Many
build-operate-transfer investors have transferred their infrastructure projects
back to the Ho Chi Minh City government after operating them for a short time,
far sooner than originally planned, due to poor effectiveness.
In a BOT contract, a private company builds an infrastructure project,
operates it, and eventually transfers the ownership of the project to the
government.
But many investors have practically skipped the operate stage and
quickly jumped to the last stage -- transfer, since they have simply failed to
recoup their investment from operating the projects.
One of these is the Phu My Construction Investment Corporation (PMC),
which has recently demanded to return the Phu My Bridge, which connects Ho Chi
Minh City’s District 2 and 7, to the municipal government, instead of operating
it for 26 years as earlier contracted.
Inaugurated in September 2009, the 2.4-km Phu My Bridge, which spans
the Saigon River, was expected to attract a huge traffic flow of transporters
from the Mekong Delta to the central and northern parts of Vietnam, and help
ease congestion in the inner city.
However, over the last two years, few container trucks and other
heavy-weighted vehicles, the investor’s main source of toll collection, have
passed through the bridge that cost PMC a huge investment of VND3.4 trillion
($163.3 million).
The poor toll collection for recouping investment has driven PMC to ask
for help from the city’s government, while the contract has more than 20 years
remaining.
In response, the Ho Chi Minh City People’s Committee said in February
that they agreed to receive the bridge, a final conclusion following a series
of meetings held to discuss a solution to assist the investors that began when
the bridge was opened to traffic.
Other cases
But Phu My Bridge is not the first BOT project to die prematurely.
In 2007, the Construction and Natural Gas JSC, or IDICO – CONAC,
returned the project of upgrading Provincial Route No 15, which is now Huynh
Tan Phat Street in District 7, to the municipal government.
The move was made for a similar reason to the case of PMC, with IDICO
failing to regain investments from low toll collection.
The investor has recently received VND230.2 billion from the municipal
Department of Finance, as reimbursement for its investment.
Similarly, in 2006 the city’s Department of Transport had to repurchase
the BOT project of building the 285-m Ong Thin Bridge in Binh Chanh District
from CIENCO 5 at VND31.2 billion.
The investor gave up on the project since they were only allowed to
collect traffic fees worth no more than 65 percent of the rate stipulated by
the finance ministry.
False prediction
More and more BOT investors have given back projects to the public
sector due to the slow progress of recouping their huge investments, said
economic expert Le Dang Doanh.
Since most of the investors intend to reclaim money by setting up toll
booths, their recoupment plans will be ruined if there is little traffic
passing through the bridges or roads, he said.
Similarly, Doctor Nguyen Xuan Thanh, director of the Fulbright economic
teaching program, said it is risky for investors to take up BOT contracts.
The actual traffic flow through the projects does not meet the
investors’ expectations, so they have to get rid of them, said Thanh.
“[The investors] should have to share the risks with the government,
but as allowed by the contract, they have the rights to evade responsibility,”
he said.
“Hence, the government is now clearing debts for such projects.”
Tuoi Tre
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