How to develop TOD when building high-speed railway?

High-speed rail is expected to generate about $22 billion in services, advertising, and land in transit-oriented development (TOD) areas. However, there is still a lot of work to be done to turn expectations into reality.

Exploiting land fund, opening new development space

The high-speed railway project (HSR) has just been submitted to the National Assembly for consideration and approval of the investment policy. With a total investment of more than 67 billion USD, the project is also expected to bring great benefits, opening up new development space and new resources through effective exploitation of land funds.

The service is thriving around Wok Wok Hakaniemi station on the Helsinki Metro system (Finland).

Mr. Chu Van Tuan, Deputy Director of the Railway Project Management Board (Ministry of Transport), said that revenue from land exploitation in TOD areas and commercial exploitation of the high-speed railway could reach about 22 billion USD. Of which, revenue from services and advertising is about 5 billion USD; from land fund is about 17 billion USD.

To develop TOD, each passenger station location will have a planned surrounding area of ​​200 - 500 hectares depending on the location, including 3 functional areas: the area directly serving passenger pick-up and drop-off, square, parking lot with an area of ​​6 - 8 hectares; service and commercial area with an area of ​​10 - 15 hectares; urban service area with an area of ​​250 - 300 hectares.

Experience from other countries shows that in most cities, land and property values ​​along public transport corridors will increase.

According to Mr. Tran Thien Canh, Director of the Vietnam Railway Authority, at Helsinki Metro (Finland), real estate within walking distance of a railway station is 7.5% more valuable than other areas, and the best locations can increase by 11%. In Japan, in cities with train stations, land values ​​increase by 67% compared to other places.

In China, after the 1,318km long Beijing-Shanghai railway line with a speed of 380km/h was put into operation in 2011, land values ​​in the project areas increased by 13%. After only 10 years of putting the Beijing-Shanghai line into operation, the GRDP of localities along the line doubled.

Many people still misunderstand TOD.

Regarding the orientation of exploiting benefits from the TOD model, Mr. Chu Van Tuan said that in the planned station land area and surrounding areas, the State will directly invest to serve the railway operation function.

After 10 years of putting the Beijing - Shanghai route into operation, GRDP of localities along the route doubled.

The planning of urban development zones and commercial centers will be assigned to localities to implement using local budgets or socialized funds.

To reduce the burden on the central budget, the Government also proposed that the National Assembly consider a special mechanism: For the amount of money collected from exploiting land funds in the vicinity of high-speed railway stations, after deducting related costs, the locality is allowed to retain 50% and pay 50% to the central budget to balance the state budget for investment in the project, instead of the locality being allowed to keep 100% according to current regulations.

Revenue from exploitation and development of land fund in the vicinity of the station (mainly for urban development) is socio-economic efficiency, not included in the financial efficiency of the project. With the land fund in the vicinity, TOD can be developed and investment resources can come from the private sector or public-private partnership (PPP).

The effectiveness of this land fund development must be calculated into economic growth. Once the project is approved in principle, the work begins, and the budget will have to be spent. But at the same time, the implementing units and enterprises will have income, will have to pay taxes, and the budget will have revenue.

Later, when urban, commercial and service areas develop, tax revenue will increase.

Mr. Nguyen Van Phuc, former Deputy Chairman of the National Assembly Economic Committee

"TOD revenue will not be included in project investment capital. In other words, this is not a source to offset the more than 67 billion USD of investment capital but a channel to generate revenue for the State budget. This payment will be merged into the Central budget. The allocation and subsequent use for what work will be decided by the State," Mr. Tuan informed.

Directly participating in the working groups to learn about the high-speed railway of the Ministry of Transport, Director of the Railway Department Tran Thien Canh said that the revenue from the land fund along the high-speed railway route will not be used to reinvest in the project but will be used for other projects.

According to international experience, when the project is established, the land fund along the route has not been formed yet, so it is impossible to determine how much of the land fund can be exploited to compensate for the budget spent on route investment. TOD revenue will gradually be formed during the implementation process or after the project is put into operation.

According to Mr. Nguyen Ngoc Dong, former Deputy Minister of Transport, revenue from TOD is future revenue and cannot be collected immediately.

"Currently, many people misunderstand that developing TOD will have enough money to build railways. In fact, we have to build railways first and then expect other projects and models to have the premise to develop. Waiting for money from TOD is not known when," Mr. Dong acknowledged.

Early research on legal corridor for land acquisition and compensation

According to Mr. Nguyen Ngoc Dong, for the TOD model to achieve its expectations, special attention should be paid to the planning of the land around the station. For example, how large should the TOD development area be, and how many meters should the development range be within a radius from the station to be attractive?

Regarding land acquisition and clearance for TOD development, authorities need to soon study mechanisms, policies, and legal corridors for negotiations with people.

Mr. Chu Van Tuan said that the pre-feasibility study report proposed a series of specific mechanisms, assigning authority to the provincial People's Committee to proactively implement contents related to urban planning adjustments.

Specifically, the provincial People's Committee is allowed to locally adjust the construction planning in the areas surrounding the high-speed railway station, the route, scale, and location of the station when necessary without having to carry out the procedure for locally adjusting the previously approved construction planning project at a higher level.

For station areas and surrounding areas that do not have a construction plan approved by competent authorities, the Provincial People's Committee shall establish zoning plans or detailed plans to implement the project and update the adjusted content into higher-level plans in the next planning review period.

In the vicinity of the station, the provincial People's Committee is authorized to decide on planning, architecture, technical infrastructure, social infrastructure, space and land use requirements other than those specified in national technical regulations, in accordance with previously approved provincial planning.

Source: https://www.baogiaothong.vn/phat-trien-tod-the-nao-khi-lam-duong-sat-toc-do-cao-192241125210014282.htm