Proposal to extend the progress of the non-stop toll collection project to 2020

The Ministry of Transport has proposed that the Government extend the progress of the non-stop toll collection project. Photo: Vietnam+

The Ministry of Transport has proposed that the Government extend the progress of the second phase of the automatic toll collection project and stations of the Vietnam Expressway Corporation (VEC) to 2020.

Specifically, the Ministry of Transport said that the automatic non-stop toll collection system at BOT toll stations, of which the Ministry of Transport is the competent State agency, is divided into two projects.

Phase 1 of the project has a total of 44 stations, including 26 stations on National Highway 1 and Ho Chi Minh Road through the Central Highlands and 18 stations on expressways and other national highways added to the project. To date, 25/26 stations on National Highway 1 and Ho Chi Minh Road through the Central Highlands and 13 stations on other national highways have been installed and operated.

"For the 5 expressways managed by VEC, only 1 expressway, Cau Gie-Ninh Binh, is installing equipment and is expected to be operational in 2019. The remaining four routes have not been implemented due to funding difficulties, so they cannot be completed in 2019 as directed by the Prime Minister. Toll stations in phase 1 of the project (except for 4 expressways managed by VEC) have been implemented on schedule as directed by the Prime Minister," said the Ministry of Transport.

Regarding the second phase of the project, the Ministry of Transport said that there are a total of 33 stations, including: 10 stations on National Highway 1 and Ho Chi Minh Road through the Central Highlands and 23 stations on expressways and other national highways. The project has selected a consortium of the Military Industry-Telecoms Group (Viettel), Vietinf Joint Stock Company and a number of other technology enterprises as investors to implement the project since May 2019.

"Currently, the investor has not completed the procedures for establishing a project enterprise as prescribed. The failure to establish a project enterprise affects the implementation progress because the investor does not have enough legal basis to carry out the next steps. With the current slow progress in establishing a project enterprise, the project is at risk of not being completed on schedule as directed by the Prime Minister," the Ministry of Transport informed.

Referring to the project's difficulties, the Ministry of Transport said that the implementation of projects managed by VEC has encountered many difficulties during the implementation process, leading to 4/5 expressways being implemented very slowly, making it difficult to complete the progress according to the Prime Minister's direction.

"The reason is that the capital to invest in the non-stop toll collection system (ETC) at toll stations due to the loan agreement for the projects has run out. Transferring VEC to the State Capital Management Committee at enterprises, while the decentralization and delegation of authority between the Ministry of Transport and the State Capital Management Committee at enterprises are not clear, also affects the progress of implementing the ETC system," the document of the Ministry of Transport clearly stated.

According to the Ministry of Transport, to date, the toll stations of the first phase of the project have basically been installed and operated, initially creating convenience for users. However, the biggest problem at present is that the revenue to recover capital for the ETC automatic toll collection project is not as expected due to the slow progress of signing service contracts and revenue collection.

In addition, the fact that many BOT projects have reduced revenue compared to the initial financial plan also affects the revenue of non-stop automatic toll collection projects.

The number of vehicles that have attached tags and paid into traffic accounts to participate in the non-stop automatic toll collection service is not high, with about 800,000 tags/3.5 million vehicles with tags using the ETC service. The reason is that the exemption of tagging has not been achieved as planned. The requirement that vehicles without tags are not allowed to go through the non-stop automatic toll collection lane, although it has been implemented, still needs a roadmap and sanctions to implement.

"Due to the above difficulties and problems, the project investor has proposed to stop the project implementation to transfer it to another investor or the State to take back the project to continue implementation. After reviewing the proposal of VETC Non-Stop Toll Collection Company Limited, the Ministry of Transport does not agree with the solution of stopping the project implementation or the State to take back the project but will continue to coordinate with VETC Non-Stop Toll Collection Company Limited and relevant agencies and units to gradually remove difficulties and problems to continue implementation to meet the progress according to the direction of the Prime Minister," the Ministry of Transport informed.

Regarding the phase 2 project, the Ministry of Transport said that during the bidding process to select an investor to implement the project, Viettel's legal status met the requirements of the bidding documents as well as legal regulations, and the Ministry of National Defense approved the policy to allow Viettel to participate in the bidding.

However, after winning the bid, in order for Viettel to be able to establish a project enterprise, it needs to be approved in principle by the Prime Minister. Although the selection of a non-stop toll collection service provider was completed by the Vietnam Road Administration in May 2019 (the investor is Viettel), up to this point (after 6 months), the investor has not completed the procedures for establishing a project enterprise according to regulations, leading to insufficient legal basis to carry out the next steps such as designing construction drawings, signing credit contracts, installing equipment, etc.

Along with that, the Ministry of Transport also recommended that the Prime Minister direct the State Capital Management Committee at enterprises to promptly find solutions to remove obstacles and difficulties in capital sources for investing in the non-stop automatic toll collection system at toll stations managed by VEC to speed up the implementation progress; direct the State Bank and commercial banks to find solutions to support, restructure loans and maintain the debt group according to the financial plan due to being affected by the price reduction policy, not yet increasing prices according to the signed contract roadmap and objective conditions, leading to a decrease in revenue at BOT projects, creating conditions to promote the signing of service contracts and implementation of non-stop automatic toll collection services...