The inside of a passenger train carriage for Metro Line No.1 in HCM City. The city is seeking more private investment to build its metro lines. — VNA/VNS Photo Tiến Lực HCM CITY — HCM City wants to attract more private investment instead of relying on official development assistance (ODA) to build its remaining metro lines, but experts have said that it faces a difficult challenge. Dr. Vũ Anh Tuấn, director of Việt Đức Transport Research Centre, said the city was facing hurdles finding private investors for the metro lines. “Investors are hesitant because these metro projects are all done on a massive scale and require a huge amount of capital, while revenue from ticket sales is not enough to cover operating costs,” he said. Moreover, a lack of a legal framework on private-public partnership (PPP) investment in traffic and railway projects has added to the problem, according to Tuấn. Dr. Huỳnh Thế Du, lecturer at Fulbright University, said it was important to learn from the experience of other countries such as South Korea and China, which initially relied on advanced technology and foreign loans for their first railway lines. Later, they focused on domestic private investment and technology, which lowered the costs greatly. Most of the metro lines in HCM City are being funded by ODA loans. For example, the first metro line with a total investment of VNĐ43.757 trillion (US$1.9 billion) is being built with an ODA loan from Japan of VNĐ38.265 trillion, and reciprocal capital of VNĐ5.492 trillion. Total investment for metro line 2 is VNĐ47.891 trillion, of which ODA is VNĐ37.487 trillion from the Asian Development Bank (ADB), German KfW Development Bank (KfW) and European Investment Bank (EIB). The reciprocal capital is VNĐ10.404 trillion. The first phase of metro line No 5 will be funded by ODA loans from the ADB, KfW, EIB and the Spanish government. “The problem with the use of ODA loans is the delay in disbursement procedures, …
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