BOT project investors complain they are incurring big losses

A series of BOT project investors have complained that they are incurring big losses because of the modest fee collected. 

According to the investors, there are two basic solutions to the problem, either the State creates favorable conditions for them to collect fees on BOT roads by prohibiting vehicles from going on other roads; or the State takes over the projects.

However, the solutions are not sufficient.

The investor suspended fee collection at Cai Lay BOT Station for several months as per MOT’s request after vehicle owners showed violent protests against the fee collection.

In this case, MOT has put forward five solutions to solve the problem, but the involved parties still have not reached any agreement.

A local newspaper quoted an MOT official as saying ‘BOT Cai Lay’s problem still cannot be defused’.

Meanwhile, Dinh Trong Thinh from the Finance Academy said the state should not take over BOT projects, saying this should be used as a last resort.

The state acquisition of BOTs that have problems will have negative consequences for other BOT projects.

BOT is believed to be a good investment mode for infrastructure in the context of the state’s tight budget. If the State buys the projects, the BOT mode will have no significance and the State will still have to spend big amounts of money.

Thinh commented that once the State takes over BOT projects from private investors, it would mean acknowledgement about the failure of BOT mode in Vietnam. 

Other countries have been using the mode very effectively to develop transport infrastructure.

He went on to say that the State will have to deal with technical issues when buying the projects, adding that it would be a complicated work to assess the value and audit the projects.

Commenting about project developers complaining about losses and shouting for help, an analyst said it is illogical that the State has to take responsibility for investors’ losses.

“They (the investors) will pocket money if they make a profit and they must accept losses if they cannot do better,” he commented.

The loss incurred by BOT investors has also worried commercial banks. In general, investors only have 15 percent of capital for project development, while the remaining 85 percent is from loans. As investors incur losses, they will not be able to pay bank debts.

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Thanh Lich