Amending the PPP Law, "clearing" the flow of capital for investment in transport infrastructure

Businesses and experts expect the revised Law on Investment under the Public-Private Partnership (PPP) model will remove difficulties for existing transport projects and build investor confidence in future projects.

Hope for the struggling BOT project

Within the framework of the field survey trip, checking the progress of the implementation of the two highway projects Huu Nghi - Chi Lang and Dong Dang - Tra Linh and working with the two provinces: Cao Bang, Lang Son on November 14, removing difficulties for the Bac Giang - Lang Son BOT project is one of the important contents directed by Prime Minister Pham Minh Chinh.

Bac Giang - Lang Son Expressway.

Accordingly, the Prime Minister assigned the Ministry of Transport to study and report on the consideration of the possibility of state budget support for BOT projects in operation.

Giving opinions at the working session, the leader of the Ministry of Transport proposed that the Prime Minister assign the Government Office to advise on the preparation of a report to submit to the National Assembly Chairman on the content of state budget support for BOT projects in operation facing difficulties, ensuring feasibility and compliance with current legal regulations.

Regarding the level of support, the Ministry of Transport will closely coordinate with relevant units to calculate and determine specifically, ensuring the principle of maximum savings, avoiding waste of resources but still effectively supporting projects, contributing to removing difficulties and promoting the development of transport infrastructure.

The Prime Minister's strong direction and the support of specialized ministries once again opened up hope of escaping difficulties for the Bac Giang - Lang Son expressway project.

According to the project enterprise's report, after 5 years of operation, the project recorded toll revenue reaching only 32% of the initial financial plan. The capital recovery cash flow was in deficit due to reasons not originating from the investor.

Looking forward to the revised PPP Law

According to statistics compiled by the Ministry of Transport, before the PPP Law was promulgated (2020), the whole country had mobilized nearly 319,000 billion VND to invest in 140 transport projects under the PPP method, BOT contract form.

PPP projects put into operation contribute to bringing positive effects in socio-economic development, while gradually realizing Resolution No. 13-NQ/TW of the Party.

However, after the PPP Law officially took effect in 2021, the number of transport infrastructure projects invested in this method tended to decrease.

Speaking to the press, Associate Professor Dr. Tran Chung, Chairman of the Vietnam Association of Road Transport Construction Investors (VARSI), affirmed that if the shortcomings in the current PPP Law are not thoroughly resolved, investor confidence will decline.

Many projects that could have been implemented under the PPP form were instead transferred to public investment, leading to a waste of resources and going against the goal of attracting socialized investment.

"Frankly speaking, the content of the PPP Law does not ensure fairness among participating entities," Mr. Chung shared.

Speaking at the National Assembly on November 6, Delegate Tran Van Tuan, Deputy Head of the National Assembly Delegation of Bac Giang province, commented that some contents mentioned in the draft revised PPP Law are of great interest to investors, including the addition of State capital to handle the risk of reduced revenue of PPP projects.

According to this delegate, the Drafting Committee needs to study and add to the draft Law provisions on State capital support for PPP projects signed before the Law takes effect if necessary; At the same time, it is necessary to assign the Government to specify in detail the procedures, subjects of application, and risk sharing mechanism between investors and lenders.

Delegate Luu Ba Mac, Lang Son National Assembly Delegation, said that for BOT projects in operation, the difficulties and obstacles due to objective reasons, not originating from investors, have been quantified, and solutions need to be found to harmonize interests and share risks among related parties.

"The Law drafting agency needs to consider and review more carefully to remove difficulties for businesses and related agencies, contributing to improving the efficiency of the PPP investment method," emphasized the delegate of Lang Son province.

Mr. Luu Ba Mac commented that it is necessary to adjust the mechanism for sharing increased and decreased revenue as stipulated in Article 82 of the current PPP Law, to apply to BOT projects that signed contracts before the PPP Law took effect. This helps to flexibly handle old contracts, ensure harmonious interests between the parties and be consistent with new legal changes.

In the draft Law amending and supplementing the PPP Law submitted to the National Assembly for consideration, solutions for projects that must terminate contracts have been proposed.

However, according to many experts, the mechanism to support state budget capital for PPP projects that have been put into operation but are facing financial difficulties or transitional conditions during the law application process has not been considered in the draft Law.

Source: https://www.baogiaothong.vn/sua-luat-ppp-thong-dong-von-dau-tu-ha-tang-giao-thong-192241125203344569.htm