Investment News

The Government wants road toll collection automated at all the build-operate-transfer (BOT) tollgates by late 2019. However, the target may be missed as the investor of the project could not secure enough equity to develop such automated collection systems.

According to the Directorate for Roads of Vietnam, electronic toll collection system

provider has yet to have sufficient equity under the build-own-operate investment format

As initially planned, electronic toll collection (ETC) systems should have been installed at all 28 BOT tollgates late last month. But just 22 stations have been equipped with the systems. Therefore, manual toll collection systems will still exist at the remaining tollgates.

ETC system provider VETC has yet to have sufficient equity under the build-own-operate investment format, according to the Directorate for Roads of Vietnam.

As stated in a contract with the Transport Ministry, VETC must prove it has VND277 billion (US$12.1 million) in equity. If the company fails to meet the requirement, the ministry could terminate the contract. So far, the former has mobilized VND129 billion, or less than half of the required funding.

The biggest obstacle is that the project’s revenue falls short of criteria in the approved financial plan, so the company could not offset its costs as planned.

ETC systems would have been installed at all of BOT tollgates by the end of next year, according to the plan.

VETC enjoys benefits through deals to offer its ETC service to BOT investors. In the 2016-2018 period, the revenue of the service should be all the organizational and management costs that will be otherwise incurred in the absence of ETC systems.

However, BOT investors wanted to retain half of those costs to ensure that such systems would work smoothly in the toll collection process, instead of transferring all such costs to VETC.

Due to this disparity, VETC’s estimated revenue fell by half, and the company is now faced with a financial imbalance. It lost an average VND12 billion on an annual basis, and an accumulated VND123.7 billion upon two years of executing the project.

In order to pay a fee through an ETC system, each automobile owner will be issued an E-tag card based on Onboard Unit equipment installed on his or her vehicle, along with a toll payment account.

When the vehicle passes through a toll collection lane, the system will activate a camera to photograph the vehicle’s number plate while reading the card. Money from the vehicle owner’s account will be deducted, and a text message will be sent to his or her mobile phone.

If drivers do not use the system or their accounts do not have enough balance, they will have to pay in cash as in the traditional toll collection system.

 

Source: The Saigon Times

Related stories