Lack of capital, lack of policy
Currently, Ho Chi Minh City still has a large number of houses on and along canals. Many of these houses are dilapidated, unsanitary, and do not ensure living conditions or environmental safety. It is worth mentioning that this is where many families of 3-4 generations live crowded together.
Mr. Nguyen Van Tam, 34 years old, living in the area of Xang Canal Bridge, District 8, said that life along the canal is very inconvenient. Environmental sanitation conditions are not guaranteed, and the surrounding waste poses a potential risk of disease. On the other hand, every time there is heavy rain or high tide, water floods into the house, causing damage to furniture, easily spreading pathogens and affecting daily life.
According to the report of the Department of Construction of Ho Chi Minh City, the city has 5 main canals with a length of more than 105 km within the inner city, solving the drainage problem for an area of 14,200 hectares. However, this system is increasingly narrowing and polluted. To improve the urban environment, since 1993, Ho Chi Minh City has been relocating houses along and on canals, but the relocation process is still very slow.
The total number of houses on and along canals is up to more than 65,000 (statistics from 1993 to present). In general, the implementation stages of the program to clear, relocate, and resettle houses on and along canals have all achieved quite low targets (below 50%).
Specifically, in the period from 1993 to 2020, Ho Chi Minh City has only relocated more than 38,185 out of a total of more than 65,000 houses that need to be relocated; in the period from 2021 to 2025, Ho Chi Minh City has only relocated 2,867 houses out of a total target of 6,500 houses.
The main reason for the slow relocation of houses along and on canals is the difficulty in capital investment. Up to now, only 5/14 projects have continued to be allocated capital for compensation and resettlement. Meanwhile, projects to relocate houses on and along canals are proposed to be in the list of key projects that need urgent investment, but compared to other infrastructure projects, they are not selected as urgent and top priority.
On the other hand, projects are still stuck in administrative procedures, site clearance... such as the U Cay canal renovation project invested by Saigon Real Estate Corporation (Resco) under the BT form since 2009. The company has completed phase 1 (clearing houses on the canal).
In 2015, Resco continued to implement phase 2, which was to clear houses along the canal. However, the 2013 Land Law took effect, leading to some problems. This led to the project being slow in handing over land to investors, investors being slow in recovering capital, and now the project is "frozen".
The relocation of houses along canals in Ho Chi Minh City is not as effective as planned.
Mr. Ly Thanh Long, Chief of Office of the Department of Construction of Ho Chi Minh City, said that with this situation, it is expected that by the end of 2025, only 4,250 houses will be compensated and relocated, reaching 65% of the set target.
The reason for the delay is that since 2020, the Law on Investment in the form of public-private partnership (PPP) has no longer stipulated the form of build-transfer contracts. Investors are no longer paid with land funds, but can only exploit and do business on the land area after relocating houses on and along the canals, so it is not attractive in attracting investment.
Meanwhile, investment using state budget capital also faces difficulties in capital allocation. Although projects to relocate houses on and along canals have been proposed by the Department of Construction as being in the list of key and urgent projects, they have not been selected as urgent and priority projects like other projects.
In addition, the compensation, support and resettlement policies for households are not simple. Especially when most houses and lands have complicated legal status, no land use rights, and houses encroach on part of the corridor land and part of the canal water surface.
Resolutely relocate and renovate planning
Relocating houses along canals is being implemented by Ho Chi Minh City with the goal of not only ensuring the safety of thousands of households living along canals today, but also being one of 7 breakthrough programs of Ho Chi Minh City aiming to create a clean, civilized urban space.
According to Dr. Du Phuoc Tan, an expert from the Ho Chi Minh City Institute for Development Studies, the Ho Chi Minh City People's Committee is determined to pursue the goal of relocating 6,500 houses along the canal with a budget of over VND19,000 billion. However, after calculating the feasibility, the Department of Construction estimates that it will only achieve 41% of this in the 2021-2025 period.
“The two biggest difficulties in relocating houses on and along the canals at present are preparing a clearance plan and arranging funds for resettlement for the people. In implementation, there are also difficulties with compensation costs. Funding is trickling down every year, making it difficult to quickly handle progress,” said Dr. Du Phuoc Tan.
Giving suggestions for solutions, experts said that through Resolution 98 recently issued by the National Assembly, Ho Chi Minh City can take advantage of 3 opening points to exploit. Firstly, in the regulations on investment management, it is allowed to use the budget to implement compensation and resettlement for households along canals. Secondly, in the regulations on finance and state budget, Ho Chi Minh City budget is entitled to 100% of the increased revenue from revenues due to the adjustment of fee and charge policies.
The final point, according to Mr. Tan, in Clause 3, Article 6 of Resolution 98, Ho Chi Minh City has the right to exchange other land to build social housing, or use the exchange money and fulfill financial obligations regarding land for the exchanged land fund in the commercial housing project.
Meanwhile, Dr. Nguyen Huu Nguyen, Vietnam Urban Planning and Development Association, acknowledged that the process of relocating houses along canals in Ho Chi Minh City is currently very slow. Experts believe that the most important bottleneck at present is the financial issue. However, the city has only mentioned solving the problem of public or private capital, calling for capital but has not specified how much money can be mobilized.
To be more practical, Mr. Nguyen suggested that the city could divide the projects into smaller parts and implement them one by one. When seeing the results, no matter how small, it will create excitement for the people's psychology. People will have a more sympathetic view and want to try to contribute to a better society. From there, the recovery and compensation work will also be more favorable.
Sharing the same view, Master Vuong Quoc Trung, Center for Urban Research and Development of Ho Chi Minh City also said that capital is the most difficult problem when relocating houses on and along canals at present. To solve this problem, the city needs to encourage businesses and investors to participate, diversify financial sources through the PPP method. In addition, it is necessary to build a flexible mechanism, apply the specific mechanism in Resolution 98; reform complicated legal procedures.
On the other hand, Ho Chi Minh City should create conditions for businesses to invest in potential real estate when participating in the project of relocating houses along the canal. The government also needs to create conditions for people to access new resources such as jobs, services and utilities in the new area.
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