Minister of Transport Tran Hong Minh has just signed on behalf of the Government to submit to the National Assembly a draft resolution on special mechanisms and policies for developing urban rail systems in Hanoi and Ho Chi Minh City.
These proposals outline special mechanisms and policies for the two largest cities in the country to complete hundreds of kilometers of urban rail lines over the next decade. These special policies are not covered by existing laws or differ from current regulations, necessitating a resolution from the National Assembly to formalize them.
Urban rail planning for Ho Chi Minh City with 355km of metro prioritized for investment until 2035 (Illustration: Khương Hiền).
The submitted proposal outlines six key mechanisms that need to be formalized: (1) capital mobilization; (2) investment procedures and processes; (3) urban development following the TOD (Transit-Oriented Development) model, which focuses on public transportation-oriented urban growth; (4) railway industry development, technology transfer, and workforce training; (5) construction material policies; (6) specific regulations applicable only to Ho Chi Minh City.
The sixth group of mechanisms is specifically tailored for Ho Chi Minh City because the 2024 Capital Law has already addressed many regulatory issues for Hanoi.
Some special mechanisms proposed for Ho Chi Minh City include: within the TOD areas, the People’s Committee of Ho Chi Minh City will retain and use 100% of additional land value revenues; the city can borrow through local government bond issuance, domestic financial institutions, and loan repayments from the central government…
This is not the first time the Government has proposed special mechanisms to accelerate infrastructure development. A previous successful example was when the National Assembly approved a series of special mechanisms to expedite the North-South Expressway projects during the 2017-2020 and 2021-2025 periods.
Ho Chi Minh City needs to urgently implement subsequent metro projects after the inauguration of metro Line 1 (Photo: Nam Anh).
The Government notes that over 200 cities worldwide have built urban rail systems. Cities with around 5 million inhabitants and an average income of approximately $6,000 per capita per year are recommended to invest in metro systems to reduce traffic congestion, pollution, and accidents.
In 2023, Hanoi’s population is about 8.5 million people, with an average income of $5,900 per capita per year. Similarly, Ho Chi Minh City has around 9.5 million people and an average income of $6,700 per capita per year. Therefore, accelerating the progress and simultaneous investment in urban rail systems for these two cities at this time is appropriate.
Urban rail systems in Hanoi and Ho Chi Minh City began construction in 2007. However, the implementation has been slow and failed to meet transportation demands. The process faced numerous challenges and regulatory issues, particularly regarding investment procedures, resource mobilization, and project execution.
Recently, both cities have completed revised master plans for urban rail development, including changes in the number of projects, route directions, and TOD development strategies, as well as proposing special policies based on lessons learned from past delays and inefficiencies in metro projects.
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