‘$13bln for Hanoi’s urban traffic development too big’: experts

Traffic experts said that 260 trillion dong ($13 billion), accounting for more than 20 percent of Hanoi’s GDP (gross domestic products) for the capital city’s urban traffic development will be too big and unfeasible.

Dr. Khuat Viet Hung, head of Transport Management Planning Department, University of Transport, said it is necessary to consider the total amount of spending for the capital city’s urban traffic improvement. 260 trillion dong in the next five year to deal with the traffic jam in the city will be equal to 52 trillion dong each year while Hanoi’s GDP was 238 trillion dong in 2010. If comparing with Hanoi’s GDP, the amount of capital for traffic infrastructure would equal to 22 percent of the city’s GDP each year.

Currently, the country is investing about only 3.5 percent of GDP in traffic infrastructure each year. Normally, in the other countries in the world, even during the hot development stage, the total investment for traffic system accounted for only 7-8 percent or highest at 10 percent of GDP. Therefore, Hung said Hanoi’s spending on traffic system accounts for over 20 percent of GDP, two-fold higher than that of other countries and six times higher than that of the whole country will be a record figure.

“If spending 22 percent of GDP on transport, we will not have enough money to invest in other sectors such as health, education and housing. Furthermore, the Hanoi’s total budget collection would be only 60-79 trillion dong each year” Hung worried.

Hung suggested the city should spend only 10 percent of GDP on traffic system. In the short term, the city should focus on the key routes such as the ring road 2 and Nga Tu So (So crossroads)-Vinh Tuy Bridge. Hung added, each year, Hanoi should increase by 5 percent of the road surface area.

In the current context, it will be not easy to raise over $3 billion from the state budget. Additionally, many investors are not interested in highway projects due to low return on investment. Thailand’s Bangkok has three million autos and Seoul with more than four million autos, meanwhile, Vietnam has only about one million autos, leading to low amount of toll, Nguyen Manh Hung, chairman of the Vietnam Automobile Transportation Association, said.

As explained by Hanoi Department of Transport, the total amount of capital from the state budget would be $3.3 billion (over 65 trillion dong), ODA, BT, BOT and PPP capital would be about $9.5 billion (nearly 200 trillion dong). Hanoi will need about 102 trillion dong for belt roads, 50 trillion dong for key urban routes and 15.8 trillion dong for radial national roads. In addition, Hanoi also plans to develop ring roads and provincial roads and routes in districts of Ba Vi, My Duc and Soc Son. – Vietbiz24

Tags: Hanoi transportation