Shaping the plan for collecting tolls on highways invested by the State

Authorities are urgently completing the necessary and sufficient conditions to be able to implement toll collection on expressways invested by the State from October 1, 2024 according to the provisions of the newly issued Road Law.

Mai Son Expressway – National Highway 45

Harmony of interests

The Vietnam Road Administration has just submitted to the Ministry of Transport a draft Government Decree regulating highway usage fees.

This is a decree guiding the 2024 Road Law with the aim of regulating the collection rates, collection, payment, exemption, management and use of highway usage fees collected for vehicles traveling on highways invested, owned, managed and exploited by the State under the management of the Ministry of Transport .

The first important highlight in the Draft is that the drafting agency identifies three conditions regarding infrastructure and resources to implement this important policy.

Accordingly, the first necessary condition for expressways invested by the State to be allowed to collect tolls is that the project is designed and invested in according to technical standards and regulations on expressways and other relevant technical standards and regulations.

The second condition is that the expressway project has completed construction and been put into operation and use according to the provisions of the law on construction.

The third condition is to have completed the construction and installation of toll station infrastructure, software systems, and equipment to ensure operations and toll collection services according to regulations.

For expressways put into operation before January 1, 2025 that do not meet the provisions in Clause 1, Article 45 and Clause 2, Article 47 of the Road Law, toll collection will be implemented after meeting the second and third conditions. According to the leader of the Vietnam Road Administration, this is also a mandatory requirement stipulated in the Road Law.

Compared with the above conditions, the Vietnam Road Administration said that there are currently 12 projects/expressway sections invested by the State, representing the owner, completed and put into operation, and can implement toll collection.

These expressway projects/sections include Lao Cai – Kim Thanh, Hanoi – Thai Nguyen, Ho Chi Minh City – Trung Luong, Cao Bo – Mai Son, Mai Son – National Highway 45, National Highway 45 – Nghi Son, Nghi Son – Dien Chau, Cam Lo – La Son, La Son – Hoa Lien, Vinh Hao – Phan Thiet, Phan Thiet – Dau Giay, My Thuan – Can Tho. Of these, 8 projects on the Eastern North – South Expressway have just been put into operation.

The number of expressway projects will double by the end of 2025, if the 12 component projects of the North-South Expressway Construction Investment Project in the Eastern region for the 2021-2025 period are completed on schedule.

Calculations by the Institute of Transport Strategy and Development, the results of quantifying the operating costs and time costs of vehicles show that, compared to traveling on parallel national highways, vehicles traveling on expressways will benefit an average of 4,824 VND/vehicle/km, of which 25% comes from saving on vehicle operating costs and 75% comes from saving on time for goods and passengers on the road. "The type of vehicle that benefits the most is a passenger van with 30 seats or more with an average of 14,132 VND/vehicle/km, the vehicle that benefits the least is a truck under 2 tons with an average benefit of 1,174 VND/km. The average benefit per vehicle unit is 2,616 VND/PCU/km", said Mr. Pham Hoai Chung, Deputy Director of the Institute of Transport Strategy and Development.

To determine the toll rates for state-invested expressways, the drafting agency said it was based on four principles, notably ensuring that the collection rate is reasonable and in harmony with the collection rate for road use services and expressways invested in the form of public-private partnerships (PPP). In addition, the collection rate allows expressway users to share benefits with the state. Therefore, the collection rate must be lower than the benefits received by expressway users.

On that basis, there are 3 options for stipulating the collection level proposed by the agency in charge of drafting the study to apply, including a low option with the fee determined based on 50% of user benefits; a medium option with the fee determined based on 60% of user benefits; and a high option with the fee determined based on 70% of user benefits.

According to Dau Tu Newspaper, the Vietnam Road Administration has proposed choosing the high option for expressways that meet standards and criteria, and choosing the low option for expressways put into operation before January 1, 2025 that do not fully meet the regulations.

With the above collection plan, it is expected that after implementing toll collection on the expressways in operation, the collected toll amount can reach 3,210 billion VND/year; the amount paid to the state budget is 2,850 billion VND/year. This is a very valuable amount of money for the State to have more resources to carry out maintenance work on existing expressways, as well as to invest in new expressway projects.

Necessary and sufficient conditions

It is known that the issuance of the Government Decree regulating highway usage fees is only one of the necessary conditions to be able to start collecting fees on highways invested by the State.

Specifically, regarding the preparation of legal conditions for the implementation of toll collection on expressways invested by the State, in the recent past, the Ministry of Transport has proactively drafted legal documents detailing the implementation of toll collection on expressways invested by the State. Of which, there are 2 decrees proposed to be drafted according to simplified procedures (effective from October 1, 2024), including the decree on electronic payment of road traffic and the decree on toll collection for highway use.

At the same time, the Ministry of Transport has assigned agencies and units to research and develop toll collection organization plans, including establishing an Exploitation Project for infrastructure assets of expressways invested, managed and exploited by the State according to legal regulations on management and use of public assets; or an Operation and Management (O&M) franchise project according to the law on PPP investment.

It is known that the authorities are considering choosing between two forms of management, exploitation and toll collection on expressways invested by the State.

In the first form, the agency managing the highway assets, the Vietnam Road Administration, organizes the collection itself. Through bidding, the Vietnam Road Administration will select a contractor to provide toll collection services on the basis of the non-stop automatic toll collection system. This option has the disadvantage that it will not immediately create a large amount of money to create a large enough resource for investing in new highways.

The second form is to bid for highway management under an operation and management (O&M) contract. The investor will collect tolls and manage and maintain the route. The government will sell the right to collect tolls on the highway for a certain period of time and immediately collect a sum of money. This option has many advantages, but it will be difficult to attract investors on low-traffic highways.

If there is no investor participation, the State will have to take charge in the spirit of providing public service products, ensuring continuity for users.

According to Mr. Lam Van Hoang, Director of the Vietnam Expressway Administration, currently, the infrastructure items of stations and toll collection equipment systems on expressway sections owned by the entire people and directly managed and operated by the State have not been invested in to build toll station infrastructure, installed non-stop electronic toll collection systems or have not been arranged in the capital structure of component projects (for expressway sections invested by the State on the North-South expressway route).

Based on the project scale, to organize the collection of highway tolls for vehicles traveling in the 8 North-South Eastern Expressway projects invested by the State and currently in operation, it is expected that the state budget capital for investment in the construction of toll station infrastructure and equipment will be more than 1,400 billion VND.

“Therefore, to implement the collection of tolls for using expressways, the State must allocate budget funds (public investment capital, career funds for road economic activities, etc.) to invest in building station infrastructure, installing equipment, and non-stop electronic toll collection technology,” said the leader of the Vietnam Expressway Administration.

Source: https://baodautu.vn/dinh-hinh-phuong-an-thu-phi-cao-toc-do-nha-nuoc-dau-tu-d219450.html