Ho Chi Minh City chairman pushes bonds to foot $36bn bill of metro projects
Friday, October 04, 2024, 16:07 GMT+7
Chairman of the Ho Chi Minh City administration Phan Van Mai is pushing urban railway bonds as a means of covering the US$36 billion cost to build 180km of metro lines in the next decade.
Mai made his appeal to the public while attending the third working session of the 12th Congress of the Vietnam Fatherland Front of Ho Chi Minh City on Thursday.
As part of the newly announced urban railway development plan, Ho Chi Minh City expects to invest $36 billion in developing 183km of metro lines by 2035.
Mai stated that the city has also planned to build an additional 168km of metro lines between 2035 and 2045, aiming for a total of 510km of track by 2060.
To achieve these goals, the city will tap into the state budget, revenues from urban development, public investment, and bond issuance, Lao Dong (Labor) newspaper reported Mai as saying.
The municipal administration will forgo official development assistance (ODA) loans and instead raise funds by issuing bonds to the public.
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| Chairman of the Ho Chi Minh City People’s Committee Phan Van Mai speaks at a session of the 12th Congress of the Vietnam Fatherland Front of Ho Chi Minh City, calling on people to buy urban railway bonds, October 3, 2024. Photo: Huu Hanh / Tuoi Tre |
“This is a huge plan that needs long-term support from the public. With the strength of the people, we will certainly do great things, including executing grand projects worth hundreds of billions of U.S. dollars,” Mai said.
Accordingly, the municipal administration has plans to issue urban railway bonds to the public, the chairman said, stopping short of giving any indication of just how much official expect to raise through that bond issuance.
“Although interest on bank deposits may be higher than that on urban railway bonds, purchasing such bonds is a contribution to the development of the city’s metro system,” Mai told the session.
He assured that relevant agencies would efficiently leverage the land bank along the metro lines and capitalize on the projects’ socio-economic benefits to ensure interest payments to bondholders.
As previously planned, the city eyes the construction of eight metro lines.
So far, metro line No. 1 is approximately 98 percent complete after 12 years of construction. It is expected to be put into commercial operation by the end of 2024.
The route spans 19.7 kilometers from Ben Thanh Market in District 1 to Suoi Tien Theme Park in Thu Duc City.
Meanwhile, metro line No. 2, which connects Ben Thanh Market and Tham Luong depot in District 12 with a length of 11.2 kilometers, is projected to be completed by 2030.
Work on the other six metro lines has yet to begin.
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