Joint Circular No. 05/2004/TTLT-BGTVT-BTC guides the implementation of transferring the right to collect road usage fees for a limited period.

          CIRCULAR  JOINT CIRCULAR

GUIDELINES FOR IMPLEMENTING THE TRANSFER OF RIGHTS TO CHARGE FEES FOR THE USE OF ROADS WITH A SPECIFIED TERM

         using a road with a time limit

Pursuant to Resolution No. 02/2003/NQ-CP dated January 17, 2003 of the Government on certain policies and key measures that need to be focused on directing the implementation of tasks for economic and social development in 2003.

Pursuant to Decree No. 88/1999/NĐ-CP dated September 1, 1999 of the Government on the issuance of the Bidding Regulations; Decree No. 14/2000/NĐ-CP dated May 5, 2000 of the Government amending and supplementing some articles of Decree No. 88/1999/NĐ-CP; Decree No. 66/2003/NĐ-CP dated June 12, 2003 of the Government amending and supplementing some articles of the Bidding Regulations issued together with Decree No. 88/1999/NĐ-CP  dated September 1, 1999 and Decree No. 14/2000/NĐ-CP dated May 5, 2000 of the Government.

On the basis of  Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Ordinance on Fees and Charges and related documents concerning fees and charges.

The Ministry of Transport and the Ministry of Finance issue guidelines for implementing the transfer of rights to charge fees for the use of roads with a specified term and the use of revenue from the transfer of road fee collection rights as follows:

Part I

GENERAL PROVISIONS

1. Scope of application: This Circular guides the implementation of the transfer of rights to charge fees for the use of roads  with a specified term (including: roads, bridges, tunnels) which have been invested in using state budget funds or funded by state loans and repaid through fee collection, and approved by competent authorities.  The transfer of rights to charge fees for the entire route or specific sections of the road permitted to collect fees shall be implemented.

2. Revenue from the transfer of rights to charge fees for the use of roads shall be used to repay capital and interest (if the transferred road was invested in, improved, or expanded using loan funds); to invest in building, improving, expanding, repairing, and maintaining road transport infrastructure (if the transferred road was invested in, improved, or expanded using state budget funds), as approved by competent authorities.

3. Entities participating in bidding to receive the right to charge fees include state-owned enterprises, limited liability companies, joint-stock companies, partnerships, and private businesses established and operating under the Law on State-Owned Enterprises and the Enterprise Law.

4. Entities granted the right to charge fees must comply fully with current regulations on road fee collection; fulfill their obligations to pay taxes to the state budget according to the provisions of the Tax Laws and Tax Ordinances.

Part II

ARTICLES  SPECIFIC PROVISIONS

I. CONDITIONS FOR IMPLEMENTATION:

1. Roads whose rights to charge fees are being transferred are those currently organized by the state to collect fees, or have been invested in for fee collection purposes, including:  a) Roads invested in using state budget funds (central or local government budgets)

b) Roads invested in using funds originating from the state budget such as non-repayable aid, support from organizations, and individuals.

c) Roads invested in using loan funds, where the state budget repays the principal and interest, or only the principal, with the remaining interest paid from fee revenue.

d) Roads invested in using loan funds and fee revenue to repay both principal and interest.

e) Roads invested in using joint venture funds between the central and local government budgets, with fee revenue used to repay the investment.

g) Other roads managed by the state: transferred by the BOT investor after the business period, or transferred by the BOT investor when the state has settled the investment...

g) Other roads managed by the state: By the investor of the BOT transferring after the business period,  BOT transfers when the state pays back the capital...  BOT transfers when the state pays back the capital... 

2. Businesses participating in bidding to receive the right to charge fees must meet the following conditions:

a) They must be enterprises as described in Point 3 of Part I of this Circular.

b) They must have financial resources to ensure timely payment of capital upon winning the bid for the transfer of the right to charge fees.        

II. PRICES AND TERMS FOR TRANSFERRING THE RIGHT TO CHARGE FEES:

Transferring the right to charge fees for a road constructed, improved, or expanded for fee collection to repay investment costs is a form where the state collects the previously invested capital and transfers the right to charge fees for a specified term to the winning bidder.

The price for bidding to transfer the right to charge fees is the total cost of constructing, improving, upgrading, and expanding the road according to the approved final account (this does not include the cost of building toll stations). For roads already built, the bidding price is determined based on the construction unit price of similar roads at the time of transferring the right to charge fees.

The term for transferring the right to charge fees as the basis for organizing the bidding process is determined in months based on:

The total amount of state budget funds invested in the road.

The amount of fees collected in the previous year before the transfer of the right to charge fees, after deducting the costs to ensure the operation of the fee collection organization (excluding extraordinary and infrequent expenses).

The annual growth rate of motor vehicles on the road; the interest rate on the capital of the entity awarded the right to charge fees (calculated based on the one-year fixed deposit interest rate of the Vietnam Development Bank) at the time of preparing the proposal to transfer the right to charge fees.

In cases where the road has not yet started charging fees, the amount of fee revenue is determined based on:

The number of vehicles participating in traffic according to the project for constructing, improving, or expanding the road, and actual statistics of vehicle traffic when the road has been operational for at least three months to serve as the basis for the entire year.

The level of fees and the objects subject to fees as stipulated by current regulations.

The cost of organizing the collection is determined as a percentage (%) of the cost of organizing the collection compared to the station currently collecting fees with a corresponding number of vehicles participating in traffic (taking into account the specific economic and social conditions of the area).

Abolish the capital of the winning bidder for the right to collect tolls calculated at the one-year deposit interest rate of the Vietnam Development Bank at the time of drafting the proposal to grant the right to collect tolls.

The annual growth rate of the number of motor vehicles on national highways.

Example:

Route  road  National Highway A, the total state budget capital invested in construction, upgrading, renovation, and expansion has been determined  at 400 billion VND; it is expected to immediately recover the state budget investment through the form of granting the right to collect tolls.

The amount of toll revenue from the previous adjacent year (for the toll route) or based on the traffic volume of vehicles participating in traffic according to the Project, statistical data over three months, the collection rate, and the target  of collection according to current regulations (for new routes not yet implementing tolls), has been determined to be the total toll revenue in the first year at 120 billion VND.

It is expected that the annual growth rate of the number of motor vehicles on National Highway A will be 10% per year.

Operating costs for the organization collecting tolls for existing toll routes or for new routes not yet implementing tolls with corresponding traffic volumes have been determined at 5%.

The one-year deposit interest rate of the Vietnam Development Bank at the time of drafting the proposal is 8%.

Based on the above data, the method for determining the term of granting the right to collect tolls is as follows:

First Year:

Toll revenue collected is: 120 billion VND

Cost for the toll collection organization:  120 billion x 5%  =  6 billion VND

Abolish the capital of the winning bidder for the right to collect tolls:

400 billion  x  8%  =  32 billion VND

The amount of toll revenue recovered by the winning bidder in the first year is:

120 billion  -  6 billion - 32 billion  =  82 billion VND

 Second Year::

Amount  Toll revenue collected is: 120 billion  x 110%  =  132 billion VND

Cost for the toll collection organization is:  132 billion x 5%  =  6.6 billion VND

Abolish the capital of the winning bidder for the right to collect tolls:

(400 billion - 82 billion)  x  8%  =  25.44 billion VND

Amount  Toll revenue recovered by the winning bidder in the second year is:

132 billion  -  6.6 billion - 25.44 billion  =  99.96 billion VND

Third Year:

Amount  Toll revenue collected is: 132 billion  x 110%  =  145.2 billion VND

Cost for the toll collection organization:  145.2 billion x 5%  =  7.26 billion VND

Abolish the capital of the winning bidder for the right to collect tolls:

(400 billion - 82 billion - 99.96 billion)  x  8% =  17.44 billion VND

Amount  Toll revenue recovered by the winning bidder in the third year is:

145.2 billion  -  7.26 billion - 17.44 billion =  120.50 billion VND

 Fourth Year: :

Amount  Toll revenue collected is: 145.2 billion  x  110%  = 159.72 billion VND

Cost for the toll collection organization: 159.72 billion  x  5%  = 7.99 billion VND

Abolish the capital of the winning bidder for the right to collect tolls:

(400 billion  - 82 billion - 99.96 billion  - 120.5 billion) x 8% =  7.8 billion VND

Amount  Toll revenue recovered by the winning bidder in the fourth year is:

159.72 billion - 7.99 billion - 7.8 billion  = 143.93 billion VND.

The total toll revenue recovered by the winning bidder up to the fourth year is 446.03 billion VND, compared to the state budget capital invested at 400 billion VND; there is an excess of 46.03 billion VND (equivalent to about four months of toll collection period). Therefore, to allow the winning bidder to recover 400 billion VND, the toll collection period must be 3 years and 8 months (or 44 months), this is the toll collection period for tendering.

The aforementioned bid price does not include regular maintenance and periodic repair costs for the road. However, in specific cases of transferring the right to collect tolls for a limited period, the transfer price may include regular maintenance and periodic repair costs as a basis for tendering.

In cases where the right to collect tolls is not transferred for the entire route but only for part of the route, the method for determining the term of transferring the right to collect tolls also follows the above calculation principle but with the recovery price calculated based on the proportion of the capital invested in that section of the route.

Based on each route requiring the transfer of the right to collect tolls, the Ministry of Transport (Vietnam Road Administration) prepares a proposal for transferring the right to collect tolls using the above calculation method, to be submitted for approval by the Minister of Transport after obtaining written agreement from the Ministry of Finance as a basis for tendering the right to collect tolls on national highways.

Provincial Departments of Transport or Provincial Departments of Transport and Public Works (referred to collectively as Provincial Departments of Transport) prepare proposals for transferring the right to collect tolls using the above calculation method, after obtaining written agreement from the Provincial Department of Finance, to be submitted for approval by the Chairman of the People's Committee of the province or centrally-administered city, as a basis for tendering the right to collect tolls on local roads.

III. Tender Organization:

1. The Ministry of Transport selects routes to implement tendering  for the right to collect tolls for the use of highway sections on national highways. Provincial Departments of Transport select routes to organize tendering for the right to collect tolls for the use of highway sections on local roads.

After selecting the route for tendering the right to collect tolls for the use of highways, the Ministry of Transport establishes or the Provincial Department of Transport requests the People's Committee of the province or centrally-administered city to establish a Tender Board for the right to collect tolls for the use of highways. The Tender Board for the right to collect tolls for the use of highways has the following tasks:

Determine the price of the route already invested in for the right to collect tolls for the use of highways as a basis for tendering.

Determine the annual toll revenue collected and the operating costs of the toll collection organization.

Determine the traffic volume of vehicles participating in traffic annually and the annual traffic volume growth rate.   Determine the term of granting the right to collect tolls for the use of highways as a basis for organizing tendering.

Develop a tender plan.

Develop tender rules including: Standards and conditions for units participating in tendering; scoring criteria, tender participation documents...

All bases mentioned above must be submitted for approval by the Minister of Transport (for national highways) or by the Director of the Provincial Department of Transport (for local roads) for the Provincial Department of Transport to submit for approval by the Chairman of the People's Committee of the province or centrally-administered city as a basis for organizing tendering.

All bases above, the Bidding Council must submit to the Minister of Transport (for national highways) for approval or submit to the Director of the Department of Transport (for local roads) so that the Department of Transport submits to the Chairman of the Provincial People's Committee or the City People's Committee under the Central Government for approval as the basis for organizing the bidding process.

The organization of bidding for national reserve sales shall be carried out like bidding for national reserve purchases, except for the provisions at point b Clause 2 Article 12; Article 19; Clause 1, 2 Article 20; Article 21 of this Regulation.

The bidding process and procedures for announcing the winning unit to be granted the right to collect road usage fees shall be carried out in accordance with current regulations.

2. The winning unit to be granted the right to collect road usage fees is the unit that submitted the lowest bid for the shortest term of the right to collect road usage fees, approved by the Ministry of Transport (for national highways), or by the Chairman of the Provincial People's Committee (for local roads).

The duration of the winning bid for granting the right to collect road usage fees shall not exceed the time determined by the Minister of Transport.  or approved by the Chairman of the Provincial People's Committee.

If the bid duration exceeds the approved duration, a new bidding process must be organized.

3. The duration of the winning bid for granting the right to collect road usage fees may only be adjusted when the State changes the fee collection rate or redefines the fee-paying entities.

IV. Powers and responsibilities of the Ministry of Transport or the Department of Transport:

1/Organizing the bidding process and signing contracts to grant the right to collect road usage fees to the winning units; responsible for managing and using the funds collected from the transfer of the right to collect fees in accordance with the provisions set forth in Section VI, Part II of this Circular.

The contract to grant the right to collect road usage fees must comply with the provisions of the Economic Contract Ordinance, and must include the following basic contents:

The amount the winning unit must pay to the State, the initial payment period and amount, and the final payment period and amount.

The duration for collecting road usage fees, the start date of collection, and the end date of collection.

The fee collection unit must collect fees at the prescribed rates, implement exemptions according to regulations, and follow organizational collection regulations issued by the Ministry of Finance.

Term  for handing over the toll station.

Regulations on the responsibility for maintaining and repairing roads by the winning unit (in cases where they are assigned the task of regular maintenance and periodic repairs).

2- Performing state management functions, managing regular maintenance and periodic repairs on transferred road sections; or organizing inspections of regular maintenance and periodic repairs (if assigned to the winning unit to perform).

3. Handing over all existing facilities, management structures, and toll collection staff to the winning unit.

4. Cooperating with relevant agencies to conduct regular and spot checks on the organization of toll collection by the winning unit.

5. Six months before the expiration of the contract to grant the right to collect fees, the specialized transport management agency must notify the unit granted the right to collect fees in writing to prepare for handover; organize the receipt of facilities, management structures, and toll collection staff when the contract expires (in cases where staff were handed over during contract implementation).

6. In case the winning unit fails to pay the full bid amount within the stipulated time upon maturity of the payment deadline, the Vietnam Highway Administration will report to the Minister of Transport to issue a decision to suspend the grant of the right to collect fees (for national highways), or the Department of Transport will report to the Chairman of the Provincial People's Committee to issue a decision to suspend the grant of the right to collect fees (for local roads). Handling of such violations shall be in accordance with the provisions for handling economic contract violations under the Economic Contract Ordinance. After issuing the suspension decision, the Vietnam Highway Administration or the Department of Transport must organize fee collection to ensure normal operation of the toll station without waste or loss.

In special cases due to natural disasters or enemy attacks requiring the cessation of fee collection, if the winning unit is unable to fulfill the signed contract, the Vietnam Highway Administration will report to the Minister of Transport (for national highways), or the Department of Transport will report to the Chairman of the Provincial People's Committee (for local roads) for consideration and resolution after receiving opinions from the financial authorities at the same level.

V- Powers and responsibilities of the winning unit:

The winning unit receiving the right to collect road usage fees has the following powers and responsibilities:

1- Signing a contract to accept the right to collect fees: Paying the bid amount for transferring the right to collect fees on time, specifically: Paying the first installment immediately after the transfer contract becomes effective (at least 50% of the bid price) and paying the second installment (paying the remainder) six months after the first payment.

2- Organizing the implementation of fee collection activities in accordance with the signed contract; complying with current regulations related to fee collection activities, such as selling tickets at the prescribed prices, providing free use of roads, managing tickets and fee collection receipts for road usage fees... in accordance with the Ministry of Finance's regulations on the collection, submission, and management of road usage fees.

3- In cases where it is assigned to carry out regular maintenance and periodic repairs of roads, the winning unit is responsible for organizing the implementation and being subject to inspection and supervision by the state management agency for road transport.

4- Fulfilling tax obligations to the State in accordance with current regulations.

5- Receiving facilities, management structures, and toll collection staff:

The winning unit receives all existing facilities, management structures, and toll collection staff of the toll station on the assigned road section (for currently operating toll stations or receiving facilities of the toll station (for newly invested roads to collect fees)). Managing and using labor, paying wages to toll collection staff in accordance with the Labor Law and labor contracts. Managing, using, repairing, and improving assigned facilities and assets in accordance with state regulations; in cases of asset shortages or losses due to subjective reasons, compensation must be made to the State in accordance with regulations. The unit is not allowed to change the location of the toll station.

The bidding unit has the right to independently reorganize the toll collection structure for efficiency, but must ensure the rights of workers in accordance with the law.

6. Upon expiration of the contract:

a) For toll roads currently being charged, the state transfers the right to collect tolls: The successful bidder shall hand over all existing facilities, management systems, and current toll collectors to the responsible receiving agency. The maximum number of employees handed over to the receiving agency shall not exceed the number of employees previously accepted at the toll station. Any surplus employees who are not accepted (if any) shall be provided with alternative work assignments or paid severance benefits according to the law by the successful bidder if they are laid off.

b) For newly constructed or improved roads, the state transfers the right to collect tolls: The successful bidder shall hand over all existing facilities to the responsible receiving agency.

In cases where the state continues to maintain toll stations on roads whose rights to collect tolls have expired, when there is a need for recruitment, the receiving unit may enter into employment contracts with the toll collectors from the successful bidder. If the employees are not accepted for toll collection duties, the successful bidder shall be responsible for providing them with alternative work assignments or paying severance benefits according to the law if they are laid off.  for hiring labor, the receiving unit may enter into a contract with workers who have collected fees for the winning bidder. In case the worker is not accepted to collect fees, the winning bidder is responsible for arranging work for them or paying the worker's benefits (if they are laid off) according to the provisions of the law.

7. After fully repaying the bid price to the state, the unit is permitted to transfer the right to collect tolls to other enterprises, following written agreement by the Ministry of Transport (for national highways) or the Department of Transport (for local roads). The entity receiving the transfer shall be responsible for fulfilling all conditions stipulated in the contract signed by the transferring entity with the specialized transport management authority.

VI. Management and Use of Revenue from the Transfer of Toll Collection Rights:

1. Revenue from the transfer of toll collection rights shall be used:

1. Supplementing Point 6a following Article 6 of Circular No. 02/2019/TT-BVHTTDL dated July 5, 2019 of the Minister of Culture, Sports and Tourism on the procedures for legal expertise regarding copyright and related rights as follows:  For  roads funded through loans and toll revenue for repayment of principal and interest: The collected funds shall be used to repay the principal and interest; any remaining amount shall be deposited into the account of the Vietnam Highway Administration (for national highways) or the account of the Department of Transport (for local roads)  for investment, improvement, maintenance, repair, upgrading, and expansion of highway sections according to plans approved by competent authorities after consultation with the financial department at the same level.

In cases where the collected funds are insufficient to repay the principal and interest, the remaining debt shall   be repaid using the proceeds from subsequent bidding rounds (in cases where the road is continued to be tendered in later stages) or from toll revenue collected after the contract expires.

b. For roads funded through loans, with the state budget repaying the principal and toll revenue repaying the interest: The collected funds shall be used to repay the interest; any remaining amount shall be deposited into the account of the Vietnam Highway Administration (for national highways) or the account of the Department of Transport (for local roads) for partial repayment of the principal investment or improvement, maintenance, repair, upgrading, and expansion of highway sections according to plans approved by competent authorities after consultation with the financial department at the same level.

c. For roads funded through the central and local government budgets, with toll revenue repaying the investment capital: The collected funds shall be returned to each level of the budget according to the amount contributed to the investment. Any remaining amount (if any) shall be deposited into the account of the Vietnam Highway Administration (for national highways) or the account of the Department of Transport (for local roads) for investment, improvement, maintenance, repair, upgrading, and expansion of highway sections according to plans approved by competent authorities after consultation with the financial department at the same level.

In cases where the collected funds are insufficient to repay the invested capital, the remaining investment capital shall be repaid using the proceeds from subsequent bidding rounds (in cases where the road is continued to be tendered in later stages)  or from toll revenue collected after the contract expires.

d. For roads funded through the state budget or derived from the state budget: The collected funds shall be deposited into the account of the Vietnam Highway Administration (for national highways) or the account of the Department of Transport (for local roads)  for investment, improvement, upgrading, expansion, and repair of highway sections according to plans approved by competent authorities after consultation with the financial department at the same level. .

2. The management, allocation, and settlement of expenses from the revenue source of transferring toll collection rights for highway use shall be carried out in accordance with current regulations.

Part III

IMPLEMENTATION

1. The Ministry of Transport and the Departments of Transport shall select certain road sections to pilot the tendering process for granting the right to collect tolls for highway use with a specified term in accordance with this Circular to gather experience as a basis for expanding implementation to other road sections.

2. This Circular shall take effect fifteen days after its publication in the Official Gazette.  This takes effect fifteen days after its publication in the Official Gazette.

3. During the implementation period, if any issues arise, units are advised to report them to the Ministry of Transport and the Ministry of Finance for review and appropriate amendments.