On October 14th, information from the Ho Chi Minh City People's Committee indicated that the unit had just submitted a report to the Ministry of Finance assessing the impact of public debt when implementing the urban railway project.
Ho Chi Minh City is developing a plan for urban railway development with a capital requirement of 22.3 billion USD for the period 2026-2030. Photo: Chi Hung
According to the Ho Chi Minh City People's Committee, the draft Ho Chi Minh City Planning for the period 2021-2030, with a vision to 2050 (currently being finalized for submission to the Prime Minister ), identifies the total medium-term public investment capital requirement for the period 2026-2030 at nearly US$62.59 billion (VND 1,502,207 billion).
Of that amount, the capital allocated to the Ho Chi Minh City urban railway system development project is $21.755 billion (approximately 34.76%).
The Ho Chi Minh City People's Committee acknowledges that the capital needed to implement the urban railway system development project is substantial, accounting for a high proportion of the city's medium-term and annual public investment plans.
In addition, the current needs for projects in the city are very large, and the local budget revenue allocated under the decentralization scheme cannot meet them, so additional funding needs to be mobilized through various other forms, including borrowing.
Metro Line 1 (Ben Thanh - Suoi Tien) is expected to be operational in December 2024. Photo: My Quynh
The city is also implementing ODA projects with large-scale loans to fund the urban railway system development plan.
Therefore, the total annual borrowing and budget deficit levels need to be reviewed and adjusted by the National Assembly and the Government to ensure sufficient borrowing capital for Ho Chi Minh City in the coming period, guaranteeing the implementation of projects.
Regarding the feasibility of mobilizing capital, Ho Chi Minh City reported that the increased central government revenue comes from revenue sharing based on a percentage between the central and local budgets. Currently, the central government accounts for 79%, while Ho Chi Minh City accounts for 21%.
The increased revenue for the central government (79%) will be allocated to the central budget, and the Standing Committee of the National Assembly will decide on bonuses for exceeding the projected revenue targets, as stipulated in Article 59 of the 2015 State Budget Law.
To meet the capital needs for the urban railway system development project, Ho Chi Minh City proposes to retain the increased revenue from the central government budget, derived from the revenue sharing between the central and city budgets, to implement the project.
The Ho Chi Minh City People's Committee stated that the city's retention of the aforementioned increased central government revenue still ensures that it meets the 79% central government revenue target set by the National Assembly.
All of the aforementioned increased revenue shall be used solely for the purpose of implementing Conclusion No. 49-KL/TW of the Politburo.
In addition, Ho Chi Minh City plans to generate revenue for the budget to invest in the construction of the urban railway system from land plots designated for TOD (Transit-Oriented Development).
This includes funds obtained from the auction of land plots directly managed by the State surrounding the stations of urban railway lines 1 and 2, and funds obtained from the auction of land plots after compensation, support, and resettlement work around the stations of urban railway lines 3, 4, and 5.
Regarding investment capital from Ho Chi Minh City, it is projected that 10% to 40% per year (depending on project progress) of the city's annual public investment capital will be prioritized for investment in the urban railway system development project.
Ho Chi Minh City also mobilizes capital from various sources through the issuance of local government bonds, borrowing from domestic financial institutions, other domestic organizations, and from foreign loans that the Government lends to the city.
Source: https://www.baogiaothong.vn/vi-sao-tphcm-de-xuat-giu-lai-phan-ngan-sach-thu-vuot-du-toan-de-lam-metro-192241014150302188.htm
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