BOT toll fee hike to increase costs for VN logistics firms
The Ministry of Transport’s (MOT) proposal to increase the BOT toll fees has faced strong opposition from logistics firms.
MOT has proposed that the government increase BOT toll fees in an effort to help BOT investors overcome current difficulties. The investors have been reported as incurring big losses because of sharp decreases in revenue because of Covid-19 which resulted in less traffic.
Le Duy Hiep, chair of the Vietnam Logistics Association (VLA), said any attempt to increase fees is unreasonable which is contrary to the government’s policy on supporting businesses to overcome the pandemic.
VLA is against the plan to increase BOT toll fee, said Hiep, adding that the fee accounts for a large proportion in total transport costs. On some important routes, BOT fees are nearly equal to the expenses on fuel, accounting for 20 percent.
|VLA is against the plan to increase BOT toll fee, said Hiep, adding that the fee accounts for a large proportion in total transport costs. On some important routes, BOT fees are nearly equal to the expenses on fuel, accounting for 20 percent.|
“Even without Covid-19, the logistics cost in Vietnam is sky high already. Meanwhile, we have to reduce the logistics fees to the regional average level, 14-15 percent of GDP, as per the request of society and the State,” he said.
Transport costs in general account for 50 percent of total logistics costs.
Chair of the Vietnam Automobile Transport Association Nguyen Van Quyen said transport firms are meeting big difficulties with Covid-19. The firms have been operating at a moderate level for many months with just 30-50 percent of capacity.
Transport activities have been resumed after social distancing was loosened, but the cargo and passenger volumes remain modest.
As for BOT projects, Quyen said there is pressure to be sure that the financial plans and commitments in BOT contracts are implemented.
Therefore, he believes that when all business fields are meeting difficulties because of Covid-19, ministries and branches need to consider thoroughly the BOT fee increase.
Truong Thi Diem Phuoc from VCAC also said that MOT and investors need to conduct thorough research on the possible impact of the toll fee increases on the transport sector in the long term, and to avoid sudden fee increases.
The research will show how business fields would be affected by the move, thus allowing solutions to the problems to arise. This would ensure that the fee increase won’t significantly affect the freight rates and goods prices.
“Experts fear that the BOT fee increase would increase the transport service fee. However, everyone can see that though petrol prices have dropped sharply by 40 percent recently, freight and goods prices have not decreased,” she said.
The Ministry of Transport has recently proposed the Government to consider and approve the option of increasing BOT toll fees in order to remove difficulties for the investors who suffered revenue losses.
Regulatory risks are the biggest barrier to attracting private investors to the infrastructure sector.