The state needs to consider BOT as a special sector, which means it needs to have separate mechanisms for the transport infrastructure sector and not equate it with other commercial loans.
This is the recommendation of Mr. Phan Van Thang - Vice Chairman of Deo Ca Group at the seminar “Credit capital for traffic BOT project: To remove bottleneck and use effectively” organized by the People's Deputies Newspaper on December 17, 2020.
The seminar was attended by several National Assembly deputies, representatives of State agencies, representatives of credit institutions, experts and BOT investors. The content of the discussion is about the inadequacies encountered by traffic BOT investors, especially inadequacies in BOT credit, and suggested solutions.
The overview of the seminar
“Deo Ca tunnel project and Bac Giang - Lang Son expressway project were invested by Deo Ca Group in the form of BOT, the investor has completed the tasks in accordance with the commitment to the State. However, when the projects are put into operation, the payback fee revenue is almost not guaranteed”, said Mr. Phan Van Thang.
According to the representative of Deo Ca Group, this inadequacy is caused by the changes in policies and mechanisms, the lack of practice. The responsibility of the competent state agency in the project contract is not implemented. For example, in Deo Ca tunnel project, the State budget's initial commitment to contribute was 5,048 billion, the project was completed but so far, the State still owes the investor 1,180 billion. In addition, the situation of regional linkage planning not in accordance with the general plan is also a factor causing revenue decline.
Mr. Phan Van Thang – Vice Chairman of the Board of Directors of Deo Ca Group
In fact, BOT transport infrastructure investment projects have a great significance to the development of the country, contributing to changing the face of Vietnam's transport infrastructure, creating a driving force for socio-economic development, and promoting the development of businesses thereby creating jobs for people.
According to Mr. Luu Binh Nhuong, deputy head of the National Assembly's People's Aspirations Committee, the traffic BOT projects “not only make travel easier but also open up opportunities for disadvantaged areas”. In addition, the implementation of BOT projects over the past time has contributed to accumulating and supplementing experience in developing the country's traffic capacity. "There are pioneering businesses, willing to take the initial risk to learn experiences”, Mr. Luu Binh Nhuong said.
Playing such an important role, but in the past 2 years, no transport BOT project has been implemented because of the lack of investment credit.
The representative of Deo Ca Group said that, firstly, when participating in BOT investment, investors contribute at least 15% equity, but in negotiating process, the banks often require the businesses to pay other insurance costs. Second, although the banks spend a major part of the capital, they are not allowed to participate in the negotiation of BOT contract. Therefore, if the BOT contract has any inadequacies for the bank, it is very difficult for investors to negotiate credit loans.
In order to solve the financial problems of the implemented projects, and attract the participation of credit institutions as well as to take advantage of private resources in the development of the country's transport infrastructure system, Mr. Luu Binh Nhuong said that the banks, businesses, the Ministry of Transport and relevant state management agencies need to work together and remove the capital bottleneck for BOT project.
Dr. Nguyen Tri Hieu - A financial expert proposed policy to build BOT credit complexes, in which the State will guarantee them. It is necessary to determine that BOT loan is not a commercial loan but is a financing loan, so the interest rate needs to be lower. "The interest rate for BOT loans now is high, while the loan period is long and the risk is great, investors are struggling to pay bank interest, especially when the epidemic occurs”, Mr. Hieu said.
Share the same opinion, Vice Chairman of Deo Ca Group, Mr. Phan Van Thang suggested that the State needs to consider BOT as a special sector, which means it needs to have separate mechanisms for the transport infrastructure sector and not equate it with other commercial loans. The bank also needs to consider raising the lending ceiling for BOT projects.
In addition, besides calling for private enterprises to invest in BOT projects, the State needs to have policies so that investors can borrow credits from international banks and international financial institutions. For projects that are still facing difficulties, it is necessary to have an orientation and drastic solution to not to lose confidence in credit institutions.
By Ngoc Trang
