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HCMC mulls allowing ads on buses over subsidy burden

HCMC mulls allowing ads on buses over subsidy burden

Saturday, May 25, 2013, 14:44 GMT+7

With the subsidy for the operation of buses in the city nearly doubling in four years, Ho Chi Minh City’s local government is considering allowing buses to carry ads on their sides in order to ease the burden.

So far this year some VND1.48 trillion (US$71.3 million) from the city’s budget has been earmarked to subsidize buses, an increase of VND200 billion compared to last year.

HCMC currently has around 3,000 buses.

This is the highest subsidy amount in the last ten years, although the city’s transport department increased bus ticket fares by VND600 - VND2,000 each at the beginning of this year.

The figure has nearly doubled the VND767 billion worth of subsidy in 2009.

“The fare increase was intended to help reduce the budget subsidy for bus, but the result fell short of expectations,” said Duong Hong Thanh, deputy director of the transport department.

The higher fares were expected to increase revenues from bus operation by VND240 billion in 2013.

“But the sum is only enough to make up for the rising costs of paying employees and other expenses this year,” Thanh said.

Thanh added that the bus subsidy has consistently soared in recent years thanks to rising basic wages, fuel and vehicle maintenance costs.

Slow implementation

In June 2011, the municipal government asked the transport department to assign the city’s Center for Management and Operation of Public Passenger Transportation to develop a plan for ads on buses.

But the center has not finished the plan yet, the department said.

Le Trung Tinh, former head of the transport and industry management office of the department, said the plan should be developed and implemented soon to reduce the subsidy burden.

“We have enough competent agencies to make it right at the moment,” he said.

“For instance, the Department of Information and Communications will approve the ad content, while the transport and public security ministries will decide where the ads should be placed,” he elaborated.

Tinh said he urged the city’s government to speed up the plan five years ago, when revenues earned from running ads on buses were estimated at some VND100 billion a year, while the subsidy then was up to VND700 billion.

“Now that the subsidy has risen to nearly VND1.5 billion, the government should take action soon,” he urged.

The local governments of Hanoi, Dong Nai, Binh Duong, and Can Tho all allowed ads on buses five years ago, and there have been no problems reported, according to Phung Dang Hai, director of the HCMC Transport Cooperatives.

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