Clogging the economy’s veins

Objection is widespread to plans proposed by the Vietnam Road Administration to impose road fees in an effort to have sufficient capital for the Road Maintenance Fund, though all agree that repairing and upgrading the road system is imperative.

In one of its three tentative plans submitted to the Government, the Road Administration calls for collecting annual fees from all means of transport, plus imposing a new surcharge on fuels consumed, while the balance will be allocated from the State Budget so as to ensure an annual budget of VND12.2 trillion for the fund. The proposed plan has met strong protests.

As covered on local media these days, the plan aggravates the already-rampant financial burden shouldered by the people, who find themselves surrounded by numerous toll-fee stations, who have paid fuel surcharges over the past many years, and who have paid other taxes as well, only to see their basic right to traveling still heavily restricted. As communication and transport is often referred to as the veins of the economy, the proposed fee collection plan may not serve its aim, but cause clogs to the veins.

In its plan, the Road Administration seeks to collect VND1,000 from each liter of gasoline sold and VND330 from each liter of diesel oil, according to Tuoi Tre. This surcharge will help the Road Administration collect nearly VND5 trillion a year, plus VND4.5 trillion to be collected directly from vehicle owners who have to pay nearly VND2.2 million for a sedan or a light truck and some VND17 million for a container truck. Toll fee stations – except those erected by Build-Operate-Transfer (BOT) project owners – will be cleared away, according to the Road Administration.

Experts say the fuel surcharge will lead to overlapping fees for road users, who have already suffered from BOT toll-fee stations, according to Dan Tri. Nguyen Quang Toan, former dean of the Road Faculty of Hanoi Transport College, is quoted by the online paper as ascertaining that “there are no overlapping fees in other countries, and all schemes for collecting road fees are transparent.”

In fact, the Government has been collecting the fuel surcharge at VND1,000 a liter of gasoline for many years now, so a new fuel surcharge is unacceptable, says Toan.

Thai Van Chung, general secretary of the HCMC Transport Association, raises an even sharper tongue against the plan, saying that imposing overlapping fees is the violation of the law regarding the provision of the same service.

Chung criticizes the plan on Tuoi Tre, saying that transparency in using road fees is a big problem, as transporters having paid different fees still do not know how much has been collected and how the fund is spent. Transparency is also a problem in the new plan itself, as the Road Administration does not mention if the current fuel surcharge being collected now will be scrapped or not.

Nguyen Vo Lieu, former general secretary of Vietnam Automobile Transport Association, says on Tuoi Tre the State cannot simply increase collection to meet its capital need. “If they run short of funds, they should consider how to mobilize funds, rather than immediately thinking of imposing more charges and fees on the people,” Lieu is quoted by the paper.

Local media also blasts the collection plan as unfair, when collecting the fee from all fuel consumers, be it a vehicle owner or a farmer.

It is quite illogical when people without vehicles have to pay the fuel surcharge, such as fishing boat owners or farmers operating farming machines on the field, says Dan Tri.

Do Van Dung, vice rector of the HCMC Technical Pedagogy University, points out that the surcharge should not be evenly collected from all vehicles. “Those that damage the infrastructure more must pay more,” says Dung on Tin Tuc. His opinion is echoed by Do Kien Quoc of the HCMC Polytechnic College, who says heavy-duty trucks are killers of infrastructure.

Meanwhile, Nguyen Ngoc Lu, former vice chair of the HCMC Transport Society, suggests that before planning the collection, the Road Administration should survey reasons behind the deterioration of roads. The collection plan, if not equitably enforced, will not help protect transport infrastructure, says Nguyen Ngoc Lu, former vice chair of the HCMC Transport Society.

“Higher fees will encourage trucks to carry cargo volumes exceeding the permitted level to make up for the higher costs, and road deterioration will be quicker,” says Lu.

Deputy Minister of Transport Nguyen Ngoc Dong, who also serves as Head of the Road Administration, says the plan will be submitted to the Government this month, and if approved, collections will start from July 1 next year, according to Tien Phong.

It is apparent that the Road Administration is in dire need of capital to repair and maintain the country’s road system, but if the burden is simply passed over to all the road users, the plan may backlash.

Higher financial obligations will cut into the competitiveness of the transport industry, says Thai Van Chung of the HCMC Transport Association. He explains on Tuoi Tre that transport fees now account for 16% of the total transport costs, so if the fuel surcharge is imposed, the fees will account for 22% of the total costs, a heavy burden for transporters.

Source: SGT

Tags: Vietnam transportation