Public transport ripe for investment

Amid rising demand for infrastructure upgrades and a shift in the urban development model, Ho Chi Minh City is opening up one of the largest investment spaces in decades: the public transport system. Bich Ngoc reports.

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Motorbikes dominate in Vietnam due to their flexible mobility

(Photo: Le Toan)

Last week, Ho Chi Minh City People's Committee submitted to the Standing Committee of the City People's Council a proposal on free bus fares.

Estimates show that funding for fare exemptions in the remaining eight months of the year would amount to around $35.7 million. Previously, the city had also proposed allocating approximately $270 million annually for the policy, with the aim of reducing traffic congestion and improving the urban environment.

The developments have once again brought public transport to the forefront of policy discussions. According to Huynh The Du, a member of the Vietnam Initiative, Ho Chi Minh City’s free bus policy is economically sound when accounting for the externalities of transport. Shifting from private vehicles to public transport can help reduce congestion, pollution, and broader social costs, losses estimated at billions of US dollars each year.

However, the actual effectiveness of the policy depends heavily on the time-cost trade-off faced by users.

"Calculations show that for low-income groups, a bus trip of around 5-7km can take about 40 minutes, while the same journey by motorbike only takes 15-20 minutes. Even if bus fares are free, the total real cost, including time, convenience, and overall experience, remains higher than that of private vehicles," Du said at a workshop on a “pull-push” strategy for Ho Chi Minh City’s public transport held last week.

"This shows that relying solely on ‘pull’ measures such as free fares will have limited impact in shifting people towards public transport. The issue lies in the city’s urban structure and travel habits, where motorbikes dominate thanks to their flexible door-to-door mobility, especially in hot and rainy conditions," Du noted.