Vietnam - Huge bus fare rises in capital

HANOI – From October 1 bus fares in Hanoi City increase by a whopping 40-75% subject to specific distances, according to Nguyen Hoang Hai, director of the Hanoi Urban Traffic Management and Operation Center.

Currently, bus rates are fixed based on Decision No. 35/2005/QD-UB issued on March 15, 2005 by the city authorities, Hai told a meeting with local media on Tuesday in Hanoi. But the rates are no longer suitable given higher input costs of public transport in recent times, Hai explained.

The State subsidized rate over the total expenses of public transport rose to 68% last year from 41% in 2006, and it will continue to soar and place pressure on the city budget if no fee adjustments are completed, Hai noted.

Figures from the city’s Department of Transport indicate the local budget has to set aside a large amount of money to subsidize public transport which steadily rises annually, from VND203 billion in 2006 to up to VND1.332 trillion last year.

Similarly, representatives of the transport department also support the fee increases, saying it is a good way to increase sales of involved companies and gradually reduce their financial dependence on the State Budget.

Thanks to the bus fare increases, transport firms’ income will increase by VND281.1 billion to VND690.4 billion a year if the number of monthly-ticket users remains unchanged, according to the department.

Bus fares are expected to rise 66% to VND5,000 for 25 kilometer or shorter journeys and by 75% to VND7,000 for 25-30 kilometer rides. Meanwhile, the priority prices applicable to students will be increased between VND45,000 to VND90,000 a month from the previous VND25,000-50,000.

As such, one passenger will pay 86% of the expenses on average for a single route, with the remainder sourced from the State Budget. Monthly-ticket users will pay 26% each, meaning the level subsidized by the State is up to 74%.

Minh Duc - The Saigon Times Daily

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