Proposal to provide financial support for troubled BOT traffic projects

In the context of financial difficulties facing BOT (Build-Operate-Transfer) traffic projects in Vietnam, the Ministry of Transport (MoT) has proposed adding regulations to the Draft Public-Private Partnership Investment Law (amended PPP Law) to address these issues. One of the key proposals is the use of state capital to support BOT projects that are in the operational phase and facing financial difficulties, enabling investors to continue executing the contracts.

This is considered a necessary solution to ensure that transportation infrastructure projects can continue operating and not face delays. The Ministry of Transport also emphasized that BOT projects signed before 2021 will be the primary beneficiaries of this policy.

The Ministry of Transport (MoT) has proposed an amendment to the transitional provisions in the draft revised PPP Law to ensure a solid legal basis for using state capital to support BOT projects. This proposal is considered a temporary solution to address the financial difficulties of traffic BOT projects during their operation phase. It will help reduce the financial burden on investors and allow the continuation of contracts already signed, while protecting the interests of the public and stakeholders.

Specifically, according to the proposal, traffic BOT projects that signed contracts before 2021, if facing financial difficulties during the operation phase, could use state capital to continue implementation. This will ensure that these projects are not disrupted and meet the important transportation needs of the public.

Traffic BOT projects, especially those that signed contracts before 2021, are facing various financial challenges, including the risk of reduced revenue due to competition from other infrastructure projects. These factors increase pressure on investors, preventing them from fulfilling commitments in the contracts.

The MoT stated that using state funds to support the continuation of contracts will help investors overcome temporary difficulties, ensure progress in construction, and operate transportation infrastructure projects. This is one of the key solutions in the current context when BOT projects are facing capital shortages or revenue below expectations.

In addition, the MoT has also proposed several legal solutions to help traffic BOT projects overcome financial difficulties. These include reducing loan interest rates or extending the repayment period for investors.

While this solution has the potential to address the challenges faced by BOT projects, the MoT also emphasizes that not all projects will be eligible. The government will set specific conditions and criteria for using state funds to ensure fairness and transparency. Projects must meet certain requirements, such as actual financial conditions, the urgency of the project, and the responsibility of stakeholders, especially investors.

The MoT also believes that to prevent abuse of this policy, support must be carried out within a clear framework, with strict oversight from relevant authorities. This will ensure that the policy is not exploited for personal gain, while protecting the rights of the public and the State.

The MoT affirms that adding regulations on financial support for BOT projects during the operation phase will not only help resolve difficulties for investors but also ensure long-term benefits for all stakeholders. The ultimate goal is to protect the interests of investors, lending banks, and most importantly, the public, who will benefit from completed and stable operational transportation infrastructure.

Furthermore, the MoT is committed to working closely with the Ministry of Planning and Investment to develop clear conditions and criteria for applying this policy, to ensure fairness in the allocation of state funds. The government will require all parties involved to share financial responsibility equitably, minimize financial losses for the State, and protect the legal rights of participants.

PV