By 2035, Ho Chi Minh City must complete its network of 8 metro lines.
Building a metro line takes 12-15 years.
According to MAUR, the goal of completing 220 km of urban railway in the next 12 years is a huge challenge for Ho Chi Minh City.
Firstly, regarding urban planning, the city's population (including immigrants) is currently increasing, leading to significant changes compared to the time of the study for Decision No. 568/QD-TTg. Furthermore, some districts and counties outside the city center are undergoing urbanization, and many industrial zones are receiving substantial investment, but lack cohesion or a synchronized and unified development plan across different sectors and fields.
Furthermore, the current planning scope for urban railway lines is limited to route planning and station locations, and is not integrated with the development of urban areas along the route (TOD). Therefore, it does not ensure synchronization between railway development and urban development.
Regarding land acquisition and site clearance, urban railway development projects are funded by the state but do not generate added value from the development of the urban railway. These projects are often nationally important, built along a line, with large investment capital and long implementation periods. Land acquisition and site clearance for these projects are very time-consuming and costly due to the increasing land prices at the project site and surrounding areas after planning.
Financial resources also present a significant challenge, as current plans estimate the capital needed for the urban railway system at approximately 25-30 billion USD. Currently, two urban railway lines in Ho Chi Minh City are being implemented using ODA funding. Vietnam is no longer classified as a low-income developing country and has joined the group of middle-income developing countries, leading to foreign loans having fewer concessional elements and being more commercially oriented.
The total outstanding debt of the city shall not exceed 120% of the city's allocated budget revenue. The city is not allowed to directly borrow foreign capital but must borrow from foreign capital sources that the Government has lent to the city.
Most importantly, the current regulations are overly complex. The investment preparation process for a single urban railway project, usually a single line, is crucial because of its large total investment capital, making it a nationally important project requiring numerous steps. The total implementation time averages 12-15 years per line. Due to the lengthy investment preparation procedures, the lack of synchronized investment and operation across lines reduces the overall efficiency of the urban railway network. This prolonged project implementation wastes resources, reduces investment efficiency, and creates negative public opinion…
Furthermore, urban railway projects currently under investment and construction employ various technologies. These technical and technological differences significantly impact investment, construction, and operation, leading to unavoidable consequences and shortcomings. For example, variations in tunnel and carriage sizes prevent trains from connecting to other lines; procurement of spare parts for replacement and maintenance is difficult, with low purchase volumes resulting in higher costs; and differences in ticketing technology and payment methods reduce convenience and appeal to passengers.
Currently, the domestic railway industry mainly serves the national railway system on a small scale, with outdated technology that fails to meet the requirements for mastering the technology needed to supply materials and spare parts for the maintenance and repair of modern urban railway lines.
"Furthermore, the simultaneous construction of all urban railway lines will severely impact traffic and the economy of Ho Chi Minh City (underground construction, setting up barriers for surface construction, etc.); the organizational model, project management, and human resource training will also face many difficulties," the MAUR report stated.
Engineers with specialized vehicles are inspecting the electrical system for the metro train before commissioning the Ben Thanh underground station.
How can we shorten the time by 3-4 times?
To ensure the objectives are met, MAUR proposes a special mechanism allowing Ho Chi Minh City to carry out land acquisition immediately after the detailed plan is approved, and to compensate for land acquisition at market prices plus an incentive coefficient to encourage people to hand over their land, and to prioritize on-site resettlement so that people can benefit from the TOD model.
Regarding financial resources, in addition to the city's matching budget and ODA loans, as well as preferential foreign loans from the Government as currently implemented, it is necessary to simultaneously implement solutions to expand and diversify financial resources, including: State budget funds for land acquisition and site clearance; organizing land auctions according to the TOD model; mobilizing domestic capital through the issuance of bonds, government bonds, shares, public-private partnerships, or other legal forms (if any)... and borrowing foreign capital.
According to MAUR, to achieve the goal of completing the entire urban railway network as planned by 2035, investment preparation for all lines must be completed within 4-5 years (no later than 2028). Based on this requirement, MAUR proposed two options: Option 1 is to not carry out investment procedures for a single project or line separately as is currently done, but to carry out investment procedures for all urban railway lines, submit the investment policy for the entire project to the National Assembly for approval, and then entrust Ho Chi Minh City with the approval of the investment project.
According to this plan, the city is expected to prepare and submit the policy proposal to the National Assembly for approval in about 1.5 - 2 years; the project approval steps (taken by the city) will take about 1 year. The total investment preparation time (for all routes) will be approximately 3 years. This ensures completion before 2028 to move on to the project implementation phase.
Option 2: Follow the same procedures as Option 1, but propose that Ho Chi Minh City approve the investment policy.
Furthermore, it is necessary to establish a common regulatory/standard framework for all urban railway lines before the project is approved (within the next 1.5 - 2 years), including basic elements such as tunnel gauge; power supply technology; carriage gauge and dimensions; information, signaling and control systems; and creating mechanisms for the development of the domestic railway industry.
Regarding organizational models, project management, and human resource training, MAUR also proposed transforming the Urban Railway Management Board and HURC1 Company into a fully functional urban railway enterprise with the capacity to mobilize capital, make investments, manage and implement projects, operate and maintain, develop real estate, and provide other services.
If the plan to develop the metro system to implement Conclusion 49 of the Politburo is approved by the National Assembly in May 2024, Ho Chi Minh City expects to complete the detailed project planning and TOD (Transit-Oriented Development) planning in 2025; complete the arrangement of funding for implementation in 2025-2026; complete investment preparation and project approval in 2026-2027, and complete land clearance and handover of cleared land by 2028. Construction will be organized in 2028-2029, and the urban railway system will be completed by 2035, in accordance with the requirements of the Politburo.
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