Investments

Implementing the TOD Model at Metro Line 1 Stations: A Potential $1 Billion Revenue Stream

"The following is an opinion piece by Associate Professor Vu Anh Tuan, Director of the Transport Research Centre at the Vietnam-Germany University. In it, he discusses the Transit-Oriented Development (TOD) model - a concept that Ho Chi Minh City is uniquely positioned to implement. With his expert insight, he highlights the potential of this approach for the city's future urban development."

Administrator

5 August, 2024

Prof. Dr. Vu Anh Tuan, Director of the Transport Research Center, Vietnam-Germany University, shared his opinion at the 5th meeting of the Advisory Council for the implementation of Resolution 98 on August 3rd. Photo: VGP

According to Prof. Dr. Vu Anh Tuan, Director of the Transport Research Center at Vietnam-Germany University, the TOD model can be immediately implemented at the 3 stations of Metro Line 1 (expected to be operational by the end of this year).

Mr. Tuan emphasized that developing the urban railway system according to Conclusion No. 49 of the Politburo will take a significant amount of time for Ho Chi Minh City. Instead of merely discussing on paper, the city should select a specific urban railway line to practically implement the TOD model. Through this process, the city will encounter challenges and emerging issues that need to be addressed and learned from.

Metro Line 1 has 3 stations with great potential for TOD development, and the city needs to start researching, designing, and bidding for these stations immediately. These are Phuoc Long station, which can be combined with the Truong Tho area; Rach Chiec station, which can be integrated with the Rach Chiec Sports Complex and the redevelopment of the northern area; and Suoi Tien station, which can be combined with the new Eastern Bus Station, revitalizing the area and improving transportation in the city’s gateway region.

“With these 3 stations, the Departments of Planning and Architecture, Transport, and Natural Resources and Environment can collaborate to implement detailed planning and organize bidding. According to my calculations, the value created could reach billions of USD, providing seed money for other urban railway lines,” said Mr. Tuan.

Architect Ngo Viet Nam Son proposed at the meeting. Photo: VGP

Sharing the same viewpoint, Assoc. Prof. Architect Ngo Viet Nam Son suggested that TOD should be boldly applied to Metro Line 1. Through this implementation, the city will gain experience and be able to apply it to the remaining lines, shortening the time and achieving higher efficiency.

Additionally, Mr. Son emphasized the importance of reforming various legal foundations and laws related to auctions, land retrieval, and market economics. The city needs to anticipate potential legal obstacles and make recommendations to the Central Government. It is crucial to avoid a situation where the project is halted due to legal constraints, resulting in delays and excuses that the law does not permit.

Regarding compensation for TOD development, Prof. Dr. Vo Tri Hao, arbitrator at the Vietnam International Arbitration Center, stated that public agreement on land retrieval is essential for the success of this proposal.

“If we only offer monetary compensation with interest, it might not satisfy the residents due to inflation and price fluctuations. To gain their agreement, we should provide benefits in the form of increased property values in the area,” said Mr. Hao.

Prof. Dr. Vu Anh Tuan agreed that compensation should not be limited to monetary forms as currently practiced. Instead, it should involve “equitization” so that residents can still benefit if the land value increases significantly. The revenue generated from TOD development can be directed into a common fund dedicated solely to the development of urban railway lines.

Tung Phong