Why are many BOT traffic projects recommended to be suspended?

Proposal to stop upgrading many routes under BOT form

Recently, the Ministry of Transport has proposed to the Prime Minister to stop upgrading two projects from national highways to expressways, namely Cho Moi - Bac Kan and the new National Highway 3 (Hanoi - Thai Nguyen). Both of these projects have been approved in principle by the Prime Minister for investment. For the new National Highway 3 project, Hanoi - Thai Nguyen section, the Ministry of Transport has signed an agreement assigning investors to propose the project and prepare a feasibility study report, while the BOT Cho Moi - Bac Kan project is currently only in the stage of proposing investment options.

Similarly, the investment project to upgrade and renovate the section through Mimosa Pass was also proposed to be stopped, although under the direction of the Prime Minister, the Ministry of Transport agreed with the People's Committee of Lam Dong province and approved additional investment to upgrade and renovate the section through Mimosa Pass in component project 2.

The Ministry of Transport has proposed stopping upgrading many roads under the BOT model.

Previously, two other projects, the BOT project to upgrade National Highway 30 and the project to upgrade National Highway 31, section from Bac Giang city to Chu town, Bac Giang, were whistled on even though they had prepared for investment or even started construction.

Mr. Nguyen Danh Huy - Director, Head of the Board of Investment Management of Public-Private Partnership (PPP) projects - said that stopping the above projects is necessary to select substantive and effective projects, prevent possible problems and focus resources on key projects such as the North-South Expressway...

If the investor violates or the project is defective, it must be stopped immediately.

According to Mr. Nguyen Danh Duy, there are two main reasons why the Ministry of Transport blew the whistle on many BOT traffic projects that have been, are being, or are about to be implemented. The first is to strictly implement the policy of Resolution 4371 of the National Assembly and summarize the assessment of the Ministry of Transport on investment in BOT traffic projects.

Accordingly, all upgrading and renovation projects on existing roads, projects implemented according to the policy of investing in one place and collecting tolls in one place have been stopped, such as the project of merging the Cho Moi - Bac Can expressway into the Hanoi - Thai Nguyen expressway to collect tolls at one place to pay back the other place.

According to Mr. Huy, such projects are not suitable for investment and stopping them not only ensures strict implementation of the National Assembly's policy but also avoids the shortcomings that have occurred. The second reason is related to investors when the project's financial plan is not feasible or the investor has violated the implementation process such as not being able to mobilize enough necessary capital...

Regarding the consequences of these decisions, Mr. Huy said that the damage is not much because most of the projects have not been implemented or have just started. For example, the QL53 project in Tra Vinh has just started but was stopped because the investor violated the law, so there is no need for compensation. As for some items that should have been public investment, such as design consultancy, the ministry will negotiate to pay for reasonable expenses incurred.

According to some experts, stopping unreasonable projects is inevitable to avoid repeating previous shortcomings. However, the above decision still has some negative impacts and in some cases will not be easy to resolve because the legal corridor for PPP projects is currently incomplete.

Besides, the above decisions more or less affect the investment environment and make not only domestic investors but also foreign investors have to consider carefully when entering this field.