'HCMC has money to build 200 km of metro, just needs implementation mechanism'

Spending a few billion USD each year on the metro is not a big problem for the city budget, the important thing is to have a financial mechanism to implement it, according to the Chairman of Ho Chi Minh City.

"We are not asking the Central Government for tens of thousands of billions or hundreds of billions of dong to build the metro, but only asking for a financial mechanism for the city to implement it," said Chairman of the Ho Chi Minh City People's Committee Phan Van Mai at a meeting of the Advisory Group on the construction and development of the city's urban railway system on February 16.

Chairman of Ho Chi Minh City People's Committee Phan Van Mai, at the conference on February 16. Photo: Le Tuyet — Chairman of Ho Chi Minh City People's Committee Phan Van Mai, at the conference on February 16. Photo: *Le Tuyet*

Ho Chi Minh City is planning 8 metro lines and three tram lines (monorail) with a total length of about 220 km, with an estimated investment capital of nearly 25 billion USD. Currently, lines 1 (Ben Thanh - Suoi Tien) and 2 (Ben Thanh - Tham Luong) with a total length of more than 30 km have been deployed from ODA capital under the allocation mechanism from the central budget. The remaining lines have not been invested yet.

According to Conclusion 49 of the Politburo, by 2035, Ho Chi Minh City must complete more than 200 km of urban railway, which is less than 12 years of implementation. To carry out this task, the city has established a Consulting Group and researched a project to develop an urban railway system. It is expected that in the first quarter, the project will be completed and submitted to the Central Government.

According to Mr. Mai, Ho Chi Minh City's public investment in 2024 alone is nearly 4 billion USD. In previous years, capital for transport projects accounted for 70%. Therefore, each year the city spends a few billion USD on key projects such as the metro, which is not "too heavy on the city budget".

"The 200 km metro needs tens of billions of USD to complete, but it cannot be done immediately, but rather divided into a few billion each year. The problem is the cash flow plan, sources, and capital mobilization mechanism for annual allocation. That is the city's request for financial mechanism," said Mr. Mai.

Sharing the same view, Prof. Dr. Nguyen Trong Hoai said that in order to implement 200 km of metro in the next 12 years, the TOD development mechanism (urban development model associated with public transport) and the capital mobilization mechanism are two key and leading mechanisms. Ho Chi Minh City also needs to further study the metro operation technology transfer mechanism because implementing this project is not only in the construction phase but also in the later operation phase.

Metro Line 1's second test run, from Suoi Tien Station to An Phu Station, April 26. Photo: Thanh Tung — Metro Line 1's second test run, from Suoi Tien Station to An Phu Station, April 26. Photo: *Thanh Tung*

In the urban railway system development project, Ho Chi Minh City proposed to the Central Government 14 mechanisms, including some contents to help the city mobilize capital to build 200 km of metro. Specifically, Ho Chi Minh City and Hanoi are allowed to recover land for the overall urban railway system project and the urban development project in the vicinity of stations to implement the TOD model immediately after the project investment policy is decided by the National Assembly.

At the same time, the locality is allowed to auction land use rights for the purpose of developing the TOD urban area project according to the detailed planning scale of 1/500 and use all the proceeds to directly invest in the urban railway project. It is expected that Ho Chi Minh City will collect 40 billion USD from this source and a part will be used to invest in the metro.

The city also proposed that the Central Government allow the issuance of local government bonds, construction bonds or other forms of capital mobilization that are not subject to the public debt ceiling... to invest in the metro network. The bond interest rate is decided by the two localities themselves, guaranteed on the basis of debt repayment capacity.

At the conference, experts also said that looking at the 20 km metro line No. 1 Ben Thanh - Suoi Tien that has not been operational for more than 15 years, the "ambition" to complete 200 km in less than 12 years will be a difficult task to accomplish without a new approach.

"There needs to be a breakthrough mindset and a different approach to current practices," said architect Ngo Viet Nam Son. Experts believe that there needs to be a multidisciplinary team with many issues beyond the scope of the Ho Chi Minh City Urban Railway Management Board, such as planning, compensation and site clearance, etc. Therefore, the city needs to establish an urban railway and TOD corporation.

This group is like a joint stock company, the departments, agencies and branches are the first shareholders. In addition, Ho Chi Minh City should have a TOD project implementation board because Resolution 98 has given the authority and the Central Government supports the city to implement this approach.

Le Tuyet

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