most firms will be affected,” Hai explained.
He added that the BOT toll fees account for a lion’s share of 40 percent in transportation costs.
“The Government should not raise the fees given that now is not a suitable time. In order to ‘rescue’ investors, a roadmap is indeed necessary yet it should be carried out at an appropriate time when cargo transport returns to normal and the economy recovers,” he said.
Do Van Bang, Director of Minh Thanh Phat company, an affiliate of Sao Viet Transport Company, said that transport businesses and the Vietnam Automobile Transportation Association (VATA) had asked the MoT and the Government to consider exempting road maintenance and BOT toll fees to help transport firms surmount challenges brought by COVID-19.
“Most firms are half-dead as they have yet to receive any support in services fee and tax reduction, therefore the proposal to increase BOT toll fees nationwide is no different from a finishing blow for them,” Bang said.
He went on to say that increase of fees at BOT booths is in line with the roadmap, but as all firms receive a blow by the pandemic, the proposal is unreasonable.
VATA President Nguyen Van Quyen said that relevant agencies should consider lengthening fee collection time for BOT investors while maintaining fees for already-high-cost projects.
BOT investors and the banking sector may collapse
Quyen added that the MoT should choose a more appropriate time for the plan when the economy mostly returns to normal and transport activities are stable.
Numerous BOT projects see lower revenues compared to financial plans, while toll fee increases stated in the contract are not allowed, causing difficulties for investors (Photo: VietnamPlus) Director of BOT National Road No.6 Hoa Lac-Hoa Binh Company Bui Quang Bat said that the Hoa Lac-Hoa Binh project earned in excess of 11 billion VND (473,570 USD) per month from last December to January. The figure was down 30 percent in March and April to 8 billion VND.
He said that, in accordance with a roadmap on fee increase cited in the contract, firms were previously able to raise the fees by 18 percent, from the current 350,000 VND per vehicle for one leg at the beginning of the year. This will now not be permitted.
His company asked the bank to reduce its interest rate as a loan approved by the Saigon-Hanoi Joint Stock Commercial Bank (SHB) yields an interest rate of 12.8 percent, while the BOT contract stated 11 percent at maximum.
BOT firms also face difficulties as they have to reduce fees three years ago per order of the State, Bat said.
It will be insufficient for BOT firms even if the increase is approved, he noted, adding that nonetheless, they are unable to do so./.
