What is a BOT contract? Toll rates for vehicles passing through BOT stations in Vietnam

Hello, Lawnet would like to answer as follows:

1. What is a BOT contract?

What does BOT stand for?

BOT stands for Build - Operate - Transfer

According to the provisions of Clause 1, Article 45 of the Law on Investment by Public-Private Partnership 2020, BOT contract is as follows:

- The group of project contracts applying the mechanism for direct collection of fees from users or underwriting for public products and services, including:

+ BOT contract means the contract under which a PPP project investor or enterprise is assigned the right to build and operate infrastructure works and systems within a predetermined term; upon expiry of such term, the PPP project investor or enterprise transfers these works or systems to the State;

+ BTO contract means the contract under which a PPP project investor or enterprise is assigned the right to build infrastructure works and systems; after the construction is complete, the PPP project investor or enterprise transfers these works or systems to the State, and is accorded the right to operate these works or systems within a specified period of time;

….

At the same time, PPP project contract means a written agreement between a contracting authority and a PPP project investor or enterprise on the State's concession to that investor or PPP project enterprise to execute a PPP project according to provisions of Law on Investment by Public-Private Partnership 2022.

Thus, a BOT (Build - Operate - Transfer) contract is a type of PPP contract, whereby the State grants rights to investors to build, do business, and operate infrastructure projects for a certain period of time. After that deadline, the investor will transfer the project to the State.

2. Toll rates for vehicles passing through BOT stations in Vietnam

BOT stations can be understood as road toll stations located on roads under BOT projects. The purpose of using these stations is to pay, upgrade, repair, and maintain traffic routes so that project investors can recover capital and profits.

The toll rates for vehicles passing through BOT stations are specifically specified in the Appendix issued with Circular 70/2021/TT-BTC as follows:

- Rate of fee (excluding those defined in Point 2 and Point 3 below)

+ The fee rate for 01 month from the 2nd year (from the 13th month to 24th month after inspection and fee payment) is 92% of the fee rate for 01 month in the schedule.

+ The fee rate for 01 month from the 3rd year (from the 25th month to 30th month after inspection and fee payment) is 85% of the fee rate for 01 month in the schedule.

+ The duration for which the fee is paid according to the schedule starts upon vehicle registration and does not include the duration of the previous inspection interval.  In the event that the vehicle owner has not paid the fee for the previous interval, the additional payment for the previous interval is required; thus, the amount payable + 1 month’s rate x quantity of fee-levied months of the previous interval.

+ The gross weight is  the overall weight permissible for traffic as shown on the vehicle’s certificate of inspection.

- Rate of fee on national defense vehicles

- Rate of fee on police vehicles

3. Forms and methods of road toll collection in Vietnam

- There are two forms of road toll collection, electronic toll collection (ETC) and manual toll collection (MTC).

+ ETC is an automatic road toll collection form, road vehicles do not have to stop to pay the toll when passing through toll booths;

+ MTC is the form of road toll collection where road vehicles have to stop one time when passing through the lane control entrance of a toll booth to pay the road toll;

- There are two methods of road toll collection, open and closed methods.

+ An open method is a method where the vehicle owner has to pay a toll according to the type of vehicle at the toll booth instead of the distance traveled;

+ A closed method is a method where the vehicle owner has to pay a toll according to the type of the vehicle and the distance traveled on a road that is subject to road tolls at the toll booth.

- Highway sections; consecutive highway sections; highways; consecutive highways are organized as a closed collection system.

- Mixed-used toll lane (applying both ETC and MTC) at a toll booth is arranged as per regulation prescribed in Points a, b Clause 3 Article 5 of Decision No. 19/2020/QD-TTg.

- Competent authorities shall decide the form and method of road toll collection in the study report on the feasibility of the investment project or the project on the utilization of assets and infrastructure of road traffic.

(Pursuant to Circular 45/2021/TT-BGTVT)

Best regards!

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