Plan to relocate 6,500 houses along canals in Ho Chi Minh City at risk of 'bankruptcy'

At the beginning of its term, Ho Chi Minh City set a goal of relocating 6,500 houses along and on canals, but after 3 years, only 700 houses have been relocated, making the plan almost impossible to complete.

"The process of relocating houses on and along canals in the city is too slow," said Dr. Nguyen Huu Nguyen, Ho Chi Minh City Urban Planning and Development Association, at a scientific seminar on the program of relocating houses on and along canals in the city on the afternoon of November 13.

According to the urban development and renovation plan in Ho Chi Minh City for the period 2021-2025, the city aims to complete compensation and relocation of 6,500 houses on and along canals, with a total capital demand of more than 19,000 billion VND. This goal is to solve drainage, improve the environment and urban renovation. However, so far the city has only compensated and relocated nearly 700 houses, reaching more than 10%.

Dr. Nguyen Huu Nguyen, Ho Chi Minh City Urban Planning and Development Association, spoke at the workshop on the afternoon of November 13. Photo: Gia Minh

Mr. Nguyen assessed that not only this term but also the 2016-2020 period, Ho Chi Minh City also proposed a program to relocate 20,000 houses, then adjusted the target to about 10,000 houses. However, the result was only nearly 2,500 houses. "Financial problems are the biggest obstacle to the plan to relocate houses on and along canals in Ho Chi Minh City," Mr. Nguyen said.

According to this expert, the city budget is limited, while attracting capital from the private sector is very difficult because the profits are not attractive to investors. In addition, the relocation process is stuck in the procedural stage because most houses on the canals do not have permits or papers to determine the area as a basis for compensation and resettlement. Not to mention the habits and livelihood needs of people living on the canals have existed for many years, so it is very difficult to persuade them to leave if the new place is not as good as the old place.

To speed up the relocation of houses along the canals, Mr. Nguyen suggested dividing the projects into smaller ones to make them easier to complete, instead of setting too large a target. Accordingly, the city can gradually do each canal, or each section. In addition, the city can also study the plan to allow businesses to use part of the cleared land along the canals instead of having to pay for everything in cash.

Kenh Doi, District 8 - where Ho Chi Minh City is planning to relocate houses on both sides. Photo : Quynh Tran

Sharing the same view, Master Vuong Quoc Trung (Center for Urban Research and Development of Ho Chi Minh City) also said that the source of capital for resettlement for people is one of the biggest difficulties when relocating houses on and along canals. Although the city has made great efforts to clear the land, the results are still limited due to resource constraints.

"To relocate thousands of households and build resettlement areas requires a huge amount of capital, which the budget cannot meet," said Mr. Trung, citing the need to clear 2,600 temporary houses along the South bank of the Doi Canal and build embankments, which requires about VND9,000 billion. On the North bank of the Doi Canal, nearly VND2,600 billion is also needed to relocate about 1,017 dilapidated houses.

Therefore, according to Mr. Trung, to have money to relocate houses along the canals, the city should diversify its sources from the Central Government, investors, loans from financial institutions... Ho Chi Minh City also needs to encourage businesses to participate in the project of relocating houses along the canals through the form of public-private partnerships. In which, investors can contribute capital to the project and earn profits through developing new resettlement areas after relocation...

Nhieu Loc - Thi Nghe Canal after being renovated, houses on both sides were relocated. Photo: Quynh Tran

Meanwhile, Dr. Du Phuoc Tan (HCMC Institute for Development Studies) said that the relocation of houses on and along canals for urban beautification in the city from 1993 to 2020 went through 5 phases with more than 38,000 houses relocated. From 1993 to 2005 was the most successful phase when the results exceeded the target. Later, the relocation was delayed after the city gradually shifted from budget to external capital mobilization. The projects had difficulty attracting investment because of the large costs while the ability to recover was difficult.

According to Mr. Tan, the current special mechanisms in Resolution 98 open up many opportunities for Ho Chi Minh City to mobilize investment capital. Therefore, the city should take advantage of time and opportunities, flexibly apply financial, budgetary, and revenue mechanisms to speed up the progress of relocation and clearance of houses along canals.

At the workshop, Mr. Pham Binh An, Deputy Director of the Ho Chi Minh City Institute for Development Studies, said that urban development and renovation is one of the city's breakthroughs. The Institute will synthesize the opinions of experts and advise the city government to promptly remove obstacles in the relocation process to create and improve urban space.

Gia Minh

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