How to collect tolls on highways invested by the State?

However, how to collect fees to ensure efficiency is still a problem that needs to be solved.

Two toll models

Vietnam Road Administration said that in the next 10 years, the demand for new investment capital for highways will reach nearly 240,000 billion VND, while maintenance capital can only meet about 40%.

Human resources for managing and operating the highway is also a difficult problem, as by 2030, 10,000 workers will be needed to operate it.

The Road Law recently passed by the National Assembly has added regulations on collecting usage fees for vehicles traveling on expressways invested, owned, managed and operated by the State (In photo: North-South Expressway, section QL45 - Nghi Son). Photo: Ta Hai.

According to Mr. Le Hong Diep, Head of the Department of Traffic Infrastructure Management and Maintenance, Vietnam Road Administration, after the construction investment is completed, the expressway will be handed over to the owner or manager of the project for management and operation.

However, many project owners assigned to manage and operate the project still have limited expertise and lack highly qualified personnel. The allocation of capital for managing and exploiting the highway is not timely and adequate.

To address this issue, the Road Law (effective from January 1, 2025) has added many new regulations to mobilize resources for the construction, management, exploitation, and maintenance of highways, including regulations allowing toll collection on highways invested by the State.

Mr. Bui Quang Thai, Director of the Vietnam Road Administration, said that the current problem is choosing between two forms of management, exploitation and toll collection on expressways.

The first is that the State organizes and implements itself. The second is to grant the right to manage and exploit to the private sector.

According to Mr. Thai, with the first form, the agency managing highway assets, the Vietnam Road Administration, organizes the collection itself.

Through bidding, a contractor will be selected to provide toll collection services on the non-stop automatic toll collection system platform.

This option has the disadvantage of collecting fees in a "gradual" manner. After deducting costs, the collection organization will pay the fees to the budget.

The second form is bidding for highway management under the form of an operation-management (O&M) contract.

The investor will collect tolls and manage and maintain the route. The government sells the right to collect tolls on the expressway for a certain period of time and immediately collects a sum of money.

This option has many advantages, but with low traffic expressways it will be difficult to attract investors.

Public investment, private management?

Analyzing the above two models from the investor's perspective, a leader of Phuong Thanh Investment and Transport Joint Stock Company said that if the plan of Vietnam Road Administration organizing the collection itself is implemented, capital recovery will not be focused, making it difficult to achieve the goal of quick recovery to have resources to reinvest in traffic infrastructure projects and works.

According to Article 50 of the Road Law, the State collects highway usage fees for vehicles traveling on highways invested in, owned, managed and operated by the State, including: Highways invested by the State in the form of public investment; highways invested in other forms when the contract ends, transferred to the State.

Regarding the management and use of revenue from highway usage fees, the Law stipulates: The road management agency directly organizing the exploitation of assets shall pay the collected fees into the budget according to the provisions of the law on fees and charges.

The organization receiving the franchise fee collection and business and management franchise must pay the franchise fee as prescribed into the State budget. The fee amount collected during the performance of the transfer contract does not have to be paid into the State budget, except for the revenue that must be shared with the State as prescribed by law.

As for the option of selling toll collection rights, investors can count vehicles to make preliminary calculations and consider investing capital. However, it is likely that the traffic volume will be high before toll collection, but will decrease when toll collection is completed.

In particular, commercial transport vehicles can easily choose to go on the highway to save costs, but there are still risks regarding financial plans.

"The State can study and implement option 1 for about 1-2 years. Then, based on actual traffic volume, toll collection rights will be sold.

Investors can also easily measure and evaluate the efficiency and stability of traffic flow on the route to make investment decisions.

This is the most optimal and harmonious solution, ensuring that the State does not suffer losses and investors are also assured," he suggested.

Meanwhile, Associate Professor Dr. Tran Chung, Chairman of the Vietnam Road Transport Construction Investors Association, said that the model of the State building roads and then selling toll collection rights and bidding for management in the form of O&M has been effectively applied for a long time in many countries.

In Vietnam, O&M is one of six forms of public-private partnership (PPP), stipulated in the PPP Law, but currently only the BOT investment form is applied in practice.

According to Mr. Chung, the O&M model has many advantages such as the government does not have to maintain a management apparatus, collect fees and has immediate money to reinvest in new highways.

The problem is how to choose a professional contractor with capacity in technology and equipment.

"Public investment and private management is an effective model in many fields, not just transportation.

With this model, the State manages and supervises the exploitation and operation process through economic contracts and public bidding, clearly showing the rights and obligations between the parties," said Mr. Chung, adding that for expressways with low traffic volume and difficulty in attracting investors, it is necessary to establish appropriate prices, the toll collection period can be longer, ensuring the feasibility of financial solutions for investors.

Open and transparent about fees

According to Mr. Le Quynh Mai, Vice Chairman of the Board of Directors of Deo Ca Group, the O&M model needs to be diverse and flexible because no two expressways are the same.

The State can select financially capable investors to sell toll collection rights for a certain period of time (5 years, 10 years or other periods depending on the nature of each expressway).

Or you can choose a contractor to manage, operate, collect fees, and then pay the fees periodically on a quarterly or annual basis.

The North-South Expressway, section QL45 - Nghi Son, is one of the routes expected to collect tolls. Photo: Ta Hai.

According to National Assembly Deputy Pham Van Hoa, member of the National Assembly's Law Committee, many countries in the world have applied and implemented toll collection on roads invested by the State.

With two toll collection options, Mr. Hoa thinks that both should be combined.

Specifically, for busy routes with high traffic volume, toll collection rights can be sold, while for low traffic routes, the State will collect.

National Assembly Deputy Pham Van Thinh, member of the National Assembly's Economic Committee, also said that both options have certain advantages and disadvantages.

Regardless of the method used, it is necessary to pay attention to the principle of publicity and transparency regarding the amount of fees collected and operating costs.

"I'm leaning towards the option of the State collecting directly, just hiring a unit to operate the toll collection, then paying a percentage.

If the toll collection rights are sold outright, it will be difficult to attract domestic investors. Because the amount of money that businesses have to spend to bid for the toll collection rights is very large," said Mr. Thinh.

There should be a bid adjustment clause.

Considering option 2 to be appropriate, expert Le Xuan Nghia, a member of the National Monetary and Financial Policy Advisory Council, affirmed that this option both ensures market nature and the goal of "State and people working together", is transparent and reduces the burden on management agencies.

Routes expected to collect tolls

Expressways in operation: Lao Cai - Kim Thanh, Hanoi - Thai Nguyen, Ho Chi Minh City - Trung Luong, Cao Bo - Mai Son, Mai Son - National Highway 45, National Highway 45 - Nghi Son, Nghi Son - Dien Chau, Cam Lo - La Son, La Son - Tuy Loan, La Son - Hoa Lien, Vinh Hao - Phan Thiet, Phan Thiet - Dau Giay, Ben Luc - Trung Luong, My Thuan 2 Bridge and access roads at both ends of the bridge.

Routes under construction until 2025: Bai Vot - Ham Nghi, Ham Nghi - Vung Ang, Vung Ang - Bung, Bung - Van Binh, Van Ninh - Cam Lo, Hoa Lien - Tuy Loan, Quang Ngai - Hoai Nhon, Hoai Nhon - Quy Nhon, Quy Nhon - Chi Thanh, Chi Thanh - Van Phong, Van Phong - Nha Trang, Can Tho - Ca Mau.

However, he noted that to attract investors, transparency and simpler procedures are needed, because this is not a very complicated issue: "We just need a technological solution to know exactly how much fee is collected and what the annual revenue of the investor is," said Mr. Nghia, adding that we should not let a consortium of contractors bid but choose a single contractor.

Because the bidding is to select the administrator, not the technical field or the supply of materials to be able to "borrow strength" from each other.

Sharing the same opinion on choosing option 2, Mr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), explained that only private investors can calculate the most accurate profits and be responsible for the money they spend.

According to Mr. Viet, learning from the experience of previous BOT toll stations, it is advisable to assign independent consultants to research and develop plans, and the Ministry of Transport will provide criteria and make appropriate adjustments.

"Everything has international experience, the most important thing is to get opinions from relevant parties to know where the problems are and what needs to be changed," said Mr. Viet.

Option 2 is also the choice of Dr. Nguyen Bich Lam, former General Director of the General Statistics Office (Ministry of Planning and Investment).

According to him, this solution is beneficial for both sides: "If the private sector manages, they will quickly decide on repairs and maintenance... without having to wait through many procedures, and the State will immediately collect a sum of money."

However, Mr. Lam noted, there should be a clause on bid adjustment: "Suppose after the bidding, the number of vehicles increases, the investor's revenue increases, then what? Or if the investor's revenue is less, leading to a loss, then how will it be handled?"

According to him, there should be a certain threshold for increase, if the increase exceeds the threshold, it will have to be paid back to the State budget, and if it decreases, it should be at a certain threshold, investors also need to report promptly so that solutions can be studied before it is too late.

Regarding the impact on the CPI index, Mr. Lam said that this will certainly be carefully calculated: "The CPI story is very small in the nature of toll collection."

How do countries collect highway tolls?

Some countries in the world invest in developing highways from public investment capital. After putting them into use, they collect tolls for operation, maintenance, capital recovery and reinvestment in developing and expanding new highway networks.

Currently, China collects tolls on more than 150,000km of highways using technology and non-stop automatic toll collection.

China applies the form of transferring the right to collect tolls on expressways. After the transfer, the recipient will collect tolls and operate.

The term of transfer of toll collection rights is according to the agreement, the period shall not exceed the number of years prescribed by the State.

In the United States, the government owns and is responsible for investing in highway construction and organizing bidding.

The private sector is responsible for maintenance, toll collection and operation of federally-built roads through a concession agreement for a period of 5-15 years.

Interstate highways are funded by federal funds through the Highway Trust Fund, which is funded by federal fuel tax revenues.

In Korea, the government built a model of establishing expressway corporations as state-owned enterprises, state-owned expressway companies.

The corporations are responsible for developing highway development plans.

In order to rapidly develop highways, Korea implemented a model of supporting 50% of the total investment and the corporation taking responsibility for 50%.

Investment capital supported by the State is used to pay for compensation for site clearance and project implementation and investment in road construction.

For expressways built and put into operation by enterprises, the corporation will directly manage operations and collect fees.

All of this revenue is pooled into a fund and used for route management and maintenance costs.

Trang Tran

Source: https://www.baogiaothong.vn/thu-phi-cao-toc-do-nha-nuoc-dau-tu-the-nao-192240702055945127.htm