Gov't lacks funds to buy back low-revenue BOT projects

By Anh Minh   August 15, 2019 | 05:38 pm PT
Gov't lacks funds to buy back low-revenue BOT projects
Bach Dang Bridge in Quang Ninh Province was invested under a BOT model. Photo by VnExpress/Minh Cuong.
BOT projects not yielding the expected revenue have put both the government and investors in more than a spot of bother.

While the government says it can’t afford to buy back these projects, investors say they badly need the money to repay debts.

A report recently submitted to the National Assembly said 39 build-operate-transfer (BOT) projects are seeing lower revenues because the government has lowered tolls; not increased tolls as contracted with investors; or lowered the number of toll booths.

The government made these moves after local citizens protested many times for several reasons, including the location of BOT toll booths in such a way that locals would have to pay just to travel around in their neighborhood.

The government needs to allocate the budget to buy back some of these projects to repay investors, but its limited resources make this a "very challenging" task, the report said.

Prime Minister Nguyen Xuan Phuc has tasked the Ministry of Transport with reviewing these BOT projects case by case to balance benefits between the state, investors and users.

The transport ministry had proposed in June that tolls are increased in 25 BOT projects by 12-18 percent because they were experiencing lower traffic than estimated in their contracts.

If tolls are not raised, investors might have to declare bankruptcy and trillions of dong (VND1 trillion = $43 million) borrowed from banks would turn into bad debt, the ministry said.

Vietnam has 59 BOT projects in operation and two under construction.

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