HCM City Transport Department seeks to increase public bus subsidy

The HCM City Department of Transport has asked the Department of Finance to give an additional VND161bn (USD6.8m) to subsidise the public bus system in 2020.

The HCM City Department of Transport has asked the Department of Finance to give an additional VND161bn (USD6.8m) to subsidise the public bus system in 2020.

  

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The total budget for public buses in 2020 is over VND1.1trn (USD47m). However, Covid-19 has negatively affected many businesses including the public bus system. That's why the Department of Transport has to recalculate expenses and operational costs. In order to maintain business, improve services and attract more passengers, HCM City will need over VND1.3trn, about VND161bn higher than the given budget.

The total travel distance increased by 1.1 million kilometres, costing VND29.4bn (USD1.3m). There were only about 32.67 passengers per trip instead of the expected 44.5 passengers per trip. The subsidy for affected bus transportation firms is over VND22.5bn.

If the budget does not increase, the public bus system may only be able to operate until mid-November or they will have to reduce the number of trips by 15% from July 1 to December 31. If the number of public bus trips is reduced while demand increases, it will not only badly affect the business but also passengers as they will have to wait longer or take more buses to reach the destination. Moreover, it will disrupt the network.

The department has asked to increase the budget for public buses.

HCM City People's Committee has given a budget of VND1trn (USD43m) each year to subsidise the public bus system, hoping to encourage more people to use public transport and reduce the number of personal vehicles.