Name of recommendations: Recommendation on inadequacies in the management and operation of PPP transport projects

Status: Has been incompletly responded

Recommended by units: The Song Da Corporation

Official letter: 1389/PTM - VP, dated: 2017-06-13

Recommended contents:

At present, the Song Da Corporation is directly managing and operating two BOT projects, which are namely Ngang Pass Tunnel Project and Ha Tinh Highway Project. In the process of exploiting and operating these roads, investors have encountered many difficulties from the opposition of the local people, causing the loss of security and traffic safety. This will have potential risks to the sustainability of the project. On the other hand, in the process of adjusting the financial plan of the projects, the investor encounters the disadvantages such as turnover, the state management agencies request to apply according to the actual revenue, The finalization of the BOT contract (many regulations are no longer suitable to the actual situation); the investor shall pay interest according to the actual situation of the lending bank, but the adjusted financial plan shall be calculated only according to the provisions of the contract; on the basis of the time for fee collection under the approved investment projects, the investor shall depreciate the depreciation of the property under the BOT contract and pay enterprise income tax in accordance with the State's regulations. However, when the competent state agencies adjust the shorter collection period than the signed contract, the investor shall make additional depreciation, but shall not be refunded the income tax paid for the actual years. depreciated under the BOT contract. Due to the above inadequacies, it has caused disadvantages for the investor and greatly affected the investment efficiency.

The Song Da Corporation recommends to have a clear and transparent mechanism for investment in PPP projects from the beginning so that investors can assess the level of risk before investment and when they have been implemented, investors are allowed to exploit the project in accordance with the approved financial plan (to be responsible for profits or losses).