Transport firms protest higher road toll as Covid-19 relief

By Doan Loan   May 16, 2020 | 11:29 am GMT+7
Transport firms protest higher road toll as Covid-19 relief
Cars pass through a toll booth on Cau Gie- Ninh Binh Expressway connecting Hanoi with the northern province of Ninh Binh. Photo by VnExpress/Anh Duy.
Transport companies say a proposed toll increase as relief for BOT projects will exacerbate their own Covid-19 related woes.

They point out that the pandemic has already slashed travel demand and revenues, and an increase in operational costs will worsen the situation.

The Transport Ministry recently proposed a plan to support toll booth operators of build-operate-transfer (BOT) projects that have seen revenues fall because of the pandemic.

As an alternative, the ministry proposed subsidies worth VND5.08 trillion ($218 million) from the state’s coffers.

But transport firms are opposed to an increase in toll at this point. Nguyen Van Quyen, chairman of the Vietnam Automobile Transportation Association (VATA), said that tolls account for 10-12 percent of transportation costs, second only to fuel.

An increase in toll fees will create more difficulties for businesses, he said, adding that many businesses have been proposing a reduction in toll even before the ministry proposed an increase.

Quyen suggested that the ministry lets toll booth operators collect for a longer period instead of raising them.

"An increase in tolls should come when the economy and transport activities have returned to normal."

Do Van Bang, CEO of Hanoi-based bus company Sao Viet Transport, said that in recent months, the number of customers have dropped 50-70 percent from pre-pandemic times.

The average cost of a trip is VND7 million ($300), including fuel, tolls and parking fees, while revenue from recent trips is around VND2-3 million ($86-128) each, meaning the company is suffering losses.

"An increase in tolls at this time is inappropriate," he said.

Economist Ngo Tri Long said neither of ministry’s proposed plans would work. An increase in tolls would hurt transport firms, while state budget limitations will not allow the provision of VND5.08 trillion ($218 million) in subsidies.

Instead, the government should support toll booth collectors by lowering interest rates on loans and deferring debt payment, he said.

As of April 22, 58 out of 60 build-operate-transfer projects have failed to meet their revenue forecasts, with 17 making less than half the target, the ministry said.

A 3-6 percent toll increase has been scheduled for every three years, meaning an increase of VND2,000 (8.6 U.S. cents) per vehicle. This increase will not be much for personal vehicles, but transport companies will feel the brunt.

"There are BOT projects whose tolls have not increased in years, and if this persists it can result in bad debt," said an official of the ministry’s Public-Private Partnership Agency, who asked not to be identified.

He added that BOT project investors need 15-20 years to collect enough toll to recoup their investments and banks will not allow delays in repaying their loans.

 
 
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