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The government "lends" credit risk to BOT traffic

 

Most of the projects have a long repayment period, the value of collaterals is mainly the property formed from the loan, so it is difficult to value ...

 

The change of state policies such as reducing fees, adjusting the roadmap for increasing transportation fees ... have been and will directly affect the source of debt collection of credit institutions with funding for the objects project.

This statement is stated by the Government in the report on the implementation of policy books on investment and exploitation of traffic works in the form of Build-Operate-Transfer (BOT) contracts.

On 24/7 the monitoring mission of the National Assembly Standing Committee worked with the Government, Ministries on the above content.

It can be difficult to recover capital

According to the analysis of the Government, the relationship between investors and banks is the economic relationship that is bound by the contract of credit for the project. Some banks and branches of banks have not yet analyzed, fully assessed the risks in the appraisal process and signed credit contracts to finance the project.

In the course of implementation, credit institutions have also been identified as having insufficient attention to control of capital allocation, disbursement, payment and control of toll collection and management of toll revenue. Some bank branches provide credit commitments beyond their authority.

The government is also "worried" about credit risk because most of the projects have a long repayment period, the value of collateral assets is mainly formed from the loan, so it is difficult to determine the price and if the project The project is not implemented or not completed on schedule, not effective as expected, causing difficulties for the recovery of capital of credit institutions.

The report also mentioned liquidity risk: the loan period for BOT and BT projects usually lasts about 15-18 years or even 25-30 years. Revenue from this investment through fees and charges will take 5 - 7 years, new investors have cash flow repayment, while banks usually have only short-term deposits, the focus for Borrowing these projects may imbalance the balance on the balance sheet and reduce the liquidity of the lending bank.

In order to limit the risks of granting credits to BOT projects, the State Bank has also issued many effective policies to timely warn credit institutions to provide credit for the projects. On the other hand, it contributes to the credit orientation of the priority sector under the guidance of the Government.

The change of government policy (reduction of fees and adjustment of the roadmap for raising traffic charges) has been and will directly affect the debt collection sources of credit institutions that have financed the project beneficiaries. There is a risk that the debt repayment schedule should be restructured and that the group of debt will be transferred when the debt collection source is lower than the financial plan when the project is approved.

Need to keep adjusting

The legal framework for public-private partnerships (PPPs) is a very important issue set out in the monitoring.

According to the Government, many laws in construction are approached from the point of view of regulating public investment and private investment, not to mention the particularities of private-public investment.

The PPP legal framework is still subject to a number of specialized laws throughout the life of a PPP project, from preparatory steps to investment and operation, and exploitation of the project, while these are mainly covered by the PPP. Built to regulate public investment or private investment.

Although the PPP decree was issued, the competent state and private agencies still face many difficulties (procedures, procedures and content needed to implement the project investment decision, monitoring work. Acceptance and payment of special works for management of the State's capital contribution, quality monitoring and management in the course of investment and exploitation, preferential mechanisms and investment security). In addition, the laws are overlapping, not to take into account the specificity of PPP investment.

Due to the incomplete legal framework, many contents beyond the authority of the Government and ministries, the implementation process encountered many difficulties, the implementation of the responsibility of competent state agencies difficult to ensure effective Force - the government emphasized.

In addition, some projects implemented before 2010, the subjects have no experience in compiling bidding documents, negotiating terms of contracts and financial planning, and at the same time, Inadequate sanctions for the violation of investors have not ensured the deterrence.

This is a new form of investment, which is more complicated than traditional public investment, while the system of legal normative documents is not complete; State agencies, investors, commercial banks are not enough experience, so many requirements of reality are not met.

A number of subjects and individuals who have not yet completed their functions and tasks have been instructed by the Government to direct their ministries or branches to examine and clarify the responsibilities of collectives and individuals for seriously reviewing, Correct timely, avoid losses, waste.

The form of BOT investment is recognized by the government as "having advantages, but at the same time there are more disadvantages and complications than traditional public investment." "The projects have a long payback period, large capital investment, the first few years into operation, the basic revenue is not enough to pay interest, many inputs are predictable and difficult to control. Without effective management and control, the advantages of this form of investment can not be promoted and, at the same time, can lead to higher total investment costs than public investment. "

The next observation from the Government is that current investors are mainly domestic enterprises. Many investors are not very knowledgeable about BOT investment, have not considered, quantified risk, and have limited experience in investment management, mining operations or some investors can "target In the process of implementation, there are some shortcomings, limitations and risks in the process of operation (must be self-financing to repair the defects, Spoiled).

In addition, there are obligations under the state, but there are no regulations related to the responsibility of the state, so investors still bear the risk.

The government also said that the delegation of authority, responsibility for quality management, approval of estimates for investors is consistent with international practice, but in the specific context of our country at present, Domestic investment is not really professional; The process of design - construction - supervision - payment closed in accordance with the process of investors have revealed the inadequacies, competent state agencies also can not directly intervene in the management process of Investors. Therefore, this content should continue to be reviewed and adjusted to suit the reality.

 

According to Ha Minh
Vneconomy

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