Government Inspectorate points out a series of violations in BOT and BT projects

The Government Inspectorate has just officially announced the conclusion of the inspection of compliance with legal regulations in the implementation of a number of investment projects in the form of build-transfer (BT) and build-operate-transfer (BOT) contracts in the fields of transport and environment at the Ministry of Transport.

Combining the renovation and upgrading of 7 km of National Highway 3 with the investment in the construction of a new Thai Nguyen - Cho Moi road into one project, then placing 2 toll stations in 2 unreasonable locations for each project.

100% of BOT and BT projects are designated contractors

Specifically, according to the Government Inspectorate, during the implementation process, the Ministry of Transport has not fully implemented the process of building and announcing the list of projects calling for investment in the form of BT, BOT in January every year according to the Government's regulations. This leads to the necessary information on investment policies and projects not being fully and promptly announced to investors, limiting the number of potential investors participating.

In fact, since the implementation of investment in the form of BT and BOT contracts in the transport sector up to now, with more than 70 projects implemented, no investors have been selected through bidding, 100% are designated bidders, in which the selected investors do not have guaranteed capacity, leading to many shortcomings and errors, limiting the effectiveness of project implementation.

For example: 3/4 companies in the investor consortium implementing the Phuoc Tuong Road Tunnel and Phu Gia Tunnel Project did not contribute capital as committed and had to withdraw from the consortium and request to reduce the capital contribution ratio to the maximum. The consortium had to invite replacement contractors, leading to delays in project progress.

Corporation 36 is a company in the investor consortium implementing the Hoa Lac - Hoa Binh road project and renovating and upgrading National Highway 6, Xuan Mai - Hoa Binh section, committed to contributing more than 67.3 billion VND while the Corporation's equity capital is 285 billion VND but has invested 279 billion VND in the BOT National Highway 19 project...

Regarding investment content approval, the total investment level according to the Government Inspectorate is not in accordance with regulations, with some discrepancies.

The Ministry of Transport also attaches great importance to the project's capital recovery criteria, lacks reasonable research on the ability of traffic participants to pay fees as well as the impact on transportation costs and social costs before deciding to invest in the project; places some toll stations unreasonably close to each other, toll prices increase rapidly, causing difficulties for traffic participants, leaving no other choice. Typically in the areas of Hanoi, Thai Binh, Nam Dinh, Hoa Binh... There is a situation where drivers try to avoid toll stations.

On the other hand, the determination of revenue according to the financial plan of some projects is still inaccurate, the actual revenue of some projects is much different from the financial plan, which will be a burden for people and businesses participating in traffic because the toll collection period is prolonged.

Mostly renovation and upgrading of old routes

The conclusion of the Government Inspectorate also pointed out that most of the investment projects in the form of BOT are to renovate and upgrade old roads, which increases the accumulation of vehicles in already crowded areas, without aiming at expanding the network and dividing traffic lanes reasonably.

Some projects such as Hoa Lac-Hoa Binh road and upgrading National Highway 6 section Xuan Mai-Hoa Binh, Thai Nguyen-Cho Moi road project, and Phap Van-Cau Gie road upgrade project have decided on the scale of investment road level that is not suitable with the approved planning.

Toll collection on Phap Van - Cau Gie Expressway. Photo: Vnn

When approving investment projects, the renovation and upgrading of National Highway 6 was combined with the investment in the construction of a new Hoa Lac - Hoa Binh road and the renovation and upgrading of 7 km of National Highway 3 with the investment in the construction of a new Thai Nguyen - Cho Moi road into one project, and each project placed 2 toll stations in 2 unreasonable locations.

Approval of the investment project to upgrade the Phap Van - Cau Gie route into 2 phases of implementation has not ensured good connection and synchronization of existing traffic infrastructure and technical infrastructure items.

The project to restore and renovate National Highway 20 from Km123+105 to Km268 approved the purchase of the right to exploit toll stations for other projects not included in the list specified in the total investment; approved the site clearance costs that were not accurate, with large deviations from reality; approved the separation of the project to renovate National Highway 20 from Km0+000 to Km123+105 from the overall project from Km0+000 to Km268 into an independent project but did not fully comply with the regulations on project appraisal to determine the costs appropriate to the time of approval.

Through checking some contents on total investment for 6 projects, it was determined that the approved value had increased by over 451.6 billion VND.

Of which, the Phuoc Tuong and Phu Gia tunnel projects cost over 44 billion VND; the Phap Van-Cau Gie road upgrade project is 18.8 billion VND; the Hoa Lac-Hoa Binh road project and the renovation and upgrading of National Highway 6, Xuan Mai-Hoa Binh section is over 51.2 billion VND; the Thai Nguyen-Cho Moi road project is over 101 billion VND; the National Highway 20 restoration and renovation project, Km0+000 to Km123+105, is over 225.195 billion VND; the National Highway 20 restoration and renovation project, Km123+105 to Km268 is 11.14 billion VND.

According to the Government Inspectorate, the results of capital mobilization for BT and BOT projects did not achieve the goal of diversifying capital sources and economic sectors participating in investment; determining financial plans was inaccurate, especially the plan for collecting traffic fees.

Accordingly, in addition to the investor's capital contribution of 12% - 15%, the remaining 100% is bank loans with high interest rates, with no other capital sources participating; most of the loans are from state-owned commercial banks that hold a controlling proportion of charter capital and government-guaranteed loans.

Outdated toll collection methods cause traffic congestion, especially the unreasonable location of toll stations such as: Placing toll stations outside the project area (Phuoc Tuong road tunnel project, Phu Gia tunnel); using toll stations on this route to support toll collection for investment on other routes (Thai Nguyen-Cho Moi road projects, Hoa Lac-Hoa Binh road project and renovation and upgrading of National Highway 6, Xuan Mai-Hoa Binh section...).

The capital recovery fee collection mechanism is still inadequate; the fee collection price is high and the adjustment is unreasonable; the project has not been completed but the fee collection is equivalent to that of a new investment project...

“Those shortcomings, from each perspective, have a certain impact on the interests of investors and the State, and especially create pressure on high fees for people participating in traffic and transportation costs. In fact, there have been a number of incidents where people were upset and gathered in large numbers to protest, but so far there has been no definitive solution,” the Government Inspectorate pointed out.

According to Kieu Linh/Vneconomy