Investors, bankers flee from BOT projects

Last update 13:00 | 11/04/2017


VietNamNet Bridge – Investors are fleeing from BOT (build-operate-transfer) projects in the transport sector after encountering many difficulties. 

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BOT investors are now in a dilemma as toll collection is not big enough to pay bank debts.

Tran Ngoc Le from Yen Khanh Production, Trade & Service Company, one of the major investors in the Hac Tri Bridge in Phu Tho province, said the monthly turnover from the project is VND5 billion, while the company has to pay VND10 billion in bank loan interest.

The investor initially expected to take back the investment capital after 17 years, but it has realized that the time may be 50 years.

SCIC (the State Capital Investment Corporation) , one of the six investors of the VND12 trillion Bac Giang – Lang Son BOT project, decided to quit just one month after the groundbreaking ceremony. It kicked off in October 2015 and is expected to be completed prior to December 31, 2018.

Investors are fleeing from BOT (build-operate-transfer) projects in the transport sector after encountering many difficulties. 

A short time later, the Phuong Thanh Transport Investment & Construction Company, also one of the investors, decided to reduce the capital contribution ratio from 25 percent to 5 percent.

Most recently, in March 2017, the group of investors officially quit the project as they could not mobilize sufficient capital as required.

Meanwhile, Geleximco, which is thought to take over the project, has not confirmed if it would become a major investor of the huge project.

Tasco, known as the biggest BOT investor, has recently announced it will stop  investment in BOT projects to gather strength in other fields.

A representative of the company said Tasco has poured VND15 trillion into BOT projects in the last 10 years and obtained profitability rate of only 11.5 percent per annum.

Analysts commented that investors were rushing to quit BOT projects after the State Audit discovered a lot of problems when examining key projects and proposed solutions to tighten control over the projects of this kind.

Bui Danh Lien, chair of the Hanoi Transport Association, commented that the proposals, which aim to choose the most capable project developers, have made investors shrink back.

Lien, while affirming that the state once slackened management over BOT projects, agreed that it is necessary to set stricter requirements on investors.

Investors must have stockholder equity equal to at least 10 percent of projects’ total investment capital to be eligible to register to develop projects.

He went on to say that there was no need to build so many highways, when Vietnam has to save every dong for investment and development.


Foreign investors power up with raft of new BOT projects

SBV tells commercial banks to restrict disbursement for BOT projects

M. Ha

This entry was posted in Hạ tầng giao thông - Transport infrastructures, Kết cấu hạ tầng - Infastructures, Đường bộ - Highways and roads and tagged , , , by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development ( I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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